...Guide to Internal Controls Table of Contents Overview – Fiscal Responsibility: Campus Philosophy on Fiscal Responsibility Key Concepts of Internal Control Components of Internal Control Suspected Theft or Misuse of University Assets Key Internal Controls: Segregation of Duties Reviews by Management Reconciliations Approvals Assets Bank Accounts Petty Cash Cash, Check, Credit Card Receipts Gifts and Endowments Disbursements Payroll/Personnel Accounts Payable Travel Human Resources Purchasing Contacts for Guidance Internal Audit: Role of Internal Audit Areas Frequently Evaluated by Internal Audit CAMPUS PHILOSOPHY ON FISCAL RESPONSIBILITY (Shared Responsibility for Maintaining Internal Controls) Every individual within the University has some role in effecting internal control, including each employee, manager, and supervisor, department head, dean, director, senior executive, President and Curator. Roles vary with responsibility. Managers are ultimately responsible for the appropriate use and control of the funds entrusted to them. Management is accountable to the Board of Curators, which provides governance, guidance and oversight, and is also at times accountable to the IRS and funding agencies of federal, state and private grants and contracts. (See Business Policy and Procedure Manual Section...
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...INTRODUCTION Koss is a Delaware corporation with a principal place of business in Milwaukee, Wisconsin. Koss designs, manufactures and sells stereo headphones. KOSS went public in 1965. Over the last ten years, its stock price has ranged from $8 in July 2002, to its peak at $15 in July 2006 to its low at $4 in July 2010. The Chief Executive Officer (CEO), Michael J. Koss (MJK), the founder’s son, and his family directly or indirectly own in excess of 70 percent of the company’s 851,000 shares. A $34 million embezzlement of cash from the KOSS occurred over a 12-year period from 1997 through December 2009. QUESTIONS AND ANSWERS 1. What is the problem in the Koss Corporation case? This case evolves about a wide-ranging fraud committed by senior members of the accounting department of Koss Corporation. Over a period of years, Sachdeva, the Principal Accounting Officer, Secretary and Vice-President of Finance at Koss had stole over $30 million from the Company. Sachdeva used the embezzled funds to finance her extravagant lifestyle and for her personal spendings. Mulvaney, working in concert with Sachdeva, prepared false journal entries to disguise Sachdeva's misappropriation of funds. Sachdeva and Mulvaney attempted to hide the embezzlement in the Company's financial statements by overstating assets, expenses, and cost of sales, and by understating liabilities and sales. Over the last 12 years, Koss never realised the embezzlement made by the culprit. The embezzlement was revealed...
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...inventory in place to compare with the false amounts on the inventory count sheets. b. Contact different vendors, creditors and supplies to verify they received payment from Crazy Eddie. Also confirm with the banks and creditors about the notes payable account then trace that information to the general ledger. c. Observe the recorded sales from authorized shipping and approve the customer orders and monthly statements to customers. You have to also make sure there is a separation of duties between handling the cash and reconciling the bank accounts. Therefore the same person is not doing both and they both have to review. d. Use a chart of accounts and internal verification of classification to assist with the proper classification. Also trace inventory backwards from the actual item to the vendor invoices to record paid checks and reports. 3. Since there was a lot more competition in the 80’s for Crazy Eddie’s industry there was a lot more pressure to meet all of their...
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...with the Church of this century, especially in America, knows that our problems do not result from a lack of information or material strength. If we fail in achieving what God asks from us as we run our race, it will be a failure of heart and spirit. I believe our prayers do more than simply motivate the Father to action. They actually release the power of the Holy Spirit from us to accomplish things in the earth realm. In his book, “The Kneeling Warrior,” Dr. David D. Ireland sheds much light on the importance of persistence in prayer and intercession. He takes the time to help us understand that there is literal power from the Holy Spirit which can be released from us is absolute. The power of God that brings life, healing and wholeness to the earth flows out from us---the Church. Content Summary The Bible talks about being watchful in various ways and for many different reasons, not the least of which is watching in prayer. Ephesians 6: 18 says, “With all prayer and petition pray at all times in the Spirit, and with this in view, be on the alert with all perseverance and petition for all the saints.” The KJV uses the word “watching” for the phrase, “be on alert.” According to Webster, intercede means “to go or pass between; to act...
