The board of directors is responsible for overseeing and exercising corporate powers and certifying the company’s business affairs while managing the goals and objectives for long-term interests of the shareholders. Organizational Annual Report and SEC Filing The SEC requires publically traded companies to file annual financial reports, and these reports are open to the public. Investors are interested in these reports because it helps in determining the financial health of a company. As a means for providing guidelines, principles, and objectives for the financial markets in the United States, the Sarbanes-Oxley Act of 2002 enhances the SEC’s roles for reforming corporate accountability. This also includes establishing a private-sector regulator to oversee the auditing profession to combat accounting fraud, and enhancing financial disclosures.
GAAP cover such things as revenue recognition, balance sheet item classification and outstanding share measurements. Companies are expected to follow GAAP rules when reporting their financial data via financial statements. If a financial statement is not prepared using GAAP principles, be very wary! Therefore, you still need to be careful and review other financial reports which can be altered. Convergence means that the U.S. Financial Accounting Standards Board (FASB) and the Independent Accounting Standard-setting Body (IASB) would continue working together to develop high quality, compatible accounting standards over time.
Internal control ACCT504 Financial accounting and Managerial use, analysis Keller Graduate school of Management Professor : Linval Frazer Week 5: Case study 2 Friday , April 4, 2014 Preparing LJB’s Internal Control Reporting for Public Trading Background LJB Company , a small business local distributor who understands to go public in the future, the company should be in accordance with the law and may need to take more stringent internal control principles . At the request of the president , an independent internal evaluation of internal controls was conducted to evaluate the direction of strength and weakness. Objective The objectives of this report should evaluate the existing controls and make recommendations that will ensure the companies assets and help get the most accurate financial information. Based on a system of internal checks and balances will be just in my recommendations to the president of the company, since most of the internal control systems provide for independent internal control; This principle involves the review of data prepared by employees. To get the maximum benefit from an independent internal control : Control values and Integrity from the top make it clear that it is unethical activities will not be accepted , and set the tone for the company's culture .
March 26th, 2012 To: President of LJB Company From: Erica Sylvester Topic: Discussion of Internal Controls-New Internal Controls Mandated if Company Goes Public, Current Good Practices and Suggested Improvements 1. New Internal Controls required if company decides to go public: a. If your company decides to become a publicly traded entity, then you will fall under the Sarbanes-Oxley Act (SOX) that requires for all traded U.S. corporations to maintain a system of internal controls that are ensured by executives and the board of directors to be reliable and effective. Independent and outside auditing will be required to check and attests to the adequacy and stringency of the internal control systems (1). Under SOX, your company will also be required to track your employees’ degrees and certifications to ensure that they meet the requirements of their job.
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.
| Team C | Memo To: WorldCom Executives From: Shernelle Rooplal, Wilder Pascual-Torress, Benson Paul, Monika Wojnakowska, Rosa Varrillas Date: June 13, 2011 Re: Audit Decision Dear Worldcom Executives, We as your audit team have decided to conduct a survey in several areas in particular within your company. 1. Corporate culture: a. We would like to gather more information in regards to communication between departments. b.
LBJ Company | Analysis of the Internal Controls Systems for LBJ Company | Evaluation Report | | Table of Contents Introduction 2 Components of Internal Control 3 Internal Control Procedures 4 Going Public and the Sarbanes—Oxley Act of 2002(SOX) 7 Analyzing LBJ Internal Controls System 10 Conclusion 12 Citations 13 Introduction To the President of LBJ Company, We have evaluated the Internal Control systems adopted by LBJ Company in accordance with the standards generally accepted accounting principles in the United States of America, based on the information provided to us. To perform this evaluation we were asked to analyze the effectiveness of LBJ’s internal control. Therefore, we have completed a list of its strength points and weakness points, providing recommendations for improving the deficiencies founded. Another point that was required from us was to provide information of any new regulations the company will need to implement in order to go public. To begin with this report we will first provide the description of the term Internal Controls, what it consists of, its components and procedures.
Consider the following: • What kinds of accounting, audit, and tax services does the firm provide? • Who is their target market(s) by industry and company? • Why would prospective clients give serious consideration to have KSM handle their accounting, audit and tax services? 3. Working in an ever changing accounting, audit and tax environment that is driven by change and strict regulatory adherence, how does the managing partner (David Resnick): • Ensure strict employee compliance to federal and state regulation and the company’s high ethical standards?
Laman Company Internal Controls System Evaluation Report Client: LJB Company Oct. 5, 2012 TABLE OF CONTENTS 1 Introduction 2 Definitions 2.1 Fraud 2.2 Internal Control 2.3 The Sarbanes-Oxley Act 3 Understanding of Internal Control 3.1 Five primary components of Internal Control Systems 3.2 Six Principles of Control Activities 4 Existing Conditions and Recommendations 4.1 Well Done Aspects 4.2 Aspects Need Improvements 5 Conclusion 1 INTRODUCTION This report is prepared in order to address the internal control problems that LJB Company is facing in their operation system. The company is planning to go public, so it is very important for the leadership to understand what qualifies a company to be a public one in completing their internal control and cash systems. The report first introduces key definitions and background information related to internal control system, and the principles the leadership needs to know. In order to go public, a company needs to fulfill new internal control requirements which are explained in the following chapter. Based on existing conditions the President provided, the report then confirms the correct things the company is performing.
XXXX XXXXX 555 Garth Street Omaha, NE 66345 May 29, 2012 Rob Talbit President LJB Company 1000 Main Street Omaha, NE 66225 Dear Mr. Talbit: I have recently been appointed to the role of evaluating LJB Company’s internal controls. If the company decides to go public there are additional internal controls that will need to be implemented and some that will need modified to meet the Sarbanes-Oxley Act requirements. First all officers of the company will have to establish a set list of internal control procedures. Those procedures should focus on steps that LJB Company can follow to ensure the accuracy of the financial reports. It would need to be reviewed and signed off on by all responsible officers.