Discussion Module 1 - Asset smannem

School: University of Notre Dame - Course: CSCI 538 - Subject: Accounting

Module 1 Discussion - Assets2 Answer 1 Internal control is a process strongly affected by the organization's leadership, management, and other employees that are designed to provide reasonable assurance that the organization's objectives will be met. The organization's goals are classified according to criteria such as activity effectiveness and efficiency, financial statements or reliable information, and compliance with current laws and regulations. Obtaining an unsolicited opinion can be difficult due to asset issues, discrepancies between records pertaining to the physical existence of assets, and unfinished revalued assets.[ CITATION Set13 \l 16393 ] The first internal control that was violated was theMisappropriation of Assets.In other words, it wasAccounting Fraudsince the high value of the company was shown, and the investors were at a loss.Barry Minkowlied about the value of the company, and all the reconstruction projects were a sham to fool creditors into investing more money. All supporting audits and documents were forged. It wascorporate fraud,and the basic element wasdeceit and trickery. When applied to the accounting system, internal control denotes the management of the accounting system to accomplish the following goals: Conduct accounting transactions that are efficient and organized. Following management policy when it comes to asset protection. Error detection and error prevention. Fraud protection and fraud detection. Ensuring the timely, accurate, complete, and reliable preparation of accounting data. Violation of internal controls resulted in the following: Fraudulent Financial Statements Employee Fraud