Ljb Company Current System

LJB Company is a local distributor looking to go public. The president has asked for an evaluation of the company’s internal controls. He has also asked for information in regards to new internal control regulations the company will incur if it goes public. This report will describe LJB’s current situation and provide guidance on internal control regulations for public companies. It will also discuss what the company is doing right while highlighting what the company can improve on and provide suggestions on how it can better its internal controls.

Current System

LJB Company is a lean organization employing one accountant that has a dual role as both Treasurer and Controller. The responsibilities of these roles involve purchase and payment of all supplies, receiving of checks and completion of bank reconciliations. With a lot of faith in their employees the company allows each worker to handle petty cash with a note being recorded only when cash is used. The Treasurer/Controller has recently started to use pre-numbered invoices and is interested in buying an indelible ink machine to print their checks. On payday, the accountant picks up the checks and they are left in his office for pick up. For the weekend those checks are stored in his office safe.

The company has also had issues with computer policy as they had to fire an employee for viewing pornography. They experienced challenges in identifying the employee because the company does not assign individual passwords when logging into their computers. As part of their hiring process, the president and the accountant interview and approve all new hires.