Human Resource control Essay

I want to first start off by saying give thanks you for the opportunity to handle such an important and mad matter such as the indispensable swan for the LJB Company. First and foremost I want you to be aware of the requirements of your smart set if you do decide to go public. The Sarbanes-Oxley recreate of 2002 (SOX) which was passed by congress requires all publicly traded U.S corporations to maintain an adequate arranging of internal control. Corporate executives and boards of directors like yourself must ensure that these controls are current and effective. In addition, independent outside auditors must attest to the adequacy of the internal control system.Companies that fail to comply are subject to fines, and company officers drop be imprisoned. LJB Company is currently doing some things well that I raise they continue. The use of pre- biteed invoices allows for missing or undocumented invoices to be caught quickly. This practice is considered a sustenance procedur e under internal controls. Having two managers approve crude hires helps ensure a good fit. Its good that the accountant completes banking company reconciliation. While using a bank is a form of control for cash, the reconciliation enables LJB to make sure there are no errors mingled with what the bank and what they shit on the books.There are a number of practices by LJB that dont deter fraud and would need to be changed before considering going public. Segregation of duties The duties for handling assets need to be obscure amongst multiple employees. Employees that handle cash should not be involved in the bank reconciliation or invoices. Employees responsible for buy should not contain any payment or reconciliation duties. By segregating duties, there is to a greater extent than one somebody involved in the sales and purchasing rhythm method of birth control so that one person cannot be behind a dupery transaction or remove cash or purchased assets without it being detec t by another. Access to assets All employees should not have access to tiny larceny cash. The cash should be locked and those with a key should ensure proper documentation for cash distributed to be sure it is authorized.The person responsible for reconciling the petty cash should do so randomly to deter its abuse. As far-off the indelible ink machine I see no chore printing your own lay offs as long as you use pre-numbered check stock paper to write the checks. Otherwise you pass on not make out that you have accounted for every check written. Also, this is an area of responsibility that should be segregated. The person responsible for printing the checks should not have the authority to sign them. This ordain help insure they are not writing checks to themselves. LJB should consider purchasing the indelible ink printer at once they have the manpower to have the duties segregated. By using indelible ink, the checks printed will be harder to change once printed, which is a good physical control of cash.Paycheck Lock-Up Although the accountant is fix the employees paychecks over the weekend, he should actually be locking them at all times. Anytime the accountant steps away from their desk and these checks are not locked, sensitive employee information is vulnerable. Background checks I recommend that LJB implement the Human option control of conducting background checks of all employees before officially hiring.This way they will discover if the potential employee has a past that could negatively impact the company (fraud, theft, other criminal activity) Passwords Passwords are a key control preventing employees from accessing data outside of their duties and changing transaction data from initial amounts to cover up errors, fraud or theft. Everyone should have an individual password and not erupt it to another. Changing passwords periodically is a best practice. I hope that LJB finds this composing helpful and that it prepares them for potentiall y going public.