|Case study : 2 |
|Internal Control Evaluation |
|LJB Company |
To whom to be submitted: Prof. Kim Chung
By whom to be submitted: Md.Tanvir Apon
Submission Date: ...view middle of the document...
Additionally, its rationale is assessment of performance in all units; ensuring policy acquiescence and grounding of precise and consistent accounting data. The subsequent guidelines for publicly traded corporations and entail observance meant for internal controls and procedures for monetary exposure has been established according to the Sarbanes-Oxley Act of 2002 (SOX). For confirming the effectiveness and reliability of internal control senior management have to be in charge. Outside auditors must every so often authenticate the precision of and observance to the internal controls. An internal control report will generated along with the information recorded during each fiscal year.
It is suggested that the LJB Company implement the scaffold set into view by the agency of Sponsoring Organizations of the Tread way Commission (COSO) and hang about in acquiescence with the SOX Act. This scaffold will follow six main beliefs of internal control. These are as follows:
➢ Human Resource Controls
➢ Establishment of Responsibility
➢ Documentation of Procedures
➢ Separation of Duties
➢ Physical Controls
➢ Self-governing Internal Verification
After completing of primary consideration of the existing internal controls by the Bruce Bulmer consultations at LJB Company, there are diverse good practices in effect where some areas to be improved ahead. At present LJB functions with a lean staff although this is excellent to maintain labor expenses down, it is suggested that should the company make a decision to go public that higher levels of controls be introduced.
The fact that the accountant is practicing physical control by locking pay checks into the safe place at day’s end but a supplementary safe and sound method would be to have need of employees to take delivery of their pay through direct deposit whereas my firm is in concurrence with the LJB accountant’s advice to purchase an indelible ink machine. The machine going to present LGB increased security aligned with check fraud and also advance physical control in times of disbursing check. In addition, it would be a good idea to introduce pre-numbered invoices.
Additionally, some more changes can be introduced to advance the...