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Case Study 2 Acct504

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Submitted By baghdadghost
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Dear Sir,

Based on the information which was relayed to me I wanted to formally address your concerns with internal control and acceptable usage guidelines at LBC company. As I am sure you are well aware, your intension on taking the company public will demand very tight internal controls and the highest standards for your employees. I have prepared a few remarks, and suggestions which I recommend you implement before your company goes public.

Internal controls comprises the enterprise of systems established in an organization to provide reasonable assurances that organizational objectives will be achieved. More specifically, internal controls objectives can be achieved based on the five following practices.

1. Ensuring the orderly and efficient conduct of business in respect of business standards and practices being in place and fully implemented. Controls means that clear guild-lines and standards are established and clearly understood by its employees.

2. Ensuring the completeness and accuracy of financial records. All financial transactions are fully and accurately recorded, assets and liabilities are correctly identified and properly valued, and that all revenues and costs are fully accounted for.

3. To prevent and detect fraudulent activity. Controls are necessary to show up any operational or financial disagreements that might be the result of theft or fraud. 4. Ensuring the timely and preparation of financial information which applies to statutory reporting and also management accounts to facilitate effective management decision-making.

5. To safeguard the assets of the business, controls are required to ensure they are properly protected from fraud, theft, waste, abuse and misappropriation.

Based on those objectives and the information which you have provided, I see several areas where improvement may be

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