Acct 504 Case Study 2

1024 WordsNov 2, 20145 Pages
Prepared for: The President of LJB Company October 5, 2014 Table of contents Introduction: _______________________________________________________________3 New internal control requirements: ______________________________________________3 What the company is doing right: _______________________________________________4 What the company is doing wrong: ______________________________________________5 Conclusion: ________________________________________________________________5 References: ________________________________________________________________7 Introduction: Internal control is one of the integral parts of an organization. It is a system which controls different types of risks,…show more content…
The company should also focus on the segregation of duties in the organization so as to have proper distribution of the duties. The company should also focus on managing the cash properly. The company should also focus on prenumbering the documents and the check as it will help in reducing the likelihood of the unauthorized transactions and embezzlements, all the documents should be accounted in sequence periodically. Advising the President of what the company is doing wrong The company has to be very strict with the quality of the employees, they should strongly consider the checking the background information of the employees being hired as the company has lately witnessed the password and security theft. The company should also focus on bonded employees which has fidelity bond which is an insurance cover so as to protect the employer if the employee is dishonest. Internal control has different control principles, establishing responsibility focuses on allotting different tasks to a concerned person, like each sales person should have an individual sales register. Different controls on physical, mechanical and electronic should be exercised as this will help in reducing the unauthorized use of different resources, this is essential for safeguarding assets and

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