MUHASEBE I - Deneme Sınavı - 7

A cash budget is a document that shows the expected amount of cash receipt and payments for a period in the future.

The objective of internal control is to provide reasonable assurance that (1) assets are safeguarded and used for business purposes, (2) business information is accurate, and (3) employees comply with laws and regulations.

“Internal control is a process, affected by an entity’s board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives related to operations, reporting and compliance.

COSO framework: • can be applied to all types of business. • has a principle-based approach and this approach can provide flexibility to the internal control process. • states how components and related principles are present and functioning and how components operate together. So, they can understand the requirements for effective controls. • facilitates risk assessment prepares an appropriate response within acceptable level and deals with fraud. • can be applied not only in financial reporting but also all other types of reporting, operating and compliance objectives. • can help to eliminate ineffective, redundant, or inefficient controls.

Control Environment: It defines a set of standards, processes, and structures that provide a basis to carry control consciousness across the businesses.

Separation of duties means dividing responsibilities between different people to prevent fraud and errors. Generally, smart management separates custody of assets, record keeping and authorization of transactions. In this context, the accounting department should be separated from all other operating departments. For example, a sales person who may have some premium from total sales shouldn’t approve or journalize the sales transactions. Likewise, in some cases, if a person is responsible for protecting some assets, he/she shouldn’t have any responsibility about the accounting process.

To achieve the internal control objectives, relevant and timely information is required. After gathering information, an effective communication will be needed to utilize this information in the business. Hence, the information and communication system should be designed to carry out an internal control structure.

Fraud is an intentional misrepresentation of some items.

Pressure, opportunity, and rationalization.

A bank reconciliation is a statement that explains any differences between the balance shown on the bank statement and the balance shown on the business’s accounting records.

Internal Control-Integrated Framework is revised and republished in 2013.

Internal control is a process, affected by an entity’s board of directors,management, and other personnel,designed to provide reasonable assurance regarding the achievement of objectives relating to operations, reporting, and compliance.

Below are explained some important points which are beneficial for board of directors and management.
COSO framework:can be applied to all types of business.

Risk Assessment:It is a process to identify and assess risks to the achievement of objectives. Accordingly, this process forms a basis to determine the way of risk management. Because of the numbers and diversity of the risk that the businesses are subject to, risk assessment must be a dynamic and iterative process in this changing environment.

The components of fraud triangle are pressure, opportunity, and rationalization.

Regarding with artificial intelligence, “machine learning” and “deep learning” can provide effective techniques to find some solutions to protect businesses’ cash and other assets against fraud.

The number and amount of checks paid within the last five years, so the given information is wrong in terms of the amount of years.

Despite many advantages, online banking may pose new types of risks about cybersecurity. To protect the business against these risks, the management should establish new control procedures such as anti-virus programs, firewalls, filtering systems, periodic software updates, passwords, secure logins, limited access, etc.

A bank statement is a document which is prepared by a bank to show the transactions that occurred in the account of a business within a month.