LBJ Company Case Study 2 -Internal Control

LBJ Company Case Study 2 -Internal Control - Here are my...

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Here are my comments for the President of LBJ: Impact of going public. Public companies, as the result of the passing of Sarbanes Oxley Act of 2002, are required to document their controls, test the documented controls and have their external auditors test their testing of controls and write a report about the effectiveness of controls surrounding financial reporting. So, there will be additional work on both designing, testing and auditing of controls if you decide to go public. Good practices. Having long term employees is a real asset and I commend you for retaining talent. The use of pre-numbered checks, pre-numbered invoices, locking up unused checks, having two managers approve new hires, and completing a bank reconciliation are "best practices" and I encourage you to stick with these procedures. Weak practices and recommendations. There are a number of practices, however, that make you vulnerable to errors, both intentional (fraud) and unintentional (mistakes).
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This note was uploaded on 03/18/2012 for the course ACCT 351 taught by Professor Lawson during the Spring '12 term at DeVry Houston.

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LBJ Company Case Study 2 -Internal Control - Here are my...

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