Ljb Company Case Study 2

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LJB COMPANY | Internal Control | REQUIREMENTS AND REVISIONS | Prepared To: LJB Company’s President Prepared By: Yenny Gutierrez6/03/2013 | TABLE OF CONTENTS Introduction New Internal Control Requirement 4 Establishment of responsibility 4 Segregation of duties 4 Documentation procedures 4 Physical controls 4 Independent internal verification 5 Human Resources controls 5 Reviewing LJB Internal Controls 5 Pre numbered invoices 5 Ink machine 5 Safe Box 5 Recommendations to LJB Company 6 Purchasing and Paying for Supplies 6 Petty Cash 6 Assign Passwords 6 Human Resources 6 Summary and Conclusion 7 INTRODUCTION Internal…show more content…
The last requirement that I should mention to you is human resources controls; this principle will include: Bond employees who handle cash, rotate employees and require employees to take vacation and conduct backgrounds check. 2. Reviewing LJB internal controls: Now that you are fully aware of what the requirements are, I would like to start reviewing the internal controls that LJB Company has already implemented. It is my understanding that LJB Company has recently started using pre numbered invoices and I am glad to know that because as I mentioned before this would be part of the third requirement: Documentation procedures. The idea of buying an indelible ink machine to print the checks is definitely worth it and I believe you should go for it because this way the checks can’t be altered or deleted. Also, I know that you are currently using a safe box in the office to storage the checks in there once the accountant leaves the office; this is a good practice that shows physical control at LJB Company so unauthorized people wouldn’t have access to private information. LJB Company is going in the right direction and firing your employee for his behavior of misusing the computer of the company is another step towards development of good internal control; not having him and all employees with

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