Premium Essay

Case Study 1 Acct504

In: Business and Management

Submitted By hii13
Words 2041
Pages 9
Introduction
LJB Company, a local distributor, is planning on going public in the future and has asked Lexary Accountants, Inc. to assist in this process by evaluating their system of internal control. The organization is committed to its customers and works to minimize waste by focusing all of its resources on producing the best possible value for customers, and being a lean organization, their investments are carefully considered and only made when it is clear that a long-term financial advantage exists in doing so. In going public, the President wants their organization's mission to remain in clear focus and wants to know the impact of any new regulations required for the company if they go public. With the promotion of the staff that is responsible for working on this evaluation at Lexary Accountants, Inc., I have been assigned to generate recommendations for my partner to share with the President of LJB Company.
Lexary Accountant, Inc.’s Facts and Findings
The organization has one accountant who serves as Treasurer and Controller who is also in charge of purchasing and paying for supplies. He receives checks, completes the monthly bank reconciliation, uses pre-numbered invoices and wants to buy an indelible ink machine to print checks. In addition to these responsibilities, he is responsible for picking up paychecks and safeguarding paychecks in a safe in his office. Both him and the President interviews and approves all new hires. Petty cash is easily available to all employees, and only need to place a note when there is a need for cash. An employee who was fired for viewing pornography on the company’s computer was found to be a convicted felon who served time for molesting children.
Lexary Accountants, Inc. applaud the extraordinary faith that the organization have on its long-term employee while at the same time acknowledges that the

Similar Documents

Free Essay

Study Guide Acct 504

...College  of  Business  &   Management   ACCT504  Student  Success  Guide   1       Table  of  Contents   Why  a  success  guide?  .................................................................................................................................  3   What  makes  accounting  challenging?  ........................................................................................................  3   How  should  I  approach  the  course?  ...........................................................................................................  3   Threaded  Discussions..............................................................................................................................  4   Homework  Assignments  .........................................................................................................................  4   Course  Project  .........................................................................................................................................  5   Midterm  Exam  ........................................................................................................................................  5   Final  Exam  ...............................................................................................................................................  5   What  resources  are  available?   ...........................................................................................................

Words: 1044 - Pages: 5

Premium Essay

Case Study a Letter to the Manager

...Case Study (Chapter 1, page 17) Question 1 What are the real problems that the customer is highlighting? Firstly, the problem that customer highlighting is automatic debiting the customer account by way of penalty. This action cause the customer has to rethink his errant financial way. The bank should having a notice or inform to their customers before debiting any penalty. This may cause many of customers that face the financial problem to fall into difficulty. Besides, the customer notices he cannot contact to employee over the time. The customers are confronted by the impersonal ever-changing, pre-recorded, faceless entity which the bank has become. The customers want to deal with a flesh and blood person but not the automated voice phone system. This impersonal conversation will make customer loss of confident about what the customer inquire. Moreover, customer will get charge for the advertising material sent by bank. It charges for $2.00 per page customer read. For the bank nominated contact, that will be billed at $5 per minute. Bank should be let the customer know early for the reading fees or ask for customer permission whether having interest about the advertising material. If not, bank should not send to them. This may causes the customer read on it unconsciously. To helping the customer, customer service should not be charge. Lastly, the problem is the automated voice phone system of the bank. The customer contact to the bank need to go through very long...

Words: 501 - Pages: 3

Free Essay

Mr. Cat

...ACCT504 Case Study 2 1. Inform the president of any new internal control requirements if the company decides to go public. (7 points) I would inform the president of the following controls to make the company better. Background checks for employees should be number one to avoid any issues down the line. The idea is to install some type of filters that automatically checks for strange behaviors. The president should also considered, 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) the accountant do multiple jobs is not probably a good idea. It sounds like the company is trying to budget themselves to a minimum. At first it sounds like a good idea, but guess what? – We are humans and need a break once in a while otherwise we will go to an extreme where we could overload. It is good to have multitasked persons in your company, but the employer also needs to act and decide when enough is enough. 3. Advise the president of what the company is doing wrong (they are definitely doing some things poorly). Please be sure to include the internal-control principle that is being violated along with a recommendation for improvement. (20 points) the company needs to be more involved and take actions...

