they are currently using. Another thing the company is doing is using pre-numbered invoices. This will ensure no invoices are being paid twice and are paid in a timely manner within the regulations of GAAP. The company should not purchase the indelible ink machine to purchase their checks. That is an expense that can be saved‚ leaving the cash on hand to go to correcting issues within the organization. 3. Violations and Improvement Below are a list of items that should be addressed immediately
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procedures. The activities presented are the backbone in a company’s efforts to identify and address the risks a company faces‚ such as fraud. Segregation of Duties The most indispensable internal control system would be segregation of duties. With LBJ main purpose going public the company would benefit from Segregation of duties should the President correct the violated principle due to the individual responsible for the record keeping of this asset should be separated from the physical custody of
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To: President of LBJ Re: Internal Controls My Recommendation Impact of going public Public companies‚ as the result of the passing of Sarbanes Oxley Act of 2002‚ are necessary to document their controls‚ assess the documented controls and have their external auditors examine their testing of controls and note down a report about the efficiency of controls surrounding financial reporting. As a result‚ there will be supplementary work on designing‚ testing and auditing of controls if you come
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communication‚ and group monitoring should all be a part of the internal control report (Kimmel 349). From the given information‚ the internal control components of an effective internal control system are not as efficient as they can be. Because LBJ is trying to go public in the near future‚ there are some requirements that must be met in within the internal control system. It is the responsibility of the management on how important ethics are within the
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LBJ Company: Internal Control Evaluation Accounting 504: Managerial Use & Analysis Case Study 2 Written by: 8/10/13 This evaluation is being presented as an assessment of the preparedness of the LJB Company to go public at a future date. By researching current regulations regarding publicly traded firms we hope to prepare for a smooth transition into the trading market. The Sarbanes-Oxley Act of 2002 (SOX) has established the following guidelines
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References: Bernama. (2013‚ June 26). Shahidan: Tests show that ink used in ge was indelible. The Sun Daily. Retrieved from http://www.thesundaily.my/news/753841 The sun daily Anil‚ N. (2013‚ June 27). Malaysians let down by ‘indelible’ ink scandal. Retrieved from http://anilnetto.com/malaysian-politics/malaysian-elections/the-indelible-ink-scandal/ Wikipedia Ministry of Foreign Affairs‚ Malaysia (2013). Consular Information. Retrieved July 15‚ 2013
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the President whether or not they should buy the indelible ink machine. When your advice the President‚ please be sure to reference the applicable internal control principle that applies. From the passage that the accountant has recently started using prenumbered invoices following by the principle of internet control activities. Please find the Documentation Procedures passage below. From the passage‚ the president wants to buy an indelible ink machine to print their checks. In my opinion‚ I
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LJB Company: Internal Controls LJB Company: Internal Controls Contents Introduction 3 Internal Control Requirements 2 Strengths and Recommendations 2 Violations 3 Conclusion 4 Works Cited 4 Introduction LJB Company has asked the accounting firm to evaluate their system of internal controls because of the plan to go public in the near future. The president wants to be aware of any new regulations required of his company if they go public. The current system of internal controls
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protection‚ identity protection and ensuring that company resources are not misused 2. Advise the President of what the company is doing right (they are doing some things well) and also recommend to the President whether or not they should buy the indelible ink machine. When you advise the President‚ please be sure to reference the applicable internal control principle that applies. (13 points) Answer – Some of the things that the company is doing well and should continue are listed below and in accordance
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(Smith‚ 2001) 2) Correct Practices & Indelible Ink: * Using pre-numbered checks is good practice to be able to account for them in sequence and track payouts and will become a great part of the monitoring system. * Storing checks in a safe at the end of the business day is respectable practice as well. This becomes a good physical control in safeguarding the checks when they may be most vulnerable to theft or foul play. * Indelible Ink is another great physical control; if the
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