QS 6-4

254 Chapter 6 Reporting and Analyzing Cash, Fraud, and internal Control QS 6-2 COSO internal control components C1 COSO lists five components of internal control: control environment, risk assessment, control acuna information and communication, and monitoring. Indicate the COSO component that matches with QS 6-3 Applying fraud triangle C1 of the following internal control activities. a. Independent review of controls c. Reporting of control effectiveness b. Executives' strong ethics d. Analyses of fraud risk factors Identify the fraud triangle risk factor (opportunity, pressure, or rationalization) in each situation. 1. Employees are told to report increased income or be fired. 2. Several saleselerks share the same cash drawer. 3. A worker did not receive a bonus this year and now feels it's okay to use the company credit cards personal expenses. 4. Doors safeguarding valuable merchandise are not locked with a passcode. 5. An employee feels underpaid and believes stealing inventory is justified. QS 6-4 Cash and equivalents C2 Choose from the following list of terms and phrases to best complete the following statements. a. Cash c. Outstanding check e. Cash over and short b. Cash equivalents d. Liquidity f. Voucher system 1. The category includes currency, coins, and deposits in bank accounts. 2. The term refers to a company's ability to pay for its current liabilities. 3. The category includes short-term, highly liquid investment assets that are readily convertible to a known cash amount and sufficiently close to their due dates so that their market value will not greatly change. QS 6-5 Reporting cash and cash equivalents C2 Anna's Cookies combines cash and cash equivalents on the balance sheet. Using the following informa- tion, determine the amount reported for cash and cash equivalents. $100 in coins held in store registers $4,000 cash in checking accounts $600 in accounts payable to suppliers $1,700 worth of equipment $1,000 cash in a safe at the store $5,000 note receivable due in 10 years QS 6-6 Control of cash Determine whether each procedure described hlou