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Internal Controls at Ljb

In: Business and Management

Submitted By ib203
Words 661
Pages 3
10/5/14
John Andrews
President, LJB Company
123 Main St
Atlanta, GA 30339

Re: Internal control for LJB Company

Dear Mr. Andrews,
Thank you for taking the time to meet my colleague Simon Weeks. Simon has since moved on to another role so I will be assisting you with this project. I look forward to providing sound advice on compliance policies and procedures for your company.
In order for LJB to go public, LJB will need to document internal controls. This is a first step in the initial public offering (IPO) process with the SEC. Your company will need to implement internal controls in order to be Sarbanes Oxley compliant. Sarbanes Oxley is an act that was passed by U.S. Congress in 2002 to protect investors from the possibility of fraudulent accounting activities by corporations. The Sarbanes-Oxley Act (SOX) mandated strict reforms to improve financial disclosures from corporations and prevent accounting fraud. SOX was driven in response to the large corporate accounting scandals in the early 2000s. Scandals such as Enron, Tyco, and WorldCom shook investor confidence in financial statements and required an overhaul of regulatory standards. In order for a company to remain SOX compliant, an auditor will need to review LJB’s financial statements and provide a report.
In reviewing your current process, there are some changes that need to be made. I think an indelible ink machine is a good idea for your company to have. Indelible ink cannot be erased or washed away so it will prevent fraud or potential forgery of company checks. There will need to be physical control put in place to ensure company checks are not stolen. The pre numbered invoices are helpful however there needs to be controls put in place to ensure they are being used correctly. I would suggest a log that is monitored by another employee and each time an invoiced is used, it is kept

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