...Week-2 Case Study ACCT504 Acct Fin: Managerial Use Analysis Callistus Wong Professor Saad November 27, 2015 Situation A. In evaluating the internal control over inventory for the Williams Oil Services Company, an auditor learns that the warehouse receiving clerk is responsible for ordering parts for supply inventory use in drilling services, counts the inventory when received at the dock, records the receipts into the inventory ledger, and takes the annual inventory, No supervisor reviews the receiving clerk’s work. Missing Internal Control Characteristic: The important missing factor is that same person is responsible for conducting all the activities of inventory. He is responsible for ordering parts, counting the inventory, recording inventory ledger and taking up of annual stock. Problem of the Firm: The firm is not having any internal control mechanism to check the authenticity of documents and physical inventory of stores. Same person who might encourage any person to commit a willful fraud is performing all the duties. Proposed Solution: Segregation of duties is one of the methods of internal which helps in preventing and reducing the occurrence of frauds and errors. It is done by segregating the duties in a department and by ensuring that no single person is having control on all the transactions. Duties are divided into four general categories: Authorization Record keeping Custody Reconciliation. Different employees should perform all these major...
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...William Schall Case Study 2 Accounting 504 The five internal controls are: Smart Hiring Practices and Separation of Duties. In a business with good internal controls, no important duty is overlooked. Each person in the information chain is important. The chain should start with hiring. Background checks should be conducted on job applicants. Proper training and supervision, as well as paying competitive salaries, helps ensure that all employees are sufficiently competent for their jobs. Employee responsibilities should be clearly laid out in position descriptions. Comparisons and Compliance Monitoring. No person or department should be able to completely process a transaction from beginning to end without being cross-checked by another person or department. Adequate Records. Accounting records provide the details of business transactions. The general rule is that all major groups of transactions should be supported by either hard copy documents or electronic records. Limited Access. To complement segregation of duties, company policy should limit access to assets only to those persons or departments that have custodial responsibilities. Proper Approvals. No transaction should be processed without management’s general or specific approval. The bigger the transaction, the more specific approval it should have. For individual small transactions, management might delegate approval to a specific department. Situation a. In evaluating the internal control over cash payments...
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...An Examination of LBJ Distribution Company Internal Controls Infrastructure Pre IPO ACCT 504: Financial Accounting Keller Graduate School of Management Professor Ganesh Pandit Date: February 9, 2014 Pre IPO Examination of LBJ Distribution Company Internal Controls Infrastructure Prepared for: President, LBJ Distribution Company Prepared By: Véron S.A. Lake Company: LLMCO Date: 9 February 2014 Table of Contents Introduction 3 Purpose 4 Legal Requirement of Internal Controls 5 IPO Readiness: Financial Internal Controls 5 IPO Readiness: Recommendations 6 Reliable Monthly Reports 6 Adequate Staffing of Financial Departments 6 Implementation of Audit Infrastructure 6 IPO Readiness: LBJ Internal Control Strengths 7 Pre-numbered Invoices 7 Recommendations: Indelible Ink Machine 7 IPO Readiness: LBJ Internal Control Weaknesses 7 Staffing: Accounting Department 7 Staffing: Human Resource Department 8 Recommendations: Handling Petty Cash 8 Recommendations: IT Department Physical Controls 9 Conclusion 9 Works Cited 10 Introduction A company going public today is different than what it was in the dot com era; this is because the IPO landscape has changed significantly in the last decade (KPMG, 2013). Recently experts has seen compression in the markets, decreasing or shifting mergers and acquisition activity, faltering businesses and more scrutiny on balance sheets and company cash as well as access to capital (KPMG, 2013; Morgan...
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...An Examination of LBJ Distribution Company Internal Controls Infrastructure Pre IPO ACCT 504: Financial Accounting Keller Graduate School of Management Professor Ganesh Pandit Date: February 9, 2014 Pre IPO Examination of LBJ Distribution Company Internal Controls Infrastructure Prepared for: President, LBJ Distribution Company Prepared By: Véron S.A. Lake Company: LLMCO Date: 9 February 2014 Table of Contents Introduction 3 Purpose 4 Legal Requirement of Internal Controls 5 IPO Readiness: Financial Internal Controls 5 IPO Readiness: Recommendations 6 Reliable Monthly Reports 6 Adequate Staffing of Financial Departments 6 Implementation of Audit Infrastructure 6 IPO Readiness: LBJ Internal Control Strengths 7 Pre-numbered Invoices 7 Recommendations: Indelible Ink Machine 7 IPO Readiness: LBJ Internal Control Weaknesses 7 Staffing: Accounting Department 7 Staffing: Human Resource Department 8 Recommendations: Handling Petty Cash 8 Recommendations: IT Department Physical Controls 9 Conclusion 9 Works Cited 10 Introduction A company going public today is different than what it was in the dot com era; this is because the IPO landscape has changed significantly in the last decade (KPMG, 2013). Recently experts has seen compression in the markets, decreasing or shifting mergers and acquisition activity, faltering businesses and more scrutiny on balance sheets and company cash as well as access to capital (KPMG, 2013; Morgan...
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...Financial Analysis of Hershey and Tootsie Roll Keller University ACCT-504 Instructor: Financial Analysis of Hershey and Tootsie Roll Introduction Tootsie Roll and Hershey are two similar companies with a similar product offering, but they operate on entirely different scales. In an effort to determine the better investment of the two companies we will utilize multiple financial analysis ratios to gauge the health of the respective companies in terms of liquidity (the ability to pay short-term liabilities and respond to opportunities), solvency (the long-term viability of the company) and profitability (the efficiency at which the can turn it’s resources into profits). However, the snapshot picture of health that a single years worth of financial statements provide is not enough. Below we have offered a horizontal analysis of the respective companies to show the change in their health from 2012 to 2013 and analyzed the two companies against each other to show why we recommend Hershey as the better investment. Liquidity and Solvency Current Ratio The current ratio is defined as the current assets divided by the current liabilities for a given period. This ratio is important because it helps measure a company’s ability to pay their current liabilities with their current assets. This shows helps determine the liquidity of the companies and their ability to respond to market opportunities...
