Summary of Internal Control Policies for President of Ljb Company

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Summary of Internal Control Policies for President of LJB Company By: Kenneth Cain February 10, 2013 1. Table of Contents 1. Introduction 2. Internal Control Strong Points 3. Internal Control Failures 4. New Internal Control Policies 5. Recommendations and Summary of new policies 1.0 Introduction This paper will explore the LJB Company and examine what they are doing right and also what they are doing wrong, with regard to internal controls. They have some controls that are in place that are benefiting the company and they are lacking some controls that could make the company stronger. I will examine their strengths and weaknesses and offer solutions to make the company stronger going forward. All of the aspects that this report looks at are important to the LJB because they are in the middle of great decision of whether or not to go public in the near future. Without having a great internal controls policy in place they could go public and then have some big fines or penalties if they are not up to the internal controls standards. The SEC does make sure that all companies have a great internal controls program because of the Sarbanes-Oxley of 2004. Section 404 is the part of the act that we will deal with in this paper due to it dealing with internal controls and the reporting of those internal controls on an annual basis. 2.0 Internal Control Strengths LJB Company does follow some good procedures for internal controls as of today. They are using pre numbered invoices which helps to comply with the documentation procedures of internal controls. Also the accountant does lock up the checks in the safe at the end of the day, so that they are not left out over the weekend and unsecure. This helps them to comply with the physical controls aspect of internal controls. LJB can build off of these strengths

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