Words: 317 - Pages: 2

Premium Essay

Acct504

...ACCT504 Week 1 Objectives (JAN15) 1 of 2 https://devry.equella.ecollege.com/file/c3a70b64-5599-41cb-be31-a270... Print Given an annual report, the student should be able to read, understand, analyze, and explain a A company’s Balance Sheet to other decision makers and use the knowledge and skills to make business decisions. Key Concepts Understand the environment of financial reporting in the United States and explain the importance of generally accepted accounting principles. Explain the meaning and purpose of a balance sheet and the items that appear in the balance sheet. Determine the interrelationship among the basic financial statements. Analyze the relationship between certain items in the balance sheet and the income statement with the help of ratio analysis. Evaluate the way that different assets, liabilities, and stockholders' equity items are presented in a balance sheet. Given an annual report, the student should be able to read, understand, analyze, and explain a B company’s Income Statement to other decision makers and use the knowledge and skills to make business decisions. Key Concepts Explain the meaning and purpose of an income statement and the items that appear in the income statement. Determine the interrelationship among the basic financial statements. Analyze the relationship between certain items in the balance sheet and the income statement with the help of ratio analysis. Evaluate the way that different revenues, expenses...

Words: 125075 - Pages: 501

Premium Essay

Acct504 Final Exam Study Guide

...The ACCT504 Final Exam will be an online open-book, open-notes, open-computer exam with a time limit of three hours and 30 minutes. It will be worth 250 points or 25% of your course grade. The Final Exam is two pages long and will consist of 14 multiple-choice questions worth five points each and six essays worth 30 points. Some of the multiple-choice questions are problem-based. Of the six essays, five of the essays are problem-based since this is an Accounting course. Terminal Course Objectives A, B, C, D, E, F, and G are all addressed on this exam. You should review the following concepts for this exam. For the multiple choice questions worth a total of 70 points, you should know: 1. The characteristics of the corporate form of business. 2. About the term "cash dividend". 3. Which accounts have debit or credit balances. 4. The difference between cash-basis versus accrual-basis of accounting. 5. The meaning and implications of using FIFO, LIFO, and weighted average cost-flow assumptions. 6. How to calculate depreciation using the straight-line method. 7. The journal entry for the issuance of bonds (at par, discount, or premium) and for the issuance of stock (at par or above par). 8. How to determine the market value of a bond. 9. The various adjustments that are made to net income in arriving at net cash flow from operating activities. 10. The different tools of financial statement analysis, and how each tool is used, as well...

Words: 996 - Pages: 4

Premium Essay

Crime

...Case Study 2 ACCT504-Managerial Accounting and Finance Professor Dediemar February 10, 2014 Table of Contents Introduction………………………………………………………………3 Evaluation of Internal Controls at LBJ Company………………………..4 Efficiency of LBJ Company………..……………………………………5 Inefficient Practices at LBJ………………………………………………5 Recommendation to Purchase Indelible Ink Machine…………………….6 Conclusion……………………………………………………………….7 Work Cited...…………………………………………………………….8 To:   LBJ Company President From: Duc Nguyen, Accounting and Consulting Subject:   Evaluation of LJB Company’s Internal Control Structures Date: February 10, 2013 Introduction In this assessment we will attempt to evaluate and address the efficiency or inadequacy of the internal control procedures used within LBJ Company. Internal controls are a system of checks and balances designed to detect and prevent fraud and errors. The Sarbanes-Oxley Act requires U.S. companies to enhance their systems of internal control (Kimmel 186). Complying with the internal controls practices set forth by SOX Act prevents fraud, encourage efficiency and effectiveness of operations, and ensures a company’s compliance with applicable laws. Furthermore we see that because of Sox many companies are improving the quality of its financial reporting. Under SOX, all publicly traded U.S. companies are required to maintain a sufficient system of internal control. Corporate executives and boards of directors must ensure that these controls are reliable and...

Words: 1124 - Pages: 5

Premium Essay

Internal Control

...Internal Controls LJB Company Name Submitted to ACCT504 Accounting & Finance: Managerial Use & Analysis School: Submitted: Executive Summary This report provides an analysis and evaluation of the internal controls at the LJB Company and what is required before going public. We will touch base on IT Governance, Sarbanes-Oxley and COBIT, highlight items that LJB is doing right as well as those items LJB is doing wrong and a few improvements along the way. Company Overview LJB Company is a distributor of equipment for the surrounding areas. LJB is said to be a relatively lean organization which means that the company looks for ways to eliminate any unnecessary resources to operate at expected levels. LJB is looking to go public in the future. Internal Controls / IT Governance / Sarbanes-Oxley What are internal controls? The internal controls for any business consist of policies and procedures designed to provide management with reasonable assurance that the company achieves its objectives and goals. For any organization, public, private or governmental, there are benefits to using internal controls. * To ensure the confidence of the organizations’ constituencies (boards, employees, patients, donors, and students). * To assure there are checks and balances wherever there’s opportunity for mistakes or miscommunications. * To mitigate information technology risk protecting confidential records. * To help monitor assets of geographically...

Words: 2475 - Pages: 10