ACC 290 Week 5 Individual Assignment, Bank Reconciliation with Theft and Internal Control Deficiencies
ACC 290 Week 5: Problem 7-6A – Daisey Company
Bank reconciliation is a tool that businesses use to disclose any differences that may exist when comparing the company’s monthly cash records to that of the company’s bank’s cash records. It is an internal control method used to prevent fraudulent activity when handling cash accounts. When comparing the company’s monthly cash records to the banks monthly cash records, it can be normal for the two record balances to result in a mismatch instead of both records resulting in the same balance. This could be a result of an error, a difference in when a transaction was posted, or be a result of intentional or unintentional fraudulent activity. Daisey Company learned a valuable lesson in the importance of internal control when their accountant was caught attempting to hide fraudulent activity………………….