| 2013 |
| FGI Consulting
[LJB Company] |
This document is prepared for the President of LJB Company. Recommendations for IPO planning and Internal Control review to meet current status and carried over when the company is a publicly traded company. Controlled document 1A3872013 |
In this document recommendations are presented for consideration for the current and future internal controls of the company and for the planning of its IPO.
It is important to understand that good governance demonstrated is a requirement under the Sarbanes-Oxley Act of 2002 for publicly traded companies through maintaining an adequate system of internal controls. The executives and Board of ...view middle of the document...
These days, companies going public should expect to pay more and can reach upwards of $2 million in out of pocket expenses in some cases to cover a host of fees – among them legal, printing, listing, filing -- in addition to the underwriter discount and commission of the offering proceeds and to shore up internal processes to meet the tougher reporting and governance standards for public companies. (Inc.com, Elizabeth Wasserman, 2010).
Since the company has several features in place, improving them and becoming Sox Act compliant will help greatly in initial costs while developing a robust internal control system that is sustainable. If the company intends to print its own pay checks and company checks for accounts payable and vendor services, the indelible ink printer will be a great security application of internal control of producing checks in house. This operation will have to be limited in access to the accounting department along with the disbursement activities such as pay checks. Segregation of duties will have to be well established and documented so as to insure accountability by the parties assigned as the current accountant and/or accounting staff by name.
Although some internal controls are in place now, the above noted sections of the Sox Act particularly apply here and will insure compliance with the laws and regulations, while protect the company’s assets and increasing efficiency of operations, which investors and lenders look for.
As the company is using Pre-numbered invoices, which gives great capability and tractability in control, should be extended to numbered...