Alright right here we are once more individuals, last time
we discussed cash and also internal controls and I desire to discuss a few of the principals
that we spoke about last time just to provide you a little bit of testimonial. So allow'' s take a look at the PowerPoint ' s real quick
if we could. We spoke about what the objective of inner control is, to secure your properties. It'' s also to make sure trustworthy accounting and promote effectiveness in your operation. I put on'' t want you to believe inner control is all about simply capturing charges. It has to do with having our procedures and policies in position to assist points be smooth and assist things be reliable and also help them be trusted. It can assist protect against mistakes as well. It wishes to give you plans that you can adhere to. Alright um the following slide okay. Okay the principals of interior control remember you were meant to preserve responsibility.You were expected to report the journal entrances that you
make. You want to make certain possessions and also you intend to bond your essential staff members.
You want to divide you tape-record avoiding your safekeeping of properties, this is a large one, if you have guardianship of assets whether its money or warehouse items or whatever.
I want to reveal you two fast little videos, these are information stories.And I ' m going to lean up so you can hear this. And we can make this job. In between 2007 and 2009 the 39 year old from
Lily Nailes swiped 19.3 million bucks from her employer telling police it was very easy. Today she begged guilty to the supreme courts twenty four counts of theft.
She utilized the money to buy greater than sixty residential or commercial properties throughout Australia along with in Tasmania and in Queensland.She likewise invested$ 110 thousand dollars on a. car
for herself, 80 thousand on white wine for her hubby and also jewelry for herself.
Her attorney stated her actions weren ' t encouraged. When her company discovered inconsistencies.
All yet one of them has currently been marketed and also. more than 16 million has been recuperated. Courts have actually wrapped up that her
actions added. to the companies collapse and also went into recordership late this year as well as is currently in management. The court listened to that this was her way of dealing. with a falling short marital relationship and also the stress of caring for two autistic kids as well as that.
she had a delusional belief that she was exceptionally good in investing in property. A psycho therapist informed the court Miss Causa knew.
Okay a couple of points from that, number. That is a bad day at the office, isn ' t it? You can see all of the things that.
Which are the 3 points that we find in. virtually every incident of stolen assets from a business.
She didn ' t have any type of rap sheet before. this; she was alleviated to be caught. This is a traditional instance. Allow me reveal you one various other one. This set is a little even more of a severe instance. New information have actually arised concerning an accountant. who eliminated himself after being questioned by police regarding the loss of two of.
his customers. His employer states he embezzled even more than two. million dollars from several firms over a 4 year period. Authorities won ' t say just how much was taken from.
john and also Elizabeth Calbert.They have likewise refused to hypothesize on whether. the pair had actually uncovered the theft. The Calberts manage home and also the club.
They were in the process of doing their very own.
Individuals have passed away
in that one? I wear ' t recognize if anybody saw sixty mins last. It was a really excellent story, it was an interview.
ever in the history of the world. As well as they interviewed his partner,'his kid and. his other child in fact dedicated suicide yet it was a really depressing bargain, however once more it resembled. they interviewed this better half and also asked her whether she knew and also it ' s like how do you steal. this much cash? It always starts so little and finally you. understand you remain in so deep that you go nuts or you get hooked on it as well as you have to swipe. to cover up what you stole before.But a great deal of these stories are similar, at. completion they just say I put on ' t know exactly how this occurred. Okay, I don ' t know
how this happened. It was really intriguing if you go to sixty.
I believe they have their interviews in the. That is just a pair of them, however going. Modern technology has actually transformed internal control, in.
some methods it has actually made it eaiser as well as somehow it has actually included some challenges. There are lowered handling errors for sure.What do we mean by that, well I ' ll tell you. Every business utilizes computer system software application, I put on ' t. intend to say every yet practically every, 99.99% make use of some kind of computer system software application to maintain.
track of their bookkeeping. You can get a good plan for less than a. couple hundred dollars. Currently it will certainly not allow you publish a journal entry. without your debits equaling your credit scores.'When people do this by hand they would usually. make an error or'a transposition mistake as well as their debits would not equal their debts. Theoretically it couldn ' t be captured however on with. innovation and computers that things can be stopped an additional point is it will certainly accumulate. columns and also numbers as well as if you create spread sheets and records then the numbers will certainly be calculated. and circulation with so there is a great deal of that kind of just enhancement subtraction reproduction. and also department that there have been large enhancements on with just having modern technology. Currently one point that technology has always done. though is it has increased
the e-commerce right? The number of of you people right here have ever before bought. anything off of the computer system, elevate your hand.Everybody alright so if I had asked that fifteen. years ago I wear ' t understand if any person would certainly have answered it.
