43954703205480Abraham Villegas
D03240387
Accounting 504
Professor Szafoni2/12/2014
4000020000Abraham Villegas
D03240387
Accounting 504
Professor Szafoni2/12/2014
26435056320155Heuristic Industries Internal Control Consultation Analysis
00Heuristic Industries Internal Control Consultation Analysis
908051510030LJB Company
00LJB Company
908052395855www.LJBCO.com
00www.LJBCO.com
81280214630Internal Controls
00Internal Controls

Table of Contents
I.Introduction
II.Assessment of Current Practice and Requirements
III.Recommendation for Improvement of Current Practice
IV.Summary
Section A - Introduction
This consultation sheds light on the assessment of current internal control procedures being conducted at LJB Company. The purpose of this document is to analyze and evaluate current procedures and policies being used at LJB, and follow up with advice and recommendations in order to ensure that LJB is in accordance with all State and Federal laws and regulations required to go public in the near future. These recommendations will aim to create a structured system designed to establish accuracy and accountability in LJB’s accounting activities.
Section B – Assessment
One of the very first barriers that LJB will have to overcome before becoming a publicly traded company will be to have all of their financial activities in accordance with Sarbanes-Oxley. The Sarbanes – Oxley Act of 2002 is a federal standard of internal control principles that need to be met in order to ensure the highest accuracy and accountability in the realm of accounting. The company must also be able to confirm the current adequacy of their systems by a third party source to prevent misrepresented information (Kimmel, 2011).
After conducting an initial analysis of LJB, Heuristic Industries determines that a majority of LJB’s current principles appear to meet the SOX Act of 2002. Monthly reconciliations along with the establishment of pre-numbered documentation procedures supply LJB with sufficient accountability of all their financial transactions. By having pre-numbered documentation, LJB can prevent duplication of transactions and other related entries. Furthermore, the security involved with uncollected checks upholds the protocols required by Sarbanes – Oxley.
Section C – Recommendations
By the authority vested in me through LJB, Heuristic Industries determines the following recommendations to LJB:
Purchase the inedible ink printer in order to provide additional security that will significantly reduce the risk of fraud, forging, and other criminal activities. By purchasing the printer, LJB ensures the strength of compliance towards the Sarbanes- Oxley Act.
Segregate integral duties of the company in order to separate job tasks that may have conflicts of interest. The less opportunity one has to commit fraud, the less chance of it actually happening. Giving different individuals related duties require them to check with each other in order to authorize certain actions.
Reform the current method of disbursement for petty cash. Establish new and secure documentation procedures that aim to establish accountability and physical security.
Find a more secure place to