Company Internal Control
| LJB Company Internal Control Report Review | October 2, 2011 | [Type the document subtitle] |
The management of LJB Company is responsible for establishing and maintaining adequate internal control over financial reporting. This internal control system is designed to provide reasonable assurance to the company’s management and board of directors regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations.
LJB Company management assessed the effectiveness of the company’s internal control over financial reporting as of 2011. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on our assessment, we believe that, as of 2011, the company’s internal control over financial reporting is effective based on those criteria.
I. New internal control requirements if the company decides to go public
Public companies are required by regulations Sarbanes-Oxley Act of 2002 (SOX) among them to formalize control procedures in writing. Privately held companies and other organizations also have an interest in the benefits that result from formalizing and documenting their internal control procedures. Companies must develop sound principles of control over financial reporting and continually assess that the controls are working.
The new rules require management to disclose to the public any material weakness identified by management. The report must also state that the company’s independent public accountant who audited the financial statements included in the annual report has attested to and reported on management’s evaluation of internal control over financial reporting.
This new attestation requirement under Section 404 expands the scope of the accounting firm’s audit procedures beyond the work required solely to render an
The management of LJB Company is responsible for establishing and maintaining adequate internal control over financial reporting. This internal control system is designed to provide reasonable assurance to the company’s management and board of directors regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations.
LJB Company management assessed the effectiveness of the company’s internal control over financial reporting as of 2011. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on our assessment, we believe that, as of 2011, the company’s internal control over financial reporting is effective based on those criteria.
I. New internal control requirements if the company decides to go public
Public companies are required by regulations Sarbanes-Oxley Act of 2002 (SOX) among them to formalize control procedures in writing. Privately held companies and other organizations also have an interest in the benefits that result from formalizing and documenting their internal control procedures. Companies must develop sound principles of control over financial reporting and continually assess that the controls are working.
The new rules require management to disclose to the public any material weakness identified by management. The report must also state that the company’s independent public accountant who audited the financial statements included in the annual report has attested to and reported on management’s evaluation of internal control over financial reporting.
This new attestation requirement under Section 404 expands the scope of the accounting firm’s audit procedures beyond the work required solely to render an
Cited: Bianco, D. (2011). Reference for business encyclopedia of business. Retrieved from http://www.referenceforbusiness.com/encyclopedia/Con-Cos/Controller.html Bushman, M. (2007, April 6). The five components of internal control. Retrieved from http://www.associatedcontent.com/article/196418/the_five_components_of_internal_control_pg2.html?cat=3 Kimmel, P., Weygandt, J., & Kieso, D. (2009). Financial accounting. (5 ed., pp. 326-336). Hoboken: Wiley & Sons.