Has anybody ever bought anything worldwide? Anyone, alright a few of you. If I had asked that 10 years ago probably, once again.
not yet currently there is an entire brand-new chance for commerce however there are a whole lot of. new difficulties too.
Innovation a good idea concerning, an additional good.
One obstacle is though that the splitting up. Innovation has gotten rid of some accounting. Maybe in a firm where there used to be.
ten bookkeeping tasks there is currently 7 since innovation does a great deal of things
that used. to require individuals to do.That ' s the problem
, fortunately is that. the jobs that technology eliminated were largely the really, truly dull jobs. The kind of tasks that you don ' t wish to aspire. to anyhow alright, there is still an excellent requirement for accountants as well as translating this information.
and know what to do and also you understand there is no alternative right now for an excellent solid. accountant.
Occasionally these accounting software program programs. You know as well as maybe they really feel the power or. Modern technology has actually influenced the number of.
Okay yet the tasks are still very abundant. There are constraints of internal control.
We all make mistakes as well as possibly they put on ' t. recognize what they are doing. That is why a whole lot of business have guidelines. I am not going to hire your sweetheart; I am.
Do you see what I am stating? Due to the fact that
they don ' t desire those connections.
There are some things where the advantages simply. And allow me offer you an'instance I used to use,. I made use of to function at a company where there was a refrigerator with cans of pop that they.
You take a pop you placed a quarter in, well. do you assume people ever took pop without putting a quarter in? Yeah we were always short concerning$ 20 at the. end of each month.
What are you going to do, are you going to. employ a safety guard as well as placed electronic cameras there? We are always going to be brief concerning $20. My employer would certainly constantly complain regarding it, occasionally. I would certainly simply place a$ 10 bill in there simply to claim you understand I wear ' t wish to, simply to relieve. the discomfort a little bit.But you understand you are mosting likely to shed a little.
Someone told me they functioned at a dining establishment. And also the student stated yeah every currently
and then. Anybody ever swipe some food
, put some food.
You are possibly not going to go insolvent. The points that we desire to prevent and the things. We have to do an expense advantage evaluation.
on it. Okay alright lets take a look at the research.
I assigned a couple worked out to assume with. Allows go with those, now when we go through these, do what I constantly do and also. I believe I informed you this the other day, whenever
we go to a restaurant Dining establishment will will certainly this is howJust how
I always assume exactly how would certainly I steal from this. firm if I intended to swipe from this company right? Actually companies have employed previous.
thieves to find recommend right? If you, did you ever see that motion picture catch me. can'? Did you ever before see that with Leo DiCaprio as well as. Tom Hanks? That was a true life tale.
Concerning a person that embezzled and took and all.
If, the money is kept in a box at the stand okay first of
all how would you steal take. you wished to swipe money from this company? Simply take it out of the box.Yeah however chances are that the box is locked,. I recognize exactly how I would take money, any person else have an ideas? Take towels take those supplies you could. do that, there is a great deal of individuals who are not mosting likely to go burglarize a secured box and also. steal money or run away with a lot of towels okay but what they are going to do is this,.
this is a little trick I made use of to utilize with my friends when we utilized to visit the baseball.
game is I would tell them hey who wants ice cream? As well as they would go, I stated oh I ' ll go get.
See I justified it I believed that is. A dollar fifty commission for me going to obtain my buddies the ice lotion? I know what I would certainly do let ' s say the t shirts set you back ten dollars fine you see some rich Johnson.
Now wear ' t create these down I ' m always scared.
I ' m training my trainees exactly how to swipe. Okay just how would certainly protect against that I believe that ' s. the largest rick of
the circumstance right there exactly how would certainly you stop that? Upc code? You can have a little hand held scanner. Okay that is a great recommendation there. Is it a coastline county? Well at the beach its hard to wheel around. a sales register right? But they do in fact have portable things. now individuals can put on right? You ever seen those? I assume they have them at sonic don ' t they? Where its like a cash register that publishes. out a receipt.So you can do a situation where you say. if we don ' t provide you a receipt your thing is complimentary. Two people, here is the trouble keeping that. Top it is twice as pricey you are.
And the other thing is this
. Exactly how long do those two individuals that are walking. Um excellent though however that ' s the risk you.
run there Jake? Indicators behind them that the proprietor makes due to the fact that
. they are most likely not going to head out and also alter the signs.Right that ' s a great concept Jake, what he is. claiming is make the indication at the
That ' s a quite noticeable.