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...such as technology. While the human race basks in the advancements of these many disciplines, a real danger that once was an unthinkable travesty has become an unfortunate reality. The reality is that as society enjoys the advances in science and knowledge, these advances are not progress at all but a hollow attempt of a society that has willingly begun to extinguish the light of faith in order to live in darkness spiritually. This is the domain of The Advancement by L. Russ Bush. Bush coins the term “advancement” and defines this term as the age into which society has now begun to descend on the vehicle of postmodern thought. The danger that Bush presents as inherent in the change to advancement thinking is that regression both physically and spiritually is interpreted as progression within the previous modern and postmodern paradigm. Summary The Advancement by L. Russ Bush is a presentation. Bush presents the word “advancement” as both a worldview and an era much like historians refer to the Medieval Era, Renaissance Era, or any of the many eras referred to by historians. In fact, the preface and introduction of the book describe the word advancement in this exact way. Bush wrote the book upon the thesis that is most clearly stated in the Preface, “The fact is, many Americans and Europeans and others...
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...Test 3 Chapter 11 1. Fundamental Concepts and Characteristics of Fraud a. Evaluation of the auditor’s fraud detection responsibilities b. Treadway Committee Report findings c. Who commits fraud and why? 2. The Auditor’s Responsibility for Detecting and Reporting upon Fraud (AU 316) a. Misstatements arising from fraudulent financial reporting – Fraud for the Entity b. Misstatements arising from misappropriation of assets – Fraud against the Entity c. The overall process: i. Identify client fraud risk areas ii. Consider client anti-fraud programs and controls iii. Respond to results of the fraud risk assessment d. Responding to misstatements identified in the audit i. Effects, if due to fraud, likely immaterial ii. Effects, if due to fraud, could be material e. Detection and reporting responsibilities within the client organization – how do we respond to fraud internally f. Responsibilities for reporting fraud to outsiders – is the same criteria for reporting fraud externally as we had to do with illegal acts. g. Audit documentation responsibilities h. Typical fraud warning signs and red flags (AU 316.85) – they are arranged by 3 elements that typically exist in some kind of combination of fraud. AU 316.85 “Examples of Fraud Risk Factors. Separately presented are examples relating to the two types of...
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...TeCHniCal THiS aRTiCle diSCuSSeS and SHowS boTH wayS of meaSuRing goodwill following THe aCquiSiTion of a SubSidiaRy, and How eaCH meaSuRemenT of goodwill iS SubjeCT To an impaiRmenT Review. IMPAIRMENT RelevanT To aCCa qualifiCaTion papeRS f7 and p2 Required 1 Calculate the goodwill arising on the acquisition of High on a proportionate basis. 2 Calculate the gross goodwill arising on the acquisition of High, ie using the fair value of the NCI. Solution 1 The proportionate goodwill arising is calculated by matching the consideration that the parent has given, with the interest that the parent acquires in the net assets of the subsidiary, to give the goodwill of the subsidiary that is attributable to the parent. Parent’s cost of investment at the fair value of consideration given $500 Less the parent’s share of the fair value of the net assets of the subsidiary acquired (80% x $400) ($320) Goodwill attributable to the parent $180 2 The gross goodwill arising is calculated by matching the fair value of the whole business with the whole fair value of the net assets of the subsidiary to give the whole goodwill of the subsidiary, attributable to both the parent and to the NCI. Parent’s cost of investment at the fair value of consideration given $500 Fair value of the NCI $100 Less the fair value of the net assets of the subsidiary acquired (100% x $400) ($400) Gross goodwill $200 Given a gross goodwill of $200 and a goodwill attributable to the parent of $180, the goodwill attributable...
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...such minor changes in the matters covered by this publication and will endeavour to publicise any such changes as widely and in as timely a manner as possible. PEOPLE, MANAGEMENT & ORGANISATIONS 2015/2016 TEACHING STAFF MODULE LEADER: Professor Susan Miller (SM) s.j.miller@durham.ac.uk tel: 0191 334 0223 TEACHING TEAM: Dr. Carole Elliott (CE) c.j.elliott@durham.ac.uk tel: 0191 334 5553 Mr. Peter Allen (PA) P.J.Allen@durham.ac.uk tel: 0191 334 5273 Miss. G. Huhn (GH) g.huhn@durham.ac.uk Contact details: We are very happy to deal with genuine, urgent enquiries by e-mail, and to give students all the help we can, but please do not ask us to do things that you yourself can do. We will be available during Consultation Hours which will be posted on DUO....
