Admin & Finance - Section 3: Internal Controls Flashcards
True or False:
Rural practices are less vulnerable than other practices when handling money.
False; rural practices are just as vulnerable as other practices when handling money.
Why is it important to have protocols and internal controls in place in your practice?
Protects clinic and staff from the accusation of security breaches.
True or False:
It is easier to refute any allegations of impropriety when a clinic has proper protocols in place.
True
What 3 things can create crime?
Means, motive, and opportunity
True or False:
One person should be in control of the entire process.
False; there should be multiple individuals and controls in place to ensure that one individual is not in charge of the entire process
Risk example:
Cash received from patient is diverted to ____.
Employee
Risk example:
Charge and applicable payment are not ____.
Posted
Risk example:
Charge is posted with payment ____ to reduce balance.
Adjusted
Risk example:
____ ticket is destroyed.
Fee
Risk example:
____ are diverted to the wrong account.
Deposits
Risk example:
Records are ____ to cover up diverted funds.
Altered
Risk example:
Cash drawer or petty cash ____.
Leakage
Risk example:
Business supplies or inventory items are consumed or removed for employee’s ____ use.
Personal
What are 2 ways in which payroll data can be falsified?
1) Hours worked
2) Hourly rate increased without authorization
Falsely reporting hours worked in an example of what type of risk?
Payroll records being falsified
Increasing an hourly rate without authorization is an example of what type of risk?
Payroll records being falsified
A check to an RHC can be mishandled by being applied to medical accounts of a ____ member.
Family
A check to an RHC can be mishandled by deposits being diverted to accounts controlled by ____ ____.
Bad actors
A check to an RHC can be mishandled by being ____ or ____ off an applicable account.
Adjusted or written off
A check to an RHC can be mishandled by deposits being ____ from the system.
Deleted
Within an accounts payable scheme, how can paying bills be mishandled?
Bills can be paid to a “company” controlled by an employee or an employee’s family/friend
Within an accounts payable scheme, how can services be misdirected?
Services can be paid for that weren’t actually rendered
Within an accounts payable scheme, an employee could receive ____ for paying for more expensive items/services.
Kickback
Why are smaller clinics more at risk for accounts payable schemes?
They are often more lax and have less robust systems in place to catch risk/fraud
What do internal controls help identify and mitigate within an organization?
Financial risks
Internal controls are protocols which are implemented to ensure the ____ of the financial and accounting system.
Integrity
Internals controls are protocols which are implemented to ensure ____ and ____.
Security and accountability
Internal controls are protocols which are implemented to communicate ____ policies throughout the organization.
Management
What are the 3 purposes of internal controls?
1) To protect ____ health, 2) to protect ____, and 3) to protect the ____ of the medical practice
1) Financial
2) Efficiency
3) Operations
What 5 areas do internal controls address?
1) Deposits/cash
2) Accounts payable
3) Mail
4) Inventory
5) Bank statements/credit card statements
True or False:
All systems of internal controls are identical.
False; no two systems of internal controls are identical.
True or False:
Many core philosophies regarding financial integrity and accounting practices have become standard management practices.
True
Internal controls should be ____ to meet the size, needs, resources, and capacity of the organization.
Scalable
Internal control is a process that involves controlling the ____ to the practice.
Risk
