Answer 1. A fraud is a dishonest act by an employee that results in personal benefit to the employee at a cost to the employer.

Example: A bookkeeper in a small company diverted $750,000 of bill payments to a personal bank account over a three-year period. 2. The three main factors that contribute to fraud are opportunity, financial pressure and rationalization. a) El primer factor son las oportunidades. Las oportunidades se produce cuando el lugar de trabajo carece de controles suficientes para disuadir y detectar el fraude. b) The second factor is financial pressure. Financial pressure explains how the employee commits fraud because of personal financial problems caused by too much debt. You can also commit fraud because they want to lead a lifestyle that cannot afford the current salary.

c) The third factor is the rationalization. Rationalization is to justify fraud dishonest

to perform actions. One example, according to the book, is that employees justifying fraud because they believe they are underpaid, while the employer is making a lot of money. These employees are stealing because they believe they deserve to get paid more. 3. The five components of a good internal control are: a control environment, risk assessment, control activities, information and communication and monitoring.

4. Internal control consists of all the related methods and measures adopted within an organization to safeguard assets, enhance the reliability of accounting records, increase efficiency of operations, and ensure compliance with laws and regulations. 5. SOX require U.S. employers listed the bag to maintain an adequate system of internal control. The corporative executives and boards of directors should

ensure that these internal controls are reliable. In addition, external auditors must attest to the adequacy of internal control systems. Also, companies that do not comply will be fined and corporate officials can be imprisoned. 6. The main internal controls what businesses are: a control environment and control activities. 7. My answers are yes and no. Yes, because if you use the box that the other person is charging a violation of internal control that has the store. And not because if it starts to work it uses its own cash register it is no violation to the internal control and that you are using your box and not the other person. 8. There are two common and major applications and these are: a) Different individuals should be responsible for related activities. b) The responsibility for record-keeping for an asset should be separate from the physical custody of that asset. 9. Companies should establish procedures for documents. First, whenever

possible, companies should use renumbered documents, and all documents should be accounted for. Renumbering helps to prevents a transaction from being recorded more than once, from not being recorded at all. Second, the

control systems should require that employees promptly forward source documents for accounting entries to the accounting department. This control measure helps to ensure timely recording of the transactions and contributes directly to the accuracy and reliability of the accounting records. 10. Internal Control Objectives: a) Safes, vaults, and safety deposit boxes for cash and business papers. b) Locked warehouse and storage cabinets for inventories and records. c) Computer facilities with pass key access of fingerprint or eyeball scans. d) Alarms to prevent break-ins. e) Television monitors and garment sensors to deter theft. f) Time clocks for recording time worked. 11. a) The independent internal verification is a most internal control system. This principle involves the review of data prepared by employees. Companies should verify records periodically or on a surprise basis. An employee who is independent of the personnel responsible for the information should make the verifications. Discrepancies and exceptions should be reported to a management level that can take appropriate corrective action. b) Internal auditors are company employees who continuously evaluate the effectiveness of the company internal control systems. 12. a) Reasonable assurance of proper safeguarding of assets and reliability of the accounting records. The concept of reasonable assurance rest on the premise

that the costs of establishing control procedures should not exceed their expected benefits. b) The human element is an important factor in every system of internal control. A good system can become ineffective as a result of employee fatigue, carelessness, or indifference. 13. The human resource control is: a) Bond employees who handle cash bonding involves obtaining insurance protection against theft by employees. b) Rotate employees duties and require employees to take vacations - these measure deter employees from attempting thefts since they will not be able to permanently conceal their improper actions. c) Conduct thorough background checks - many believe that the most important and inexpensive measure any business can take to reduce employee theft and fraud is for the human resources department to conduct thorough background checks.