Many business processes are paired in give-get exchanges. Basic exchanges can be grouped into five major transaction cycles. A transaction cycle is an interlocking set ofbusiness transactions. Most business transactions can be aggregated into a relatively small number of transaction cycles related to the sale of goods, payments tosuppliers, payments toemployees, and payments tolenders. A key role of the accountant is to design an appropriate set of procedures, forms, and integrated controls for each of these transaction cycles, to mitigate the opportunities forfraud and ensure that transactions are processed in as reliable and consistent a manner as possible.To understand how fraud occurs within businesses is to understand how the cycles work within an accounting system. The most useful way to classify the activity of the fraudster is to discuss
briefly the five typical accounting cycles of any business where it will likely leave some kind of audit trail.
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1- Briefly, explain the five typical accounting cycles?
2- Describe the basic business activities and related information processing operations performed in each cycle.
3- Identify major threats in each cycle, and evaluate the adequacy of various control procedures for dealing with those threats.
4- One of the control activities is the segregation of duties. Briefly, explain the functions that should be separated?