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Date Submitted: 09/21/2013 11:27 AM
Establishing a Productive Internal Control
Hey, Hey Did You Hear?
Charmal Surney
Accounting and Finance 504
Professor Jim Gajda
August 3, 2013
Abstract
Everyone would jump at the chance to become their own boss and not have to answer to anyone. Make all the decisions and set your own rules as you go along. Well we all know that is not going to happen to 95% us living in this world, we will have to work for a living answering to a chain of command regardless how small or large the organization is. Every employee has an obligation to feel safe, become productive, and follow internal control in his/her work place. This literature review will explain several approaches an organization can take to establish an effective internal control. The participant in this review is LBJ Company who for the first time is thinking about going public. It will show the importance of the Internal Control System and how by following the rules and regulation will have a major impact on the company.
Hey, did you hear the big news that LJB Company is going public? When a company goes public there has to be some rules and regulations that must be followed in order to do so. There are several decisions that have to be made and the first one should be why do the company want or need to go public? There are phases (steps) a company has to make before they can officially sell stock. Once the Securities Exchange Commission declares LJB effective, the company will have to follow all the reporting requirements. For newly public companies such as LJB they are not required to provide a management’s assessment or auditors report until they file their second annual report with the SEC. They will be required to file annually Form 10K, quarterly reports on form 10-Q and all current reports on Form 8-K with the SEC on an ongoing basis.
This is where my accounting firm comes into play. The President of LJB Company has asked the firm to evaluate their internal control system. They...