Tee shirts will be cost 10 bucks you. recognize sunglasses will be offered for eight bucks or whatever. Among my students raised an excellent idea. as soon as. She stated that possibly you make the T-shirt that. your staff members put on have the menu on the back. So that you can inform if they are showing the. food selection therefore it ' s type of advertising the menu as they walk. Do you see what I ' m saying? Currently most definitely you wish to have a situation. where you offer an employee some money and some goods to make modification as well as they head out. for the early morning and after that come back as well as when they come back they require to either have product.
Or the quantity of money for that product? As well as that ll needs to be integrated so. they need to have that.Does that make sense alright I believe those are. possibly the major means.
That ' s independent testimonials? You may every now and after that specifically. A secret consumer sort of a thing all right great.
Okay next one an antique shop has one staff member. Below we are not offering stuff we are acquiring. Well you might just take the cash money again so.
I created down that if you utilize a business debt card you might see all the purchases. Yeah you could once again you could just steal. Here is the deal thou if you steal cash or.
You swipe a products you can quite'a lot do it as soon as? Like at the coastline thing.If I desire to steal sunglasses or towels and also. just abscond with a number of things well I ' ve done that yet I can ' t come back to work the.
Following day? That ' s practically one of those circumstances where.
if that happens it ' s a downer however its not going to probably place you under.
What we are more concerned regarding is that there.
means people can take hundreds and also thousands of dollars on an ongoing basis fine.
currently that being claimed antique supplier just how could you have an ongoing situation where you are. shedding money? I recognize one; I would provide
them a checkbook. or something.Just stop those making use of cash at all times
. Okay there is a challenge right here due to the fact that the majority of.
Some don ' t also take checks. Well I could simply claim if I was making use of money,. I could just claim it set you back a hundred bucks and pay the forty as well as maintain the sixty my employer.
assumes we sent out one hundred on that particular table what he in fact did was invest forty on that table.
as well as he gave me sixty dollars without knowing it. You see what I ' m stating that ' s the danger we. If we can ' t write, have here.Now how do we try to avoid. checks or we can ' t make use of a bank card? We are simply making use of money obtain a receipt, which. Is good it has its tested. If you obtain a receipt from, because hold on. a yard sales what is it going to be? Hand written
, yeah something created on a. past it keep in mind.You can have falsify receipt all day,
where I can do it myself to make sure that'' s type of challenging. You can have log of where they went like
addresses or something. And also examine them? Yeah you could do that. Particularly for much more costly items.Or you could have some type of type that requires to be filled in real quick as well as I believe independent reviews is probably the most effective point that you need to do there is in some way check up on them.
Once again hiring two individuals it ' s not mosting likely to be long prior to they end up being really great friends.
As well as I assume you are going to remain in the same If you have just one individual out there, situation as.
Simply empty billings.
That they fill out. As well as some individuals you understand. Do you see what I ' m saying?
possibility of being captured there are likewise points I the globe wear ' t do not all individuals wear ' t. do but some people wear ' t do because it is unlawful, I do know whether it is excellent or otherwise,.
I do understand university student'who put on ' t beverage when they are underage due to the fact that it ' s versus
. the legislation. Think this or not these people exist. And there is not just three or 4 of them. There are university student who don ' t drink. since they are underage and they ' re like you know I wear ' t wish to worry regarding getting. caught'I put on ' t want the whole bargain. I believe this is why I ' m always versus illegalization
. of marijuana', I think that there is people that don ' t smoke cannabis due to the fact that it is illegal. and they put on ' t want to manage it.
Do you see what I ' m stating? I didn ' t desire
to get obtain okay fine for the Reeces Peanut Butter Cups I told you aboutAround Let ' s jump towards the other one actual quick.
of news stories really similar to it. A canto firm is a swiftly growing start.
up organization its document caretaker that was worked with 9 months ago left town after he had uncovered.
a large sum of cash had vanished over the past 3 months an audit disclosed that.
the document keeper bit composed and also authorized numerous checks made payable to her fiancé as well as taped.
the checks as salary expense.The fiancé who cashed the checks yet never. functioned for the firm, left town with the document keeper. Therefore the business sustained a without insurance. loss of 84,000. Examine their inner control system as well as. indicate which principles were disregarded.
What do you believe, which ones were ignored? “Insure assets as well as bond key staff members? “” Ok, they didn ' t guarantee their assets or” bond. crucial workers, because it claims they lost all the cash. Ok, great, what else? “Splitting up of tasks.” Separation of jobs, or “different document maintaining. from -different document avoiding guardianship of possessions.
