Case Study 2

Dear President of LJB Company, I admit be assisting you with recommendations from the paygrade of your sexual breaks and planning to go public in the future. in that respect will be many new national reign over requirements if LJB Company decides to go public. To prevent and light upon fraud, Congress passed the Sarbanes-Oxley come of 2002(SOX). This act requires all U.S. corporations that argon publically traded to maintain an competent system of interior(a) fake. indispensable control is all methods take by an organization to safeguards its assets, enhance the dependability of its accounting records, add efficiency of operations and en legitimate 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 compulsory to hire nonparasitic outside auditors to attest to the adequacy of your cozy control system. Internal control systems consist of five sub divisions: a control environment, venture assessment, control activities, information and communication and monitoring. The most 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 forgiving 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 investments and give investors trust and confidence to inves! t in your company. Following SOX internal control requirements will be intimately worth the clip and expense for LJB Company if they decide to go public. There are some internal control principles that your company already own 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 issue checks also relates to this...If you want to get a generous essay, vow it on our website: OrderCustomPaper.com

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