Acct 504 Case Study 2
Internal Control Report
For LJB Company
Table of Contents
Introduction 3
IPO and Internal Controls 3
Successful Existing Internal Controls 4
Internal Controls for Consideration 4
Conclusion 5
Bibliography 6
Introduction
Internal controls are vital to any company’s business and financial sustainability. Internal controls consist of measures taken by a company safeguarding against fraud, and theft. Internal controls ensure accuracy and reliability in accounting data, and secure policies within the organization. Further, internal controls evaluate all levels of performance. These are addressed with five principles of internal control: Establishment of responsibility, Segregation of duties, Documentation procedures, Physical controls, Independent internal verification, and Human resource controls.
The 2002 Sarbanes-Oxley Act stresses importance upon guidelines of necessary internal controls for any publicly traded company or corporation. There are several practices LJB Company currently have in place, these will be addressed and should be continued. Finally, steps designed to strengthen the fiscal future of LJB Company and continued growth.
IPO and Internal Controls
Strict, multi-step requirements necessary for a company going public can be daunting and intimidating. A strong game plan involving the tightening of internal control policies is often the best place to start. These essential steps leave the company with a stronger foundation with many benefits to the company and their future stockholders.
Prior to 2002 the necessary steps were not required. Congress addressed concern at growing corporate fraud with the introduction of the Sarbanes-Oxley Act of 2002. Sarbanes-Oxley Act seeks to govern publicly traded companies and created auditing standards most specifically addressed are internal control audits.
For LJB Company
Table of Contents
Introduction 3
IPO and Internal Controls 3
Successful Existing Internal Controls 4
Internal Controls for Consideration 4
Conclusion 5
Bibliography 6
Introduction
Internal controls are vital to any company’s business and financial sustainability. Internal controls consist of measures taken by a company safeguarding against fraud, and theft. Internal controls ensure accuracy and reliability in accounting data, and secure policies within the organization. Further, internal controls evaluate all levels of performance. These are addressed with five principles of internal control: Establishment of responsibility, Segregation of duties, Documentation procedures, Physical controls, Independent internal verification, and Human resource controls.
The 2002 Sarbanes-Oxley Act stresses importance upon guidelines of necessary internal controls for any publicly traded company or corporation. There are several practices LJB Company currently have in place, these will be addressed and should be continued. Finally, steps designed to strengthen the fiscal future of LJB Company and continued growth.
IPO and Internal Controls
Strict, multi-step requirements necessary for a company going public can be daunting and intimidating. A strong game plan involving the tightening of internal control policies is often the best place to start. These essential steps leave the company with a stronger foundation with many benefits to the company and their future stockholders.
Prior to 2002 the necessary steps were not required. Congress addressed concern at growing corporate fraud with the introduction of the Sarbanes-Oxley Act of 2002. Sarbanes-Oxley Act seeks to govern publicly traded companies and created auditing standards most specifically addressed are internal control audits.
Bibliography: Admin. (2009, January). Core Points of the Sarbanes-Oxley Act. Tuesday, November 27, 2012. http://www.sarbanesoxleyfocus.com/core-points-of-the-sarbanes-oxley-act/ Addison-Hewitt Associates. (n.d). A Guide to Sarbanes-Oxley Section 302, and 404. Tuesday, November 27, 2012. http://www.soxlaw.com/s302.htm Deloitte. (n.d.). Ready for the IPO Spotlight? Strategies for Going Public, Being Public. Tuesday, November 27, 2012. http://www.deloitte.com/view/en_US/us/Services/audit-enterprise-risk-services/financial-instrument-valuation-securitization/financial-accounting-reporting/ipo-spotlight/index.htm Kimmel. Financial Accounting. 6. VitalSource Bookshelf. John Wiley & Sons, , Tuesday, November 27, 2012. http://devry.vitalsource.com/books/9781118233634/id/B7-2 [pic]