Internal Controls and Money Laundering in Financial Transactions

School: Seneca College - Course: IAF IAF520 - Subject: Accounting

is defined as engaging in specific financial transactions in order to conceal the identity, source, and/or destination of money resulting from an illegal act, which may involve organized crime, tax evasion, or false accounting. Money laundering THe pending order and the packing slip should have the following: sequential numbers Custody is considered to be under proper control when: transferring from one department to another department with proper authorization The shipping personnel with the power to enter or alter transactions or to intercept invoice is an undesirable combination of authorization, custody, and recording responsibility. True The clients' financial institution can handle incoming cash receipts including: (check all that apply) lockbox systems electronic transfer of funds by customers credit cards and debit cards Money laundering is considered a _________ risk related to revenue transactions. Completeness Part of the authorization procedure for revenues and accounts receivable are :(check all that apply) approving credit to determine if the customer is a regular or new customer checking availability of inventory

Accountants who handle the cash should not do the following: record cash receipts General guidelines to good cash handling practices includes separatinghandling fromkeeping in the allocation of roles and responsibilities. Blank 1: cash Blank 2: record The completion of the transaction in the system is best described by: (check all that apply) which then produces a sales invoice for the customer based on the quantity shipped; a bill of lading is produced, and used as evidence of an actual shipment or delivery; removal of the pending order from the inventory system; A company can strengthen internal control of cash receipts by using a, a post office box controlled by a company's bank at which cash remittances from customers are received.Blank 1:lockbox The computer file can be compared with the approved price source forand authorization. Blank 1:accuracy A strong internal control and a good error-checking process includes the following: cash receipts entries and subsidiary account records made by different people