Chapter 7 Acc557

preview of chapter 7
As the story about recording funds sales at Stephanies Gourmet drinking chocolate and much indicates, control of cash is important to ensure that spoof does not come out. Companies likewise need controls to safeguard other types of assets. For example, Stephanies doubtlessly has controls to prevent the theft of food and supplies, and controls to prevent the theft of tablewargon and dishes from its kitchen.
In this chapter, we explain the essential features of an cozy control system and how it prevents fraud. We also describe how those controls apply to a specific assetcash. The applications accept some controls with which you may be already familiar, such as the use of a bank.
The content and organization of Chapter 7 argon as follows.

Fraud and Internal Control
study objective 1
fix fraud and internal control.
The Feature Story describes many of the internal control procedures used by Stephanies Gourmet Coffee and More. These procedures are necessary to discourage employees from fraudulent activities.
FRAUD
A fraud is a dishonest act by an employee that results in in-person benefit to the employee at a cost to the employer.



Examples of fraud account in the financial press include:
A bookkeeper in a small company diverted $750,000 of bill payments to a personal bank account over a three-year period.
A shipping clerk with 28 years of service shipped $125,000 of product to himself.
A computer operator embezzled $21 one million million million from Wells Fargo Bank over a two-year period.
A church treasurer borrowed $150,000 of church funds to finance a friends business dealings.
Why does fraud go past? The three main factors that contribute to fraudulent activity are depicted by the fraud triangle in exercise 7-1.
The most important element of the fraud triangle is opportunity. For an employee to seat fraud, the workplace environment must provide opportunities that an employee can exploit. Opportunities occur when the workplace lacks...If you want to get a full essay, disposition it on our website: Ordercustompaper.com



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