Acct 504 Case 2

In: Business and Management

Submitted By rdocktor
Words 2028
Pages 9
Prepared for LJB Company President

Evaluation of Internal Controls

Prepared by XXXX XXXXX ACCT 591 Acct Fin: Managerial Use,Anlys
September 12, 20xx
DeVry University

Table of Contents

Introduction of Evaluation 2
New Regulations – Public vs. Private 3
Current Internal Controls – Good 4
Current Internal Controls – Need Improvements 5
Reflection 7
References 8

Introduction of Evaluation

My accounting firm was asked to evaluate the LJB Company for evidence of Internal Control issues. It is also my understanding that your company, LJB Company, wishes to move forward and become a public entity. I’m pleased my firm can be of assistance in helping your company make this transaction. First, we must review any new rules or regulations that apply to private companies converting public. Good corporate governance within an organization may make a company more attractive to potential buyers, investors, and other capital sources. Under Sarbanes-Oxley, all public traded companies must follow a set of new controls. U.S. corporations are required to maintain an adequate system of internal controls. Corporate executives and boards of directors must ensure these controls are reliable and effective. As with any business, the transformation of going from a private to public requires some extensive planning and preparation. It is recommended LJB being a relatively small sized company in terms of its employees should re-evaluate the costs versus the benefits of being a public traded company. If LJB decides to issue stock it would be wise to answer the following questions 1) How many shares should be authorized for sale? 2) How to issue the stock? 3) What value should be assigned to the stock? The content of this Internal Control report is based on the related methods and measures adopted within an organization to…...

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