CASH. Group 5 2-CFM Jigs Parco Niña Malagueño Mikael Agbayani Lance Rivera. Internal Control. Defined as the procedures and processes used by a company/firm to: Safeguard its assets Process information accurately through the Financial Statements
Group 5 2-CFM
Defined as the procedures and processes used by a company/firm to:
Integrated Framework- The standard by which companies design, analyze and evaluate internal control
Control Environment- the overall attitude of the management and employees about the importance of internal controls. This is the tone at the top which is a gauge on how the management is firm in implementing controls. This includes the following:
Risk Assessment- Identifying & Assessing risks and their impact on their organization
Control Procedures- provide reasonable assurance that business that business goals will be achieved, includes the prevention of fraud
Monitoring- used to locate weakness and improve controls. Monitoring often includes observing employee behavior and the accounting system for indicators of control problems
-Represented by a voucher- Legal documents that serves as proof of authority to pay cash or issue EFTs
-made when cash is received
cash register to
control cash is
Items for reconciliation:
Items for reconciliation:
Cash equivalents are investments that can be readily converted to cash. Common examples of cash equivalents include commercial paper, treasury bills, short term government bonds, marketable securities, and money market holdings. An item should satisfy the following criteria to qualify for cash equivalent.
The investment should be short term. They should mature in less than three months. If they mature in more than three months they will be classified as other investments.
They should not be too risky. There should be very little risk of changes in their value. This means that equity shares cannot be classified as cash equivalents. But preferred shares purchased shortly before the redemption date can be classified as cash equivalents.
Cash disbursement is a process by which a business pays out money to a person or organization typically related to operating expenses for that business. While the name implies this type of payment is made out in cash, which is possible, it is common for payments to be made as checks or credit transactions.
As expenditures are made, the custodian of the fund will reimburse employees and receive a petty cash voucher with a receipt/invoice attached in return. At any given time the total of cash on hand plus reimbursed vouchers must equal the original fund.
Author: James Reeve, Johan Duchac, Carl Warren
Author: ConradoValix, Jose Peralta, Christian ArisValix