1.5: Internal Controls
This reading provides an overview of fraud risk and internal control systems to mitigate them in the corporate world. Barely a day goes by when the news does not include a story about embezzelement or other fraud at companies throughout the US. Part of the role of the accounting system is to help prevent and detect fraud. This information is extremely important for non-accountants to understand as well. If your company does not have strong internal controls, fraud could impact your bottom line or even get you involved in an investigation into criminal behavior.
This video will help you understand the internal control systems that companies put in place in order to prevent fraud and ensure that corporate policies are being followed.
Watch this overview video which explains the fraud triangle and how large companies have abused accounting systems to create large frauds in the past.
Read this article that explains the basic principles of the Sarbanes Oxley Act, which was passed in response to a series of large accounting scandals. This will help you understand some of the rules which govern public companies you may work for or invest in.