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Case Study 2 Internal Controls

In: Business and Management

Submitted By MrsDris30
Words 260
Pages 2
Table of Contents

Internal Control Requirements………………………………………………….3
Bank Reconciliation…………………………………………………………………..4
Pre Numbered Invoices……………………………………………………………..4
Pay Checks………………………………………………………………………………..4
Indelible Machine……………………………………………………………………..4
Purchasing and Paying for Supplies…………………………………………..4
Human Resources……………………………………………………………………..4
Petty Cash…………………………………………………………………………………5
Assign Passwords………………………………………………………………………5
Review and Evaluation of Internal Controls………………………………6

Purpose
It is the policy of the LBJ to maintain an internal audit function as a means of providing all levels of management with information to control the operations, to provide the Board of Directors with information necessary to discharge its responsibilities and to assist management in reaching a conclusion about the overall effectiveness of the system of internal control. First, I will establish the legal requirement needed and the importance of internal controls for an organization. Then I will review the current policies and establish better internal controls for each area of concern. Once these policies have been instituted by the LJB Company, they should be ready to proceed with their plan to go public.
Internal control requirements
When the company decides to go public the requirements listed below will prove to be very helpful. It is the responsibility of top management to make it clear that the organization values integrity and that unethical activity will not be tolerated. This component is often referred to as the “tone at the top.” Control is most effective when only one person is responsible for a given task.
There are many accounting regulations required by a public company. All accounting reports must follow the FASB and SEC guidelines. However, the newest accounting guidelines fall under the Saranes-Oxley act...

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