CASH CONTROL

HCS/380
AGENDA
 Cash control
 Principles of internal control
 Cash controls to prevent fraud
 Why corporations invest in stocks securities
 Why corporations invest in debt securities
 How stock and debt investments are reported
 The effects of unusual items on financial statements
 The effects of irregular items on financial statements
 References
CASH CONTROL

Cash is a liquid, portable, and desirable asset.

Therefore, a company must have adequate controls
to prevent theft or other misuses of cash. Cash
control is a way to monitor credit, collection, cash
distributing and payment policies a s well as
invoicing functions
PRINCIPLES OF INTERNAL CONTROL

Trial
Trial Balances
Balances

Physical
Physical Audits
Audits Reconciliations
Reconciliations

Approval
Approval Authority
Authority

Access
Access Controls
Controls Documentation

Separation of
Duties
Duties
CASH CONTROLS TO PREVENT FRAUD

 Know Your Employees

 Make Employees Aware
 Implement Internal Controls
 Monitor Balances
 Hire Experts
WHY CORPORATIONS INVEST IN STOCKS SECURITIES

 Safety
 Income
 Diversification
 Speculation
WHY CORPORATIONS INVEST IN DEBT SECURITIES

 Liquidity
 Rate of return
 Strategic positioning
 Influence/Acquisitions
HOW STOCK AND DEBT INVESTMENTS ARE REPORTED

Stock and debt investments are considered trading

securities for the purpose of selling them quickly,
Stock and Debt investments and equity investments
recorded using the cost method are classified as
trading securities, available‐for‐sale securities, or,
in the case of stock or debt investments, held to
maturity securities.
THE EFFECTS OF UNUSUAL ITEMS ON FINANCIAL STATEMENTS

 Infrequent
 Insignificant
 Irregular items
THE EFFECTS OF IRREGULAR ITEMS ON FINANCIAL
STATEMENTS

Irregular are a transaction or activity that occurs

less frequently than normal transactions or
activities, and the transaction or activity is expected
to reoccur at some point but not on a regular basis.
Irregular items have to be disclosed in a way that
highlights the irregularities in a company’s
financial statements. This allows viewers to easily
identify or recognize the difference
REFERENCES
Ingram, D. (2018). What are the Seven Internal Control Procedures in Accounting? Chron.

Retrieved from http://smallbusiness.chron.com/seven-internal-control-procedures-

accounting-76070.html

John, C. (2018). Reasons Why Corporations Invest in Securities. Chron. Retrieved from

http://smallbusiness.chron.com/reasons-corporations-invest-securities-65618.html

Masters, T. (2017). Reasons Why Corporations Invest in Securities. Pocket Sense. Retrieved

from https://pocketsense.com/reasons-corporations-invest-securities-5749.html

Reed, S. (2014). Six Strategies for Fraud Prevention in Your Business. GcTeam. Retrieved from

http://www.cgteam.com/blog/six-strategies-for-fraud-prevention-in-your-business