She ' s the best girl in the world, we don ' t. have to worry about'her, she ' s great. One various other point I ' d possibly include is they put on ' t.- it didn ' t seem like they were doing independent reviews.Ok? That ' s a common means to take from a business,.
Ok, and also they get paid every week, as well as they'' re. Ok?
Any type of others that you can think of? No question they didn'' t ' feel like they needed.
loaded with stability and also character.Ok? You require
to have these points in location. Alright, allowed'' s most likely to a little lecture right here,.
Now why do we talk regarding cash money in the interior. Well that'' s since the much more fluid something. As well as cash money is the most liquid of all.
Because there'' s cash everywhere, isn ' t there? It ' s extremely fluid; a poker chip is incredibly.
Ok? Currently you desire to divide your handling of. Well this implies the individual that writes checks.
or they can create themselves a check and change it out. Money receipts need to be without delay transferred.
in the financial institution. You ever before function in a dining establishment as well as you go like,.
Ok? It'' s not prone to fraudulence. You put on'' t just stick a number of twenty-dollar.
Ok? Um, now when we chat concerning cash money we'' re
accounts, accessibility to interest-bearing accounts. I would certainly put casino poker chips up right here. Are online poker chips cash? No, but they virtually can be treated as.
what we'' re going to speak about in a 2nd, a cash equivalent almost.But this is any access to the firm ' s money,. If it ' s by check or credit rating card or debit card or whatever, also. Cash money matchings are those things that practically.
not money, but they'' re short term and they are so fluid that we almost treat them as.
a money matching. Such as like a 90 day deposit slip. We know what these points are worth cash-wise.
and also if it'' s a financial investment they'' re so close to maturity date that they'' re not even sensitive.
to any rates of interest changes that could take place. So we wish to secure our money as well as our cash money.
Ok, of the counter money invoices. If we don'' t offer you a receipt your dish is. That ' s their attempt to get everything in.
the sales register with a secured record. You wish to compare the sales register document.
At the end of the day with the cash money that'' s in there? This is called a settlement of the cash money.
drawer, or the cash register.Ok? Bank bank employees need to do this at the end of. each shift. What happens if you obtain money invoices by mail? Once more, meaning mainly checks, individuals wear ' t. send out money in the mail, however getting'checks in the mail. Well, you want to divide the responsibilities,. possibly have two people open the mail.
You provide the money to the cashier ' s workplace. as well as you offer the list to'the audit division, to ensure that the exact same individual doesn ' t have wardship. as well as recordkeeping.
What concerning disbursements? Once more, you make your disbursements by check,. and we ' ll speak about the exception, petty cash money, in a minute.You intend to divide authorization for check.
signing from recordkeeping, when again the owner of the business is the just one that can. sign a check. So many times here ' s what occurs, the.
owner gets careless as well as just assumes, you understand'what Barbara I ' m going to place you on the monitoring. account this is insane, due to the fact that I ' m constantly gone playing golf and also I trust you, you ' ve been. here 3 years, you'appear like a fantastic female, I ' m mosting likely to
proceed and give you check finalizing. capacity, and that is the beginning of the end.Because now you ' ve provided the individual that has. recordkeeping responsibilities custody of the possessions, checks.'As well as they begin creating themselves checks. Ok? Don ' t do that. It discusses a coupon system. What is a voucher system? Well a coupon system the treatments and also plans. in area for making money disbursements. Here is an instance, coming off the PowerPoints. Let ' s state that you individuals
are staff members at my. company, allow ' s claim that you need a brand-new computer system- you ' re a staff member of mine as well as you require. a new computer. Well you submit a request, I the owner authorize. that request, therefore I give it my acquiring department, Matt.Ok? He acquires it, and when the computer comes. in it is available in to you, and also you
fill out a receiving report that this computer was received.
? Kim, you after that install it and sign an item. of paper that states this was mounted in her workplace. Ok? When the invoice comes in, you ' re my. accountant Allie, you take all these records, the acquisition demand, the getting report,. etc., make sure that they all straighten with each other as well as you prepare the check to be paid and staple. all of it with each other. And also after that you provide it to me to sign and also I look.
through it make certain everything looks excellent. That ' s like a coupon system. You see what I ' m saying? Permissions, finalizings, keeping those documents.
This following slide gives you a great deal of examples. of things you could find in a coupon system, invoice approvals, receiving reports, purchase. orders, acquisition requests. Even the check itself belongs to the validation. of that payment. Ok? So when you make cash money repayments you experience. this process.Now this process can take a little while,. can ' t it? To make sure that is why we have something called a. minor cash money system of control. Ok? Allow ' s rehash that you men are employees
. at my firm and let ' s say suddenly you need to print out a record that you ' re.
going to give a client that your going to fulfill in a couple hours.
