Case Study 2 Internal Control 1. Inform the President of any new internal control requirements if the company decides to go public. The interest of the company going public will be having a successful outcome, if all the required tests are properly administered. The Sarbanes Oxley Act of 2002, requires documentation of controls and external auditors to test controls, they need to write a report of the effectiveness. The importance of design, testing, and auditing of controls are needed to build
Internal Control Recommendations This memorandum is being presented to inform you of new internal control requirements should your company decide to go public, internal controls currently being utilized by your company, areas that require the implementation of internal controls in your company, and recommendations for improvement. If your company decides to go public, you need to be aware of the requirements under the Sarbanes-Oxley Act of 2002 (SOX). Under this act, publicly traded U.S. companies
enforcement of proper internal control procedures. LJB will need to “meet additional requirements and continuing obligations as a public company that may require new skills sets, additional resources and changes to the business” (PricewaterhouseCoopers, 2010). This simply means that the company needs to implement internal control measures that will satisfy the requirements of the Sarbanes-Oxley Act of 2002 (SOX) section 404 and meet the entire five interrelated internal control components. Mr. President
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
DATE: February 1, 2012 TO: John Smith, President LJB Company FROM: SUBJECT: Internal Control Requirements Attached are my findings regarding the internal controls for LJB Company. As we discussed, you and the leadership team need to know where the company stands with regards to its current system for internal controls and an acceptable internal control system for the company if the company were to go public. Feel free to contact me if you have any questions or concerns.
dyKeller Graduate School of Management of DeVry University The LJB Internal Control: Review and Recommendations by Dmitry Simakovich Professor Marsh, Malinda Accounting and Finance: Managerial Use and Analysis October 7, 2012 Table of Contents Introduction............................................................................................................3 I. New internal control requirements........................................................................
system controls has been conducted for LBJ Company prior to going public. In order to detect and minimize the potential for fraud, the following control activities were audited: establishment of responsibilities, segregation of duties, documentation procedures, physical controls, independent internal verification, and human resource controls. All are important for restricting responsibility and reduce the possibility of abuse. Report After reviewing the current system of internal controls the following
Case Study A: Paragraph 1: Segregation of duties and internal checks of bank reconciliation is the main weaknesses in this paragraph. An error or fraud that may arise from this weaknesses is that the new accountant, John Edward may input any figures or amounts for bank deposit because he is the only one had full responsibility for making bank deposits, the monthly bank reconciliation etc. Not only that, but he may make errors in making change, or not all takings are banked for the
Internal Controls Jason Kempen XACC/280 January 16, 2011 Hope Piggee Internal Controls The accounting system gives businesses certain rules to follow when documenting financial information and other data. The three key branches within the accounting structure, of analysis, design, and implementation must be partnered with a system of control. The internal control is a system within a system and has a major role in how good of the accounting system works. The internal controls protect businesses