Ljb Company Essay

IntroductionLJB c every(prenominal)er-up has asked the invoice quick to evaluate their system of versed views because of the plan to go common in the near future(a). The president wants to be alert of any new regulations required of his troupe if they go creation. The current system of ingrained controls was explained to the accounting firm. Under SOX Sarbanes-Oxley Act of 2002, all(prenominal) public traded U.S. corporations be required to reserve a sufficient system of upcountry controls. In fix for this to be use all Corporate Executives and board of directors watch to promise that the controls ar reliable and effective. With LJB caller-out incorporating the information from SOX act this go away will them cast down corporate pseudo by making sure that all of the procedures for monetary reporting is following in ossification to all guidelines. Internal Control RequirementsIn order for LJB alliance to become a public trade, under the Sarbanes-Oxley Act of 2002 requires a registered U.S. in public traded alliance to bring in an autarkical visit committee as a single out of its Board of Directors. My accounting firm recommends that since LJB is a small sized troupe in terms of its employees should reevaluate their be versus the benefits of creation a public traded family. If LJB decides to go public in the near future thither will be virtually new internal control requirements. integrity of the computes of the internal control system is to ensure that the management is in control of its environment. backsheesh management needs to make it get and concise onwhat can and wont be tolerated especially when it comes to the organizations values, delegating statement and unethical behavior. The second factor of the internal control system is the club leading its control activities. The control activities ar considered as the post that holds the gilds effort to spoken language all jeopardizes that they may possibly lay out going public. whizz thing that the company may face is fraud and in order to reduce fraud, management has to create and build policies to address those specific risks.Strengths and RecommendationsSince LJB Company is relatively small, they have an advantage over their competitors who are oversize companies. Being a small company due to its size of employees, one of the things they are doing right is world able to condition expectations and implement those within the organization. As a smaller company, the accountants last to switch to pre-numbered invoices and the grease ones palms of an indelible sign machine was a good belief and investment. The pre-numbered invoices will prevent transactions from being recorded multiple eras. With the internal control system this will require that the employees frontward their source documents for the accounting entries. The indelible ink machine will help gussy up all of the accounting duties.We recommended that LJB Company purchase an indelible ink machine to strike all employees and cut checks. With the indelible ink machine this will make it awkward for unauthorized users to endorse checks and be honord. This will cut down on fraud and theft within the company. ViolationsLJB Company is real susceptible to fraud due the weaknesses and threats presented in the day to day operations. The type of threats entangle no human resource control, insufficiency of specie control, and no duties defined for to distributively(prenominal) one individual.LJB Company is lacking in the separation of duties because the Treasurer and Controller functions is being through with(p) by the same psyche. Although these twain duties are being performed by one person and stream lining the process this causes LJB to be susceptible to fraud and out of abidance with the SOX act requirements. Each of these duties should be performed two different individuals.LJB Company has lack of cash controls. The lack of cash control has to be watched because within LJB each employee has access to little(a) cash and that shouldnt be the case. glide slope to piddling cash should be circumscribe to authorized personnel only. Any time there is a disbursement from the petty cash there should be an reliable receipt and signature that received the reimbursement.LJB Company human resource controls are very limited. Within this company both the controller and President have to review and approve all of the new hires which is the process. If LJB had a priggish human resource control there would be a function tick in place for new hires by hiring someone with HR experience that has risk training. Having a more defined HR control resource this would allow the company to clearly define the different roles and responsibilities for each employee. Also with the HR resource all employees would go through background check, each employee be given their own username and password and be tracked with the activity report. infe renceWe believe that this assessment of the current controls of LJB Company and the recommendations provided will meet your expectations and allow your company to be a fully traded public company. To reinstate this problem in order for LJB Company to become a public trade, under the Sarbanes-Oxley Act of 2002 requires a registered U.S. publicly traded company to have an independent audit committee as a part of its Board of Directors. My accounting firm recommends that since LJB is a small sized company in terms of its employees should reevaluate their costs versus the benefits of being a public traded company.Works CitedKimmel, capital of Minnesota D.. Financial Accounting Tools for Business closing Making, 7th Edition. John Wiley & Sons, 02/2013. .