As well as we run out printer'cartridges, and. the printer doesn ' t have any ink. We wear ' t want to go through this process. where everyone has to do this, right? Because that takes a while? What a petty money fund is normally like. a little metal box where you keep like 500 dollars cash money that you can go make a fast. purchase with.Anybody ever functioned where they have something. like that? It ' s extremely common, ok? And absolutely if you say, ok I ' ve reached go. to Office Max and obtain some printer cartridges.
Well definitely what am I going to want you. Currently what ' s the worst that could occur if. I have a 500-dollar petty cash fund.
A person can steal all 500-dollars. That ' s a downer, however you ' re probably not going. to go under.'Ok? You have to have a means like this were. individuals might make a fast acquisition. Because the voucher system while that is the. liked technique, occasionally it doesn ' t make good sense due to the fact that you need some cash right now.
to do something. Ok? Make feeling? Right here ' s the way this functions though, on a simple.
Well at that point there ' s just 350 bucks. There ' s likewise a receipt for a 150 dollars
,. Allow ' s claim you go acquire some pizza for the.
Well currently we only have 300 bucks cash money.
However we better have another receipt for 50. bucks. You see what I ' m saying? That amounts to 500 bucks. Currently at some time you Need to renew this. little box, put on ' t you.
Established up as your petty money fund you create a check as well as you make this journal entrance. You debit minor cash money for 400 as well as you credit. You obtain invoices as well as if there ' s a lack of.
Currently, there ' s additionally still some cash money in there. We open up this steel box, there'' s four receipts,. Currently it ' s time to renew it.
Well the initial concern I always ask is, if. I wish to have 400 dollars therein, which is what we set it up for, as well as we just have.
137.80 how much more cash do I have to place in that box to bring it back up to 400? Now below'' s how you do the journal entry, as well as.
I like to think of it as symphonious do these 3 steps and also you won'' t make a mistake. Also when I'put on ' t do these 3 steps in. the order I ' m providing to you, that is when a blunder is made by me. The initial thing you do is credit report cash, you.
wear'' t credit score petty cash money, you credit cash, for the quantity of money you need to place in.
package to bring it approximately its initial amount. Currently, we had 137.80, remedy? So we need to go to the financial institution and get 262.20.
out of the money account, and placed it in this box to bring it as much as 400. That'' s the very first point you do. The second thing you do. is you experience those receipts as well as you record them in your books. So for the traveling cost receipt you
debit. travel expenditure. If there was something for entertainment for.
93.42 you debit amusement cost for 93.42.
Postage cost for 55 bucks, you debit.
that. Workplace supplies cost, you debit that. To make sure that'' s the second action is you simply image.
yourself going via these receipts and videotaping each one in the correct account they.
That'' s the 2nd step. We got the initial step, we got the 2nd.
step. The third step then, is if necessary, if the.
journal entrance doesn'' t balance, your mosting likely to either debit or credit report this account called.
Money Over as well as Brief. We were short 2 dollars in the petty cash money.
fund. Currently are you going to freak out over 2.
May have simply been a blunder. You'' re either going to debit or credit score.
Cash Over as well as Short for whatever you need to to make this journal entrance equilibrium, that'' s. your last and also third action. Currently Cash Money Over and also Short is a revenue statement.
account as well as it can have debit equilibrium or a credit equilibrium. If you are short cash it has a debit balance,.
like an expense, as well as that'' s the situation here.You can have much more
money in there after that you were. supposed to and also there we would attribute Money Over and Short. Do you think you normally have a debit equilibrium. in your Cash money Over as well as Brief, or a credit report
equilibrium? A debit. Since normally if you break down to much modification. to someone their not going to state anything,
right? Yet, if you offer to little bit, they ' ll tell. you you shorted them. Does that make good sense? Ok
. SO those are the actions to restore the cash. fund. I desire when you do your homework tonight.
you to do those 3 steps when it ' s time to renew your petty money fund. How much money do I have to place in there to. bring it up to the called for amount, is the very first step.The 2nd action is you go through those receipts. and you tape them in the appropriate accounts. And the 3rd step is you debit or debt. Money Over and also Short for whatever you have to to make that journal entry balance. As well as if that account doesn ' t have a large. balance your possibly just not going to bother with it.
It ' s a cost-benefit kind of deal.Ok? You can review regarding that, however why don ' t. you go ahead and do, um let me compose your research down. As well as I ' ll put it up here on the expenses for.