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Case Study 2-Acc504

  • Date Submitted: 11/19/2013 09:28 PM
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Case Study 2:

DATE:    October 6th, 2013

The President
LJB Company

SUBJECT:        The need for Internal Controls

We would like to thank you for the opportunity provided to us in evaluating the internal control systems of your company.

As you know, internal control systems are paramount to securing the assets of any company or organization. In your case Control System will play an important role in limiting the risk of fraud or asset misappropriation. Internal controls ensure accuracy and reliability in accounting data, and secure policies within the organization.
We have analyzed the internal controls of LJB Company and the section below summarize our findings.   As we discussed, you and the leadership team need to know where the company stands with regards to its current system for internal controls and an acceptable internal control system for the company.

In the event LBJ Company would like to go public, an adequate framework for internal controls is necessary.   LBJ Company must provide investors and regulators assurance that operating and
financial objectives are being achieved in a manner that is consistent with standards and policies set by Section 404 of the Sarbanes-Oxley act. The goals and objectives that LBJ Company needs to focus on are
accurate financial reporting, compliance with laws and regulations, and effective operations. Privately held companies and other organizations also have an interest in the benefits that result from formalizing and documenting their internal control procedures. Companies must develop sound principles of control over financial reporting and continually assess that the controls are working.
As a publicly traded company the organization must document and test the internal controls over financial reporting (ICFR) and issue a statement along with the required SEC reporting that attests to the effectiveness of the internal controls and the financial reporting for the company (Security and...


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