Control procedure that divides responsibility between two

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P7-33B Internal control, components, procedures, and laws [20–25 min]



TERMS:
1. Collusion
2. Controller
3. Lock-box system
4. Firewalls
5. Encryption
6. Control environment
7. Documents
8. Internal control
9. External auditors
10. Timing difference
11. Information system
12. Separation of duties

DEFINITIONS:
A. The “tone at the top” of the business.
B. Control procedure that divides responsibility between two or more people.
C. Outside accountants completely independent of the business who monitor the controls to ensure
that the financial statements are presented fairly in accordance with GAAP.
D. After using this process, messages cannot be read by those who do not know the code.
E. Two or more people working together to circumvent internal controls and defraud a company. F. The chief accounting officer of a company.
G. The organizational plan and all related measures that promote operational efficiency.
H. Prevents nonmembers from accessing the network but allows members to access the network. I. Without a sufficient one of these, information cannot properly be gathered and summarized.
J. These should be pre-numbered to prevent theft and inefficiency.
K. A system in which customers pay their accounts directly to a business’s bank.
L. Differences that arise between the balance on the bank statement and the balance on the books
because of a time lag in recording transactions.

Requirement
1. Match the terms with their definitions.