Accounting 504 Internal Controls

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TABLE OF CONENTS INTRODUCTION PG 1 COMPANY EVALUATION PG 2 COMPLIANCE AND RECOMMENDATION PG 4 SUMMARY / CONCLUSION PG 5 REFERENCES PG 6 Introduction The primary objective of Accounting Ink, is to provide LJB Company with the required information to consider the regulations for converting to a publicly traded company. Within this analysis we will identify internal controls currently being used within business operation and the required mandated internal controls enforced by the Sarbanes Oxley Act. Internal Controls are established and or regulated by the Sarbanes-Oxley Act. There are six principles of internal controls 1) Establishment of responsibility, 2) Segregation of Duties, 3) Documentation Procedures, 4) Physical Controls, 5) Independent Internal Verification and 6) Human Resource Controls (Keller, 2012). Companies and their independent accountants or auditors should report the effectiveness of the companies internal controls based on these six principles. Publicly traded companies or those planning to go public are required to maintain internal controls and ensure compliance of government regulations. Company Evaluation As it relates to internal controls, the LJB Company is meeting and or adhering to some of the regulation requirements of the Sarbanes-Oxley Act within the daily operations of the business. I have provided a list below of the current processes being used within LJB Company that are being done exceptionally well. Establishing Responsibility: It is important to designate only one individual to handle specific tasks. Your accountant is the assigned individual to process checks, complete bank reconciliation and purchase supplies. Limiting access reduces fraud and maintains confidentiality. Documentation Procedures: Using pre-numbers invoices

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