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...4-Mat Review; Leming and Dickinson Laura Romine Liberty University Abstract Authors Leming and Dickinson (2011) bring the discussion of death, dying and bereavement into the 21st century. Focusing the reader’s attention with a renewed perspective in thanatology, authors help redefine, perpetuate conversation, and add relevance to the topic harmoniously. Orienting the reader to individualistic theories that reach beyond universal attentions, Leming and Dickinson (2011) guide the discussion into a new era of defining a natural, yet, unavoidable topic. A re-education of sorts, thanatology is revived in accordance to contemporary day and time. Keywords: spirituality, death, dying, bereavement, suicide 4-Mat Review; Leming and Dickinson Leming & Dickinson (2011), pen about the manner of dying, death and bereavement supported by research and contemporary social theories. Emphasizing experiential knowledge which reinforces concepts of death, dying, and bereavement, a social-psychological tactic was employed throughout the four chapters. Life span comparisons expanded the reader’s perspective. Not to leave out other approaches, concepts are advanced through biological, philosophical and anthropological edifications as well. These systems reveal the interactivity of behavior and subjectivity within the subject matter. Summary Chapter one develops death and dying through the lens of human development and educational theories. Approaching death and dying by means of...
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... Earnings Management: Reconciling the Views of Accounting Academics, Practitioners, and Regulators Patricia M. Dechow and Douglas J. Skinner Patricia M. Dechow is an Associate Professor and Douglas J. Skinner is a Professor, both at the University of Michigan. SYNOPSIS: We address the fact that accounting academics often have very different perceptions of earnings management than do practitioners and reguiators. Practitioners and reguiators often see earnings management as pervasive and probiematic—and in need of immediate remediai action. Academics are more sanguine, unwiiiing to beiieve that earnings management is activeiy practiced by most firms or that the earnings management that does exist should necessarily concern investors. We explore the reasons for these different perceptions, and argue that each of these groups may benefit from some rethinking of their views about earnings management. INTRODUCTION Despite significant attention on earnings management from regulators' and the financial press,^ academic research has shown limited evidence of earnings management. While practitioners and regulators seem to believe that earnings management is For example, SEC Chairman Levitt delivered a major speech on earnings management in the fall of 1998 in which he advocated a niunber of initiatives to improve the quahty of financial reporting (Levitt 1998). As part of this effort, the Blue Ribbon Committee has proposed, among other things, that auditors report ...
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...example, order of materials by a factory/storeroom supervisor. [pic] 2.2 Purchase order (訂購單) – a document from a company to the supplier recording the description, quantity and amount of the goods or services ordered and it should be properly authorized by the company. [pic] 2.3 Goods received note (收貨單) – a document prepared by the supervisor of the storeroom/receiving department at the time the goods are received. It shows the description, quantity, condition and date of the goods received. [pic] 2.4 Purchase invoice – a document received from vendor which indicates the date, description, quantity and the total amount of goods and services the company has received. 2.5 Purchase journal and ledgers (a) A journal (day book) for recording the purchases of goods or services. (b) Vendors’ accounts in the purchase ledger will also be updated with the remittance advice/receipts when payments are made to vendors. 2.6 Payment voucher – an internally generated document that establishes a formal means of recording and controlling cash disbursements. It is usually accompanies with purchase invoice, goods received note and/or purchase order when approval for payment is sought. [pic] 2.7 Cheque/Electronic transfer – the means of paying the vendors when the payments...
