Ljb Company Essay

As Calletta’s CEO, Jan is facing a number of problems such as: lack of support from board members/investors, increasing employee costs, and protests against Calletta’s offshore facilities due to the growing concern of working conditions. Jan key issue on hand is the lack of support from board members and investors. Board Members and investors right now are not supporting Jan or her proposal due to a poor return on investments. Board Members are concerned about the rapid increase of employee cost the company is incurring. Calletta is incurring a 12% cost increase annually compared to an industry average rate of just 4% in the

According to the Sarbanes-Oxley Section 404 Act, it is the responsibility of the management to establish and maintain internal controls required for financial reporting. The company’s latest year assessment of

Clas Ohlson is a dedicated retailer of products and services for every small problem in your everyday life. Started as a mail order company in 1918, Clas Ohlson evolved into one of the biggest sellers, offering a wide range of products from five main categories: Home, electrical, leisure, hardware and multimedia. Through their product range of over 12,000 items, the store gives you thousands of ways to tackle every day practical problems. The company is expanding their business by offering new items, new stores and by developing operations in new markets. Clas Ohlson also aims to offer everything at affordable prices. Therefore, they regularly promote sales and offers where you can buy hundreds of products at fantastic discounts.

Under SOX Section 404, all publicly listed corporations are required to maintain an adequate system of internal control. Under SOX, corporate executives and the board of directors are personally responsible for making sure that the internal controls in place are effective and reliable. Independent auditors should also attest to the reliability of the said internal controls. Failure to do so would result to fines and/or imprisonment1.

Identify the potential risks which affect the company and manage these risks within its risk appetite;

Internal controls represent an organization’s processes and procedures used to meet its goals and objectives and serve as a defense in safeguarding assets and preventing and detecting errors, fraud, and abuse. Effective internal controls provide reasonable assurance that an organization’s objectives are achieved through (1) reliable financial reporting, (2) compliance with laws and regulations, and (3) effective and efficient operations. The passing of the Sarbanes-Oxley Act of 2002, as well as the numerous corporate frauds and bankruptcies over the past decade—including some

In addition to accountants providing many useful numbers that signal a company’s performance, they also prepare many useful documents and a code of ethics to make sure that all stakeholders have a clear picture on the business’s financial position. For instance, journaling is what accountants do after every transaction. These entries of what is exchanged in a business provide evidence that money deserves to be in a certain account. Especially since every journal entry needs a corresponding document that proves the record did happen, journals can be used by executives to see what really occurred in case a number in an account looks wrong (Schneider). It is also used when a government official suspects that the company is unfairly representing itself to either indict the business or prove its innocence. Journaling illustrates the importance of accounting since everything is documented and has proof for existence in the case of errors. One thing that journals go hand-in-hand with is the general ledger. This is the document that actually lists each individual account and the amount in it. It organizes the overall picture of every entity a business comes in contact with so that every important number can be put neatly into a financial statement.

can be done to ensure that the company will work in the best interest of the

Brenda Franklin had been serving Allied Tech for the past 8 years. As any other organisations, Brenda used to be a part of the lunch hour conversations with her colleagues. One day when her colleagues were discussing about corruption and politics, something occurred to her. As a result she prepared a list called “Ethically Dubious Conduct” and pasted it on the common notice board. Her colleagues were taken by surprise. Brenda was now anticipating the next lunch where she was expecting her list to be analysed among her colleagues.

The Sarbanes-Oxley Act (SOX) was enacted in July 30, 2002, by Congress to protect shareholders and the general public from fraudulent corporate practices and accounting errors and to maintain auditor independence.   In protecting the shareholders and the general public the SOX Act is intended to improve the transparency of the financial reporting.   Financial reports are to be certified by the Chief Executive Officer (CEO) and Chief Financial Officer (CFO) creating increased responsibility and independence with auditing by independent audit firms. In discussing the SOX Act, we will focus on how this act affects the CEOs; CFOs; outside independent audit firms; the advantages and a

The final responsibility for the integrity of an SEC registrant’s internal controls lies on the management team. U.S. companies need to refer to a comprehensive framework of internal control when assessing the quality of financial reporting to determine that financial statements are being presented under General Accepted Accounting Principles, GAAP. The widely used framework is referred as COSO, Committee of Sponsoring Organizations of the Treadway Commission, sponsored by the following organizations American Accounting Association, the American Institute of CPA’s, Financial Executives International, the Institute of Internal Auditors, and the Institute of Management Accountants. COSO’s defines internal control as:

Under the Sarbanes-Oxley Act of 2002, reports on internal control are required. Did the company’s management acknowledge its responsibility for establishing and

The control environment is what sets the tone for an organization and is the foundation for all other components of internal control. It provides discipline and structure and reflects the ethical values, integrity and competencies of the organization. The control environment is very important to effective internal control over financial reporting to an audit client like WorldCom, because good designs can prevent and detect frauds and errors. But because WorldCom had such a poor control environment, the company would require more testing for an audit. This shows that the board did not exercise oversight responsibilities over financial reporting or internal controls.

These changes were outlined in the Sarbanes Oxley Act of 2002 (SOX). SOX completely revolutionized financial reporting, requiring senior management of firms to sign off on each financial statement that the company issues. It also stipulated that wrongful doing can result in not only termination but also imprisonment. SOX amplified the requirement for companies, requiring firms to maintain proper levels of internal controls when it comes to operating activities. SOX also established the creation of the Public Company Accounting Oversight Board (PCAOB) which implemented stricter auditing standards for public accounting firms. Not only were accounting firms required to consider internal controls, but they were also required report any significant deficiency directly to the board of directors. SOX stressed the importance of internal controls, and within internal controls it established the need for segregation of duties. Since this time, there have been many additions to accounting policies regards segregations of duties, and many functions of the business process dedicated to it.

Effective internal controls protect a company’s assets, maintain compliance, improve operations, prevent fraud, and promote accuracy in financial reporting. In 1992 the