Case study two Devry School acct 504 Essay

Internal control

ACCT504 Financial accounting and Bureaucratic use, evaluation

Keller Graduate student school of Management

Mentor: Linval Frazer

Week your five: Case study a couple of

Friday, The spring 4, 2014

Preparing LJB's Internal Control Reporting pertaining to Public Trading

Background LJB Company, a small business local distributor who understands to go general public in the future, the organization should be by law and may require more stringent internal control principles. At the request with the president, a completely independent internal analysis of interior controls was conducted to evaluate the course of strength and weakness.

Objective The objectives with this report should certainly evaluate the existing controls and make recommendations that will assure the companies possessions and help get the most accurate financial information.

Based on a process of internal checks and balances will probably be just inside my recommendations to the president in the company, seeing that most of the internal control systems provide for independent internal control; This theory involves the review of data prepared by employees. To find the maximum benefit coming from an independent interior control: Control values and Integrity in the top make it clear that it is unethical activities are not accepted, and set the strengthen for you can actually culture. There are numerous principles of management:

1 . Establishment of responsibility: administration is most successful when a single source can be responsible for the problem, including the consent and authorization of transactions.

Weakness: LJB has only one accountant who serves as treasurer and controller, which can boost the processes, nonetheless it creates a natural risk. Cashier handled in private. Accountant is indeed busy the company manages the peruse bit in a different way. All staff have access to the petty funds drawer and just put an email asking in the event they use one of the cash.


* Align the specific requirements of workers to limit access to certified employees so that the buyer is not the same person who authorizes the payment without the approval in the head at least. Otherwise, a person may make repayments that are made to yourself.

* Use exceptional passwords every employee to guard the purchasing system to provide adequate papers and data management.

2. Assign small cash custodian.

2 . Segregation of obligations: " After one staff should, devoid of duplication of effort, supply a sound basis for analyzing the work of another worker. " two

* Durability: Accountant receives the bank checks and wraps up the month-to-month bank getting back together. This power, as the bank and the firm maintain self-employed records, which may not always agree on what could possibly be a simple mistake of either party. To keep maximum benefits, a member of staff who has not any other tasks associated with cash should prepare a reconciliation.

* Weakness: A similar accountant all purchases of supplies and pays for these types of purchases per hour is a dual role. Petty cash managed all.

* Recommendation:

1 . Divide the purchase job to avoid the temptation of possible misuse. Keeper from the petty funds fund makes payments, nevertheless the reviews documentalist to recharge.

2 . Need the documentation of the client and payment of staff on vacation for different times during the the year.

three or more. Documentation and procedures to provide evidence that the transactions and events took place

* Durability: Accountant recently started applying pre- figures invoices.

* Weaknesses: Ambiguous procedures to get shipping requirements, invoices and time autographs in producing accounting documents. All personnel are required just to leave an email in the field, not source a receipt.

* Suggestion:

* Delivery document implies well have already been shipped, account sales means that the client continues to be announced. Employ remittance tips (mail receipts ), check out tapes, and deposit slides.

* Need signature to recognize the person in charge of...

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