Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

6. Internal Controls and Reporting Cash

Fraud and the Fraud Triangle

Financial Accounting

6. Internal Controls and Reporting Cash

Fraud and the Fraud Triangle

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Multiple Choice

Which of the following is an example of poor internal control in an organization?

Allowing the same employee to both authorize and record transactions

Segregating duties among different employees

Requiring two signatures on checks above $10,000

Conducting regular independent audits

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Verified step by step guidance

Understand the concept of internal control: Internal control refers to the processes and procedures implemented by an organization to ensure the accuracy and reliability of financial reporting, safeguard assets, and comply with laws and regulations.

Review the principle of segregation of duties: Segregating duties among employees is a key internal control measure. It ensures that no single employee has control over all aspects of a financial transaction, reducing the risk of fraud or errors.

Analyze the options provided: Evaluate each option to determine whether it aligns with good internal control practices. For example, requiring two signatures on checks above $10,000 and conducting regular independent audits are examples of strong internal controls.

Identify the example of poor internal control: Allowing the same employee to both authorize and record transactions violates the principle of segregation of duties. This creates an opportunity for fraud or errors, as there is no independent verification of the transaction.

Conclude that the correct answer is the option that represents poor internal control: Allowing the same employee to both authorize and record transactions is an example of poor internal control in an organization.