Discuss how the Sarbanes-Oxley Act has increased the importance of internal control to top managers of a company.

A local bank reported that it lost $150,000 as the result of an employee fraud. Edward Jasso is not clear on what is meant by an “employee fraud.” Explain the meaning of fraud to Edward and give an
example of frauds that might occur at a bank.

2. Fraud experts often say that there are three primary factors that
contribute to employee fraud. Identify the three factors and explain
what is meant by each.

3. Identify the fi ve components of a good internal control system.

4. “Internal control is concerned only with enhancing the accuracy
of the accounting records.” Do you agree? Explain.

5. Discuss how the Sarbanes-Oxley Act has increased the importance of internal control to top managers of a company.