Ljb Acct 504 Case Study 2

712 Words3 Pages
LJB Company Internal Control Memo After much needed observations and recommendations, I have come to the conclusion that your company is in need of some new internal controls. If your company is to go public, one thin you must do first is research and develops the necessary requirements to be in compliance with the Sarbanes-Oxley 404 act. This is mandatory for all companies going public so that key internal controls are in place for the companies to operate in compliance to the accounting standards. Those internal control standards are; A control environment, risk assessment, control activities, information and communication, and monitoring. They are the key things that you have to have in order before you can go public. Based on the information that was given to me and looking at the interworking of your organization, there are something’s that I feel you have established that are good for the organization of the company. One of the key internal controls is the control of the environment. The fact that you fired the employee that was watching pornography on company time and devices. This is very important because it sets a tone that there are rules in place and no exceptions will be tolerated. Another positive observation that I see with your organization is the use of risk assessment. The fact that you are looking at your organization from an external and internal assessment, is a great start to making sure that you are in compliance if you go public. You will need and want to be able to look at all the risk factors that are present and can happen. You would want to make sure that you have guidelines set up for you to manage this risk as they come. One thing that I do want to point out is that your company mentioned that they were interested in buying an indelible ink machine in order to print company checks. I don’t think this is a good idea. This is in
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