Comparing Kohls and J.C. Penny Financial Statements Essay

2646 WordsMay 13, 201311 Pages
Professor Ed Kaplan Najedah Frederick April 7, 2013 Table of Contents Introduction……………………………………………………………….2 Sarbanes-Oxley Act of 2002……………………….………………………3 Internal Control…………………………………………………………….4 Components of Internal Control…………………………………………….4 Principles of Internal Control………………………………………………4-5 Establishment of Responsibility……………………………………5-6 Segregation of Duties………………………………………………6-7 Segregation of Record-Keeping from Physical Custody………….7-8 Documentation Procedures………………………………………..8 Physical Controls………………………………………………….8-9 Independent Internal Control……………………………………..9-10 Conclusion and Recommendations………………………………………11-12 References……………………………………………………………….13 Introduction Mr. President, I would, at first, like to formally thank you for choosing our firm to perform a comprehensive analysis of your internal control systems. Let me also take this opportunity to congratulate you on your decision to move your company public. We are fully aware that you could have chosen another firm to conduct this evaluation; however, you have chosen Fleming’s Accounting Firm. Given this, it is our primary objective to provide you with the information you need to successfully transition to public. LJB has expressed its interest in learning about all of the applicable regulatory requirements that relates to the area of internal control. In this document, I have provided you with the new internal control requirements for publicly traded companies. While conducting this assessment, I reviewed your company’s normal business operations and have provided some recommendations which would help you to enhance internal and external operations. Sarbanes Oxley Act of 2002 As a publicly traded company, it is important that you familiarize yourself with the Sarbanes- Oxley Act of 2002 (SOX). Under SOX, all publicly traded U.S. corporations, including LJB

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