- bank reconciliation
- internal financial report that explains and documents any differences that may exist between a balance within a checking account and the company’s records
- bank service fee
- fee often charged by a bank each month for management of the bank account
- chief executive officer (CEO)
- executive within a company with the highest ranking title who has the overall responsibility for the management of a company; reports to the board of directors
- chief financial officer (CFO)
- corporation officer who reports to the CEO and oversees all of the accounting and finance concerns of a company
- collusion
- private cooperation or agreement, between more than one person, primarily for a deceitful, illegal, or immoral cause or purpose
- Committee of Sponsoring Organizations (COSO)
- independent, private-sector group whose five sponsoring organizations periodically identify and address specific accounting issues or projects related to internal controls
- control lapse
- when there is a deviation from standard control protocol that leads to a failure in the internal control and/or fraud prevention processes or systems
- cooking the books
- (also, financial statement fraud) financial statements are used to conceal the actual financial condition of a company or to hide specific transactions that may be illegal
- cybersecurity
- practice of protecting software, hardware, and data from digital attacks
- deposit in transit
- deposit that was made by the business and recorded on its books but has not yet been recorded by the bank
- external auditor
- generally works for an outside CPA firm or his or her own private practice and conducts audits and other assignments, such as reviews
- financial statement fraud
- using financial statements to conceal the actual financial condition of a company or to hide specific transactions that may be illegal
- fraud
- act of intentionally deceiving a person or organization or misrepresenting a relationship in order to secure some type of benefit, either financial or nonfinancial
- fraud triangle
- concept explaining the reasoning behind a person’s decision to commit fraud; the three elements are perceived opportunity, rationalization, and incentive
- imprest account
- account that is only debited when the account is established or the total ending balance is increased
- internal auditor
- employee of an organization whose job is to provide an independent and objective evaluation of the company’s accounting and operational activities
- internal control system
- sum of all internal controls and policies within an organization that protect assets and data
- internal controls
- systems used by an organization to manage risk and diminish the occurrence of fraud, consisting of the control environment, the accounting system, and control activities
- nonsufficient funds (NSF) check
- check written for an amount that is greater than the balance in the checking account
- outstanding check
- check that was written and deducted from the financial records of the company but has not been cashed by the recipient, so the amount has not been removed from the bank account
- petty cash fund
- amount of cash held on hand to be used to make payments for small day-to-day purchases
- Public Company Accounting Oversight Board (PCAOB)
- organization created under the Sarbanes-Oxley Act to regulate conflict, control disclosures, and set sanction guidelines for any violation of regulation
- publicly traded company
- company whose stock is traded (bought and sold) on an organized stock exchange
- revenue recognition
- accounting for revenue when the company has met its obligation on a contract
- Sarbanes-Oxley Act (SOX)
- federal law that regulates business practices; intended to protect investors by enhancing the accuracy and reliability of corporate financial statements and disclosures through governance guidelines including sanctions for criminal conduct
- special purpose entities
- separate, often complicated legal entities that are often used to absorb risk for a corporation