Financial accounting and Managerial use Essay Example for Free

Financial bill and Managerial use EssayBackground LJB Company , a small business topical anaesthetic distri simplyor who understands to go public in the future, the company should be in accordance with the law and may need to take more stringent sexual control principles. At the request of the president, an independent internal evaluation of internal controls was conducted to evaluate the direction of strength and weakness.Objective The objectives of this report should evaluate the existing controls and own recommendations that will ensure the companies assets and help stand the most accurate financial information. Based on a system of internal checks and balances will be besides in my recommendations to the president of the company, since most of the internal control systems provide for independent internal control This principle involves the review of data prep ared by employees. To get the maximum acquire from an independent internal control Control values and Integrit y from the top grow it clear that it is unethical activities will not be accepted, and set the tone for the companys culture .There are several principles of management 1. Establishment of responsibility management is most effective when a single fountain may be responsible for the problem, including the authorization and approval of transactions.Weakness LJB has only one accountant who serves as treasurer and controller , which can optimize the processes , just it creates an inherent risk . Cashier handled informally . Accountant is so busy that the company handles the checkout bit differently . All employees have access to the little change drawer and just put a note asking if they use any of the cash.Recommendation* Align the specific obligations of employees to limit access to legitimate employees so that the buyer is not the same person who authorizes the payment without the approval of the head at least . Otherwise , a person may make payments that are made to yourself.* Use unique passwords per employee to protect the purchasing system to provide adequate inventorys and records management.* deputize picayune cash custodian.2 . Segregation of duties afterward one employee should , without duplication of effort , provide a sound basis for evaluating the work of another employee. 2* Strength Accountant receives the checks and completes the monthly bank reconciliation. This crusade , as the bank and the company maintain independent records , which may not always agree on what may be a simple geological fault of either party. To maintain maximum benefits , a worker 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 minute of arc is a dual role . Petty cash handled all .* Recommendation1. Divide the purchase task to avoid the temptation of possible abuse. go alongerof the petty cash fund makes payments , but the reviews accounta nt to recharge .2 . Require the authorization of the buyer and payment of employees on vacation at different measure of the year.3 . Documentation and procedures to provide evidence that the transactions and events occurred* Strength Accountant recently started using pre- numbered invoices.* Weaknesses Unclear procedures for shipping requirements , invoices and time signatures 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 bring up the person responsible for the activity .* If possible , the user pre- numbered documents . It also 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 accoun ting.* 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 limited access willbe my first suggestion to cut spending immediately , with no additional be. 4 . somatic control can be mechanical and electronic asset protection .* Strength Before leaving for the weekend accountant , accountant will impinge on checks in a safe in his office .* Weakness For salaries , checks selected accountant and left in his office for pick-up . Cashier box is not locked.* Recommendation* closed 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 Doe s 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 see to it costs to replenish funds.2 . Surprise internal audits6. Office of Human Resources* Strength Employees seem to stay with the company for a long time and seems to be incorruptible .* Weakness The President is still quite embarrassed because he was forced to fire one of their employees for viewing pornography on a company computer. He later 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 asseverate individual passwords. The President expressed his disappointment because he and an accountant and an interview 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 level 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 Economicshttp//www.macomb.edu/About+Macomb/College+Policies/Policies/Guidelines+for+Purchasing+Activities.htmhttps//www.cms.gov/Regulations-and -Guidance//fin106c07.pdfhttp//www.brockport.edu/intcontrol/questions.html