LJB Internal Control Procedures And Recommendations
Analysis of LJB Internal Control Procedures and Recommendations
Table of Contents
Introduction 3
Internal Controls Before Going Public 3
Correct Internal Control Procedures 4
Internal Control Discrepancies 4
Indelible Ink Recommendation 6
Summary 6
Works Cited 8
Analysis of LJB Internal Controls and Recommendations
Introduction Assigned to review the internal control procedures for LJB, I will take a close look at specific responsibilities that must be taken into consideration and action taken on before the company can go public. There are certain laws that must be followed as well as a set of control measures that are maintained. Currently, …show more content…
First and foremost, the petty cash box should be under some degree of physical security. This directly relates to the physical controls internal control principle. “Physical controls relate to the safeguarding of assets and enhance the accuracy and reliability of the accounting records.” (Kimmel, 2011, p. 342) The petty cash box should not be left in an unlocked drawer and needs to be kept in a secure place so not anyone has access to it. There should only certain people who have access to the box, which falls under the principle of establishment of responsibility. Once the petty cash box is secured and it is determined who has access to the box, proper documentation procedures should be implemented versus using hand written notes. This will insure that all cash transactions, regardless of the amount, are properly documented. All of the above implementations fall more specifically under cash distribution procedures. “To prevent those who have access to the petty cash box, a supervisor should conduct random inspections of the box to make sure receipts and/or proper documentation correctly reflects the amount in the box.” (Kimmel, 2011, p.
Table of Contents
Introduction 3
Internal Controls Before Going Public 3
Correct Internal Control Procedures 4
Internal Control Discrepancies 4
Indelible Ink Recommendation 6
Summary 6
Works Cited 8
Analysis of LJB Internal Controls and Recommendations
Introduction Assigned to review the internal control procedures for LJB, I will take a close look at specific responsibilities that must be taken into consideration and action taken on before the company can go public. There are certain laws that must be followed as well as a set of control measures that are maintained. Currently, …show more content…
First and foremost, the petty cash box should be under some degree of physical security. This directly relates to the physical controls internal control principle. “Physical controls relate to the safeguarding of assets and enhance the accuracy and reliability of the accounting records.” (Kimmel, 2011, p. 342) The petty cash box should not be left in an unlocked drawer and needs to be kept in a secure place so not anyone has access to it. There should only certain people who have access to the box, which falls under the principle of establishment of responsibility. Once the petty cash box is secured and it is determined who has access to the box, proper documentation procedures should be implemented versus using hand written notes. This will insure that all cash transactions, regardless of the amount, are properly documented. All of the above implementations fall more specifically under cash distribution procedures. “To prevent those who have access to the petty cash box, a supervisor should conduct random inspections of the box to make sure receipts and/or proper documentation correctly reflects the amount in the box.” (Kimmel, 2011, p.