Chapter 7 Internal Control Flashcards
0
Q
Define fraud
A
Fraud is an intentional dishonest act that results in personal financial benefits
1
Q
6 internal control activities
A
- Establishment of responsibility
- Segregation of duties
- Documentation procedures
- Physical and IT controls
- Independent checks of performance
- Human resource controls
2
Q
Define collusion
A
When 2 or more people work together to work around controls
3
Q
Limitations of internal control
A
Reasonable assurance
Human factors
Collusion
Size of business
4
Q
Define reasonable assurance
A
Based on the belief that cost of internal controls should not be more than expected benefit
5
Q
T/F: Visa credit card transactions are counted as cash.
A
True
