Fraud, Internal Control, and Cash

These flashcards cover key concepts related to fraud, internal control principles, cash handling, and bank reconciliation based on the lecture notes.

Fraud

An attempt to deceive others for personal gain.

Corruption

Misusing one’s position for inappropriate personal gain.

Asset Misappropriation

Theft or embezzlement of cash or other assets.

Financial Statement Fraud

Misreporting amounts in financial statements to portray favorable financial results.

Internal Control

Actions taken by people at every level of an organization to achieve its objectives.

Segregation of Duties

The internal control principle that involves dividing responsibilities among different individuals to reduce potential errors or fraud.

Restrict Access

Limiting access to assets to minimize risk of theft or misuse.

Cash Receipt Controls

Procedures to ensure appropriate amounts of cash are received and deposited.

Bank Reconciliation

An internal report prepared to verify the accuracy of both the bank statement and the cash accounts.

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash.

Restricted Cash

Cash set aside for a specific purpose and not available for day-to-day operations.

Cash Shortage

The difference between cash expected to be on hand and the actual amount available.