Financial accounting and Managerial use Essay

Back fuzee LJB Company , a sm each(prenominal) transaction local distri onlyor who understands to go public in the future, the fraternity should be in accordance with the uprightness and may need to take more stringent essendial control regulations. At the request of the president, an independent home(a) evaluation of inborn controls was conducted to evaluate the direction of strength and weakness.Objective The objectives of this report should evaluate the existing controls and make advocateations that will ensure the companies as placeds and help bring out the about accurate financial information.Based on a trunk of internal checks and balances will be notwithstanding in my recommendations to the president of the troupe, since most of the internal control carcasss countenance for independent internal control This principle involves the review of data prep ared by employees. To get the maximum well-being from an independent internal control Control values and Int egrity from the roundabout make it clear that it is unethical activities will not be accepted, and set the t ane for the companys culture .There are some(prenominal) principles of management 1. Establishment of responsibility management is most effective when a single source may be responsible for the problem, including the authorization and plaudit of transactions.Weakness LJB has only one comptroller who serves as treasurer and accountant , which layabout optimize the processes , but it creates an inherent risk . Cashier handled conversationally . Accountant is so busy that the company handles the checkout bit other than . whole employees impart access to the petty specie drawer and just put a note asking if they use any of the cash. testimony* Align the specific obligations of employees to limit access to authorized employees so that the buyer is not the alike(p) person who authorizes the hire without the approval of the head at least . Otherwise , a person may make p ayments that are made to yourself.* do unique passwords per employee to protect the purchasing system to provide adequate enumerations and records management.* Assign petty cash custodian.2 . Segregation of duties after one employee should , without duplication of effort , provide a sound behind for evaluating the clip of another employee. 2* Strength Accountant receives the checks and completes the monthly strand reconciliation. This force , as the bank and the company maintain independent records , which may not always agree on what may be a simple mistake of either party. To maintain maximum benefits , a actor who has no other duties associated with cash should prepare a reconciliation.* Weakness The same accountant all purchases of supplies and pays for these purchases per hour is a dual role . bantam cash handled all .* Recommendation1. Divide the purchase task to nullify the temptation of possible abuse. Keeperof the petty cash fund makes payments , but the reviews a ccountant to recharge .2 . Require the authorization of the buyer and payment of employees on vacation at different times of the year.3 . support and procedures to provide evidence that the transactions and events occurred* Strength Accountant recently started victimization pre- numbered invoices.* Weaknesses Unclear procedures for shipping requirements , invoices and time tactile sensations in developing accounting documents . All employees are required only to leave a note in the box , not supply a receipt.* Recommendation* Delivery document indicates well have been shipped, invoice sales means that the client has been announced. Use remittance advice (mail receipts ) , cash register tapes, and deposit slips .* Require signature to identify the person responsible for the activity .* If possible , the user pre- numbered documents . It overly helps to ensure that the transaction is no recorded several times or not at all .* Require time when documents should be sent in accounting for timely accounting.* Require receipts for most, if not all operations on a small number of dollars.Note accountant wants to buy an indelible ink machine to print their checks. I would recommend the purchase of this equipment , depending on the cost-benefit analysis . Keep blank checks in safes with curb access willbe my first suggestion to cut pass immediately , with no additional costs. 4 . Physical control can be mechanical and electronic asset protection .* Strength sooner leaving for the weekend accountant , accountant will move checks in a safe in his office .* Weakness For salaries , checks selected accountant and left-hand(a) in his office for pick-up . Cashier box is not locked.* Recommendation* unlikeable storage inventory and records management and control at all times, and not just for the weekend .* Alarm to prevent tampering if appropriate cost benefit* Closed petty cash .5 . Independent internal verification includes an overview and comparison of the data to reconcile* Strength Does not work .* Weaknesses Unclear procedures requirements signatures , such as small cash transactions. Accountant is so busy that the company handles the checkout bit differently . All employees have access to the petty cash drawer and just put a note asking if they use any of the cash.* Recommendation1. Require an accountant to examine receipts and documents to verify costs to replenish funds.2 . force internal audits6. Office of Human Resources* Strength Employees seem to stay with the company for a long time and seems to be loyal .* Weakness The chairman is still quite embarrassed because he was forced to fire one of their employees for viewing pornography on a company computer. He afterwards learned that this man was a convicted felon who served time for molesting children. The Company had a hard time getting the employee to admit that this is it, because the company does not lot individual passwords. The President expressed his disappointment because he and an accountant and an audience and approve all new employees.* Recommendation1. Perform back ground checks and verify education credentials2 . Check references , but never used the figures provided a reference sheet3 . Employees bonds that deal cash4 . Assign unique passwords for employeesConclusionThere are limitations of internal control , but they must provide reasonable assurance that assets are protected and accounting are accurate. Currently, as a small company LJB can not have a very complicated system of internal control , but must recognize the reality of the law for trading companies with the public are held at a higher train of compliance . LJB Company does some things right , but there are several areas for improvement .Literature http//map.ais.ucla.edu/go/1002631Paul D. Kimmel , Jerry J. Weygandt, Donald Kieso 2010 Business & economic sciencehttp//www.macomb.edu/About+Macomb/College+Policies/Policies/Guidelines+for+Purchasing+Activities.htmhttps//www.cms.gov/R egulations-and-Guidance//fin106c07.pdfhttp//www.brockport.edu/intcontrol/questions.html