differences that arise between the balance on the bank statement and the balance on 643786

TERMS:

DEFINITIONS:

1.

Collusion

A. The “tone at the top” of the business.

2.

Controller

B. Control procedure that divides responsibility between two or more people.

3.

Lock box system

C. Outside accountants completely independent of the business who monitor the controls to ensure

4.

Firewalls

that the financial statements are presented fairly in accordance with GAAP.

5.

Encryption

D. After using this process, messages cannot be read by those who do not know the code.

6.

Control environment

E. Two or more people working together to circumvent internal controls and defraud a company.

7.

Documents

F.  The chief accounting officer of a company.

8.

Internal control

G. The organizational plan and all related measures that promote operational efficiency.

9.

External auditors

H. Prevents nonmembers from accessing the network but allows members to access the network.

10.

Timing difference

I. Without a sufficient one of these, information cannot properly be gathered and summarized.

11.

Information system

J. These should be pre numbered to prevent theft and inefficiency.

12.

Separation of duties

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.