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| A periodic examination of a company's financial statements and the accounting systems, controls, and records that produce them. Audits may be either external or internal. External audits are usually performed by certified public accountants (CPAs). |
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| Collection of money by the bank on behalf of a depositor. |
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| A document explaining the reasons for the difference between a depositors records and the bank's records about the depositor's cash. |
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| Document showing the beginning and ending balances of a particular bank account listing the month's transactions that affected the accounts. |
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| A quantitive expression of a plan that helps managers coordinate the entity's activities. |
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| A budget that projects the entity's future cash receipts and cash disbursements. |
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| Investments such as time deposits, certificates of deposit, or high-grade government securities that are considered so similar to cash that they are combined with cash for financial disclosure purposes on the balance sheet. |
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| Documents instructing a bank to pay the designated person or business the specified amount of money. |
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| A malicious program that enters a company's computer system by e-mail or other means and destroys a program and data files. |
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| The chief accounting officer of a business. |
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| A deposit recorded by the company but not yet by its bank. |
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| Electronic Fund Trasfer (EFT) |
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Definition
| System that trasfers cash by electronic communication rather than by paper documents. |
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| Mathematical rearranging of data within an eletronic file to preven unauthorized acces to information. |
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| Identifying data that is not within "normal limits" so that managers can follow up and take corrective action. Exception reporting is used in operating and cash budgets to keep company profits and cash flow in line with management's plans. |
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Definition
| An insurance policy taken out on employees who handle cash. |
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Definition
| An electronic barrier, usually provided by passowrds, around computerized data files to protect local area networks of computers from unauthorized access. |
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| An intentional misrepresentaion of facts, made for the purpose of persuading another party to act in a way that causes injury or damage to that party. |
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| The three elements that are present in almost all cases of fraud. These elements are motive, opportunity, and rationalization on the part of the perpetrator. |
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| Fraudulent Financial Reporting |
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Definition
| Fraude perpetrated by management by preparing misleading financial statements. |
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| A way to account for petty cash by mainting a constant balance in the petty cash account, supported by the fund (cash plus payment tickets) totaling the same amount. |
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| Orgizational plan and related measures adopted by an entity to safeguard assets, encourage adherence to company policies, promote operational efficiency, and ensure accurate and reliable accounting records. |
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Definition
| A fraudulent scheme to steal cash through misappropriating certain customer payments and posting payments from other customers to the affected accounts to cover it up. Lapping is caused by weak internal controls (i.e., not segregating the duties of cash handling and accounts receiveable bookkeeping, allowing bookkeeper improper access to cash, and not appropriately monitoring the activities of those who handle cash). |
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Definition
| A system of handling cash receipts by mail whereby customers remit payment directly to the bank, rather than through the entity's mail system. |
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| Misappropriation of Assets |
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Definition
| Fraud commited by employees by stealing assets from the company. |
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| Nonsufficient Funds (NSF) Check |
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Definition
| A "hot" check, one for which the payer's bank account has insufficient money to pay the check. NSF checks are cash receipts that turn out to be worthless. |
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| A budget of future net income. The operating budget projects a company's future revenue and expenses. It is usually prepared by line item of the company's income statement. |
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| A check issued by the company and recorded on its books but not yet paid by its bank. |
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| A special set of characters that must be provided by the user of computerized programs or data files to prevent unauthorized access to those files. |
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| Fund containing a small amount of cash that is used to pay minor accounts. |
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| Creating bogus Web sites for the purpose of stealing unatuhorized data, such as names, addresses, social security numbers, bank account, and credit card numbers. |
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Definition
| An optional attatchment to a check (sometimes a perforated tear-off document and sometimes capable of being electronically scanned) that indicates the payer, date, and purpose of the cash payment. The remittance advice is oten used as the source documents for posting cash receipts or payments. |
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| In a large company, the department that has total responsibility for cash handling and cash management. This includes cash budgeting, cash collections, writing checks, investing excess funds, and making proposals for raising additional cash when needed. |
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| A malicious program that hides within legitimate programs and acts like a computer virus. |
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