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...organizations as well as management and/or co-workers that are in a lot of social and financial pressures. Some of the crimes related with organize crime will be money laundering, mail and wire fraud, conspiracy and racketeering. With an internal control weakness employees would always look for opportunities to commit fraud or use company assets without permission. Within this case, we will see multiples internal control weaknesses that allowed Pavlo to perpetrate the fraud and how he used the tricks to mask the whole scam. We also are going to think on what was Wanserski position when Pavlo was performing the fraud. We will explore the investigation process and what type of procedures the auditor/investigator needs to follow in order to gather all the evidence. We will have the opportunity as readers to determine if MCI also had a fault by permitting or putting the pressure on his employees to comply with some guidelines instead of looking for ways to help employees to improve their work areas. Internal control is the method intended to ensure dependable financial reporting, effective and efficient department operations, and business compliance with related laws and regulations. Not having an effective internal control process will allow fraudsters like Walt Pavlo to take advantage. In 1992, Pavlo started working with MCI as one of a few managers in charge of the billing and collections for the carrier business unit. The carrier unit handled the reseller’s accounts that leased...
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...Embezzlement at Koss over 12 Years! Introduction John C. Koss is recognized for creating the stereo headphone industry in 1958 with his first stereo headphone. Koss Corp. (KOSS) was incorporated in 1971 in Milwaukee, Wisconsin and manufactures stereo headphones, speaker phones, computer headsets, telecom headsets, noise reducing headsets, and wireless headsets. It is in the audio/video segment of the home entertainment industry. Koss Corp. went public in 1965 at $5 per share. Over the last ten years, its stock price has ranged from $8 in July 2002, to its peak at $15 in July 2006 to its low at $4 in July 2010. It currently trades at approximately $5.50 per share. Accordingly, its market capitalization has ranged from $3.4 million to $12.8 million to its current level of $5.1 million. Thus, it was below the full implementation level of the Sarbanes-Oxley Act (SOX) where the cutoff is a market valuation of $75 million. The Chief Executive Officer (CEO), Michael J. Koss, the founder’s son, and his family directly or indirectly own in excess of 70 percent of the company’s 851,000 shares. A $34 million embezzlement of cash from the Koss Corp. occurred over a 12 year period from 1997 through December 2009. June 30, 2009 10-K Report Excerpts The Koss Corp. received an unqualified opinion on its financial statements as of June 30, 2009 and 2008 (as well as in prior years) by a Big Five auditing firm. However, in accordance with SOX, the audit firm was not required to have, nor was it...
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...kidnappings, poverty, murder and oppression. The question men have struggled with is how can a good God allow such evil to continue? On a moral level, an even better question would be is the evil man experiences at the hands of other men, a result of God’s divine plan or the effect of man’s free will? Answering these questions is important because uncovering the reason for ongoing evil has challenged some to the point, they have denied their faith and joined a corps of atheists who promote the idea that the presence of suffering, pain and evil are the best testament to a non-existent God. When arguing against the existence of God, one might be presented with attempts to use His divine attributes of omnipotence (all powerful), omniscience (all knowing) and omnibenevolence (all good) against Him. The dilemma of the presence of evil in the midst of a creation that God deemed good (Genesis 1:31) would appear to make God seem as if he is unable to stop the world’s evil, unaware of the impact of the world’s evil or a participant in the world’s evil. Each of these positions would appear to negate the supreme authority of the living God. On the other hand, does man’s God-given free will...
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...must occur in the parties involved ever want to have a mutual co existence. Humanitarian Crisis and Reconciliation To understand the impact of humanitarian crises and how international politics play a role, a common definition of such crises must be understood. In his book “Humanitarian Crises and the International Politics of Selectivity” Martin Binder defines a humanitarian crisis as a “large scale human suffering resulting from the violation or the destruction of the physical integrity of a large number of people” (pg. 332). There are quite a few causes of these events that include natural disasters-earthquakes floods, winds, landslides, avalanches, cyclones, tsunamis, locust infestations, drought, volcanic eruptions, changes in weather or tidal patterns. Human factors include political corruption, embargoes or blockades, lack of planning or foresight, and not to mention demographic and geographic characteristics like population density. Of the major causes, the majority of them come from natural disasters but the one cause that can arguably be the most devastating is that of political corruption. As Robert Rothberg pointed out in his book, From Massacres to Genocide “before corruption of any kind can be dealt with, both local and international parties must be aware of and notified about the condition of their neighboring countries” (pg. 18). Rothberg discussed how, in recent years the internet has played an undeniable role in spreading...
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