INTERNAL CONTROLS AGAINST MISTAKES AND THEFT

INTERNAL CONTROLS AGAINST MISTAKES AND THEFT

1. Fraud

2. Forgery

3. Embezzlement

4. How can these activities be prevented?

   • Require two signatures on any cash disbursement.
   • Conduct surprise inventory audits
   • Require two managers to approve any write-offs
   • Rotate employees.
   • Match all receiving reports with the general ledger

5. This is one reason accounting requires so much paperwork.

6. Paperwork and other accounting controls are necessary.

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