43. Internal Control and Safeguards, cont.

• Understanding Internal Controls:

  • Always question the out of ordinary events, journal entries or transactions. Be weary of related party transactions and scrutinize them more closely.

  • People by nature take advantage of each other.

  • Is there a mindset of "How do I get over on the next guy?"

  • Watch out for the non-profits.

  • Examine the cash flow statement and study changes in working capital.