Case Study 2

Dear President of LJB Company, I enforce be assisting you with recommendations from the military rating of your natural breaks and planning to go public in the future. in that respect will be many new privileged reign over requirements if LJB Company decides to go public. To prevent and reveal fraud, Congress passed the Sarbanes-Oxley come of 2002(SOX). This act requires all U.S. corporations that argon in public traded to maintain an competent system of congenital guarantee. 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 en accepted abidance 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 requisite to hire nonparasitic outside auditors to attest to the adequacy of your versed control system. Internal control systems consist of fi ve subdivisions: a control environment, venture assessment, control activities, information and communication and monitoring. The nearly important component is control activities beca habit it addresses risks companies face much(prenominal) as fraud.

The six principles of control activities are establishment of responsibility, sequestration of duties, documentation procedures, physical controls, unconditional internal verification and benignant 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 invest ments and give investors trust and confidenc! e to invest in your company. Following SOX internal control requirements will be intimately worth the cartridge clip and expense for LJB Company if they decide to go public. There are some internal control principles that your company already realize 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 bulls eye checks also relates to this...If you want to get a generous essay, nightspot it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper