Company’s in the IPO process and newly public companies are not required to provide either a management assessment or an auditor attestation report until they file their second annual report with the SEC. While companies in the IPO process are not required to comply with these regulations, in order to prepare for these certifications and audit, it is important to establish, document, and monitor compliance of internal controls as early as possible. 2. One practice the LJB is doing right and should continue to do is the use of pre-numbered invoices. This prevents transactions from being skipped over or recorded more than once.
If this is the case, then it is to be disclosed on the financials as required by FASB ASC 850 -10-50; Related party Disclosures – Overall - Disclosure, Statement of Financial Accounting Standards No. 57, 1982. If this is not a related-party transaction, it is not necessary to
3. Documentation: It is vital that all transactions have proper documentations. Your company’s current use of pre-numbered invoices is an appropriate measure for this internal control. Additionally, the purchase of an indelible ink machine for printing checks would provide another layer of protection. The use of such a machine would alleviate the risk of employees altering checks for personal gain.
The categorization of every lease will not depend on whether a company, bank or person to have legal ownership of the asset, it would depend only if the third party considerably has all the risk and rewards of the ownership. Operating lease payments are made on a straight line basis. Changes in the lease classification will change the will affect the debt equity. When determining whether a lease is operating or a finance lease there need to be increased judgment because there are no strict classification requirements. Lessees are obligated to recognized assets and liabilities for all leases which would eliminate the operating lease accounting.
The use of pre-numbered invoices should be continued. This practice supports the principle control activity falling under “Documentation procedures” and is a good method to ensure that all invoices are being correctly tracked and documented and that extra invoices are not being generated for fraud purposes (3). c. The purchase of an indelible ink machine to imprint check amounts is highly recommended as a further documentation control activity procedure. The use of such a machine will ensure that check amounts are correctly and clearly shown on each check and in such fashion that it would be extremely difficult to re-write or forge an amount versus the continued use of hand-written checks which carry a greater error rate and greater opportunity for fraud (4). d. Monthly bank reconciliation: This is a good practice to
With the knowledge that we are liable to pay a fine, we will find a way to allocate resources that will keep our employees from having to shoulder the brunt of the financial backlash. By this, I mean that we will not recoup the lost funds through reducing employee’s pay or benefits. I will recommend that the resources be taken from retained earnings, to avoid negatively impacting the current year’s budgets. The CFO will be directly accountable to insure that the finable issues are immediately resolved, to avoid any compounding of fines.
This is because there is more security with such a system thanks to photo and online verifications. Another benefit is that it gives up to date information on patients and medication history. It totally cuts out accidental deaths or illnesses due to mistakes in crossover reactions. Thirdly, it hugely improves the quality of care a patient will receive thanks to being able to quickly and accurately identify a patient. 2.
By entering Chapter 11 bankruptcy, Delphi was able to make use of the automatic stay provision. This protected them from their debt collectors while they created a plan of reorganization (POR). If the POR was accepted by all holders of financial claims; debt holders, employees, and shareholders, the company would be able to exit bankruptcy and execute its reorganization. In addition, Delphi now had access to Debtor in Possession financing (DIP). While they did incur further costs while in bankruptcy protection, these costs need to be weighed against the accumulation of further debt and the risk that they would not be able to recover from this financial crisis.
Instead a mission statement should inspire understanding of what the company intends to achieve and how it is going to go about achieving it on both sides of the counter (Dust, 1996). Additional essential characteristic of a mission statement is its durability. It is wise for a business to invest time into writing a document that may undergo many re-writes and changes and to ensure that the final version is enduring and doesn’t change very often. Stability of the mission statement will allow employee and customer trust in the values enclosed within to thrive. Because of its purpose to provide focus and consistency a mission statement should never be verbal.
Others argued that audit committees with independent chairs contribute to more effective control systems as long as the management is not involved the selection of the directors (Carello etal.,2011). Abiding with the composition and structure requirements of an audit committee grantees performing its "oversight responsibilities" (Ferreira 2008). This necessarily requires total independence from the executive board members. The appointment of inside directors in an audit committee leads to a lower level of independence in an audit committee (Sharma etal.,2009). To enhance high-quality corporate governance and ensure transparent business environments, several regulatory codes have established on corporate governance.