Case Study 2

Dear President of LJB Company,

I give be assisting you with recommendations from the evaluation of your internal breaks and planning to go public in the future. in that respect will be many new internal reign over requirements if LJB Company decides to go public. To prevent and detect fraud, Congress passed the Sarbanes-Oxley come of 2002(SOX). This act requires all U.S. corporations that are publicly traded to maintain an competent system of internal control. indispensable control is all methods take by an organization to safeguards its assets, enhance the reliability of its accounting records, add efficiency of operations and ensure compliance with laws and regulations. As president, it will be your responsibility to make sure that these controls are unquestionable and effective. You will also be required to hire nonparasitic outside auditors to attest to the adequacy of your internal control system. Internal control systems consist of five subdivisions: a control environment, venture assessment, control activities, information and communication and monitoring. The most important component is control activities beca habit it addresses risks companies face such as fraud.



The six principles of control activities are establishment of responsibility, segregation of duties, documentation procedures, physical controls, unconditional internal verification and human resource controls. If your partnership fails to tie up to these requirements, it will be fined and LJB officers can be imprisoned. SOX can do safeguard your investments and give investors trust and confidence to invest in your company. Following SOX internal control requirements will be intimately worth the time and expense for LJB Company if they decide to go public.
There are some internal control principles that your company already have in place and are doing correctly. The use of pre-numbered invoices relates to the documentation procedures internal control principle. An indelible ink elevator car to print checks also relates to this...If you want to get a generous essay, order it on our website: Orderessay



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