Ljb Internal Controls

Analysis of LJB Internal Control Procedures and Recommendations

Table of Contents

Introduction 3

Internal Controls Before Going Public 3

Correct Internal Control Procedures 4

Internal Control Discrepancies 4

Indelible Ink Recommendation 6

Summary 6

Works Cited 8

Analysis of LJB Internal Controls and Recommendations

Introduction

Assigned to review the internal control procedures for LJB, I will take a close look at specific responsibilities that must be taken into consideration and action taken on before the company can go public. There are certain laws that must be followed as well as a set of control measures that are maintained. Currently, LJB has implanted specific control measures well but are lacking in many others. These violations of specific internal control principles could have major implications on going public and could have even worse effects on the company once it has gone public. I will take a look at their current status and make recommendations based on what measure they are using as well as whether or not they should make a future purchase that could improve the company’s success financially.

Internal Controls Before Going Public

First and foremost, when taking into consideration that LJB wants to go public, they must be very familiar with and adhere to the Sarbanes-Oxly Act very closely. Internal controls are an extremely important part of any business, especially when the company is public that has the interests of the general public and investors. I would strongly advise to create a board of senior leadership that can help develop their internal controls. According to the Sarbanes-Oxly Act, a Board of Directors should also be established with over half of the members residing outside of the company. (Soxlaw, 2006) It should be noted that a mandatory report of internal control procedures must be included in the annual Securities and Exchange Commission (SEC) report. Once these controls...