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...CASE STUDY 3—Cash Budget Template | | | | | | | | | | | | | | | | | | SCHEDULE OF EXPECTED CASH COLLECTIONS FROM CUSTOMERS May | June | 65,800 | | 26,850 | 62,650 | | 22,500 | 92,650 | 85,150 | | | | | | | May | June | 117,000 | | 54,000 | 81,000 | | 25,200 | 171,000 | 106,200 | | | | | | | | | | | May | June | $20,000 | $20,000 | | | 92,650 | 85,150 | 33,000 | | | 50,000 | 75,000 | 57,000 | 200,650 | 192,150 | 220,650 | 212,150 | | | 171,000 | 106,200 | 15,000 | 15,000 | 10,150 | 10,150 | 35,000 | | | 20,000 | 231,150 | 151,350 | (10,500) | 60,800 | | | | | 30,500 | | | (31,008) | $20,000 | 29,792 | | | To see all the figures look above | | | Credit Sales | | | May | June | (94000 x70%) | | 65,800 | | May(89500 x 30%), Jun (89500 x 70%) | | 26,850 | 62,650 | (75000 x 30%) | | | 22,500 | Total Cash Collections | | 92,650 | 85,150 | | | | | | | | | | | SCHEDULE FOR EXPECTED PAYMENTS FOR PURCHASE OF INVENTORY | | | Inventory purchases | | May | June | April(195000 x60%) | | 117,000 | | (135000 x 40%), Jun (135000 x 60%) | | 54,000 | 81,000 | (63000...
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...Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K x |ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934| For the Fiscal Year Ended June 30, 2011 OR ¨ |TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934| For the Transition Period From to Commission File Number 0-14278 MICROSOFT CORPORATION ||| WASHINGTON| |91-1144442| (STATE OF INCORPORATION)| |(I.R.S. ID)| ONE MICROSOFT WAY, REDMOND, WASHINGTON 98052-6399 (425) 882-8080 www.microsoft.com/investor Securities registered pursuant to Section 12(b) of the Act: COMMON STOCK, $0.00000625 par value per share NASDAQ Securities registered pursuant to Section 12(g) of the Act: NONE Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No ¨ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ¨ No x Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for...
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...Prepared for LJB Company President Evaluation of Internal Controls Prepared by XXXX XXXXX xxxx@msn.com ACCT 591 Acct Fin: Managerial Use,Anlys XXXXXXXXXXXXXX September 12, 20xx DeVry University Table of Contents Introduction of Evaluation 2 New Regulations – Public vs. Private 3 Current Internal Controls – Good 4 Current Internal Controls – Need Improvements 5 Reflection 7 References 8 Introduction of Evaluation My accounting firm was asked to evaluate the LJB Company for evidence of Internal Control issues. It is also my understanding that your company, LJB Company, wishes to move forward and become a public entity. I’m pleased my firm can be of assistance in helping your company make this transaction. First, we must review any new rules or regulations that apply to private companies converting public. Good corporate governance within an organization may make a company more attractive to potential buyers, investors, and other capital sources. Under Sarbanes-Oxley, all public traded companies must follow a set of new controls. U.S. corporations are required to maintain an adequate system of internal controls. Corporate executives and boards of directors must ensure these controls are reliable and effective. As with any business, the transformation of going from a private to public requires some extensive planning and preparation. It is recommended LJB being a relatively small sized company in terms of its employees should re-evaluate the...
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...Devry University LJB Company Internal Controls Eddie Daniel Velez ACCT 504 Professor Ramiro Serrano August 10, 2014 Table of Contents Introduction………………………………………………………………………………………..3 Public Trading……………………………………………………………………………………..4 Internal Controls…………………………………………………………………………………..5 Current Concerns………………………………………………………………………………….6 Summary…………………………………………………………………………………………..8 Works Cited……………………………………………………………………………………….9 Introduction: This report is used for the purpose of evaluating internal controls with the company stated: LJB Company Inc. LJB plans on going public in the near future and has enlisted the help of Serrano Accounting Services (SAS) to prepare a formal document discussing changes that need to be made in the company before going public is plausible. This report will discuss some of the current procedures at LJB with the proper recommendations to help streamline the process of becoming a public company along with any concerns the President might have and wishes to have addressed. Public Trading: LJB wishes to move forward and become a publicly traded company. First of all I want to thank for choosing SAS with all of your accounting needs. We are honored to help with this report and hopefully future endeavors. First we will review any regulations regarding private companies converting to public entities. One of the many added benefits of going public is it shows consumers, and investors a strong corporate governance. Under Sarbanes–Oxley...
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...Profile Microsoft As per MSN, “Microsoft Corporation is engaged in developing, licensing and supporting a range of software products and services. It also designs and sells hardware, and delivers online advertising to the customers. It has five segments: Windows & Windows Live Division (Windows Division), Server and Tools, Online Services Division (OSD), Microsoft Business Division (MBD), and Entertainment and Devices Division (EDD). Its products include operating systems for personal computers (PCs), servers, phones, and other intelligent devices; server applications for distributed computing environments; productivity applications; business solution applications; desktop and server management tools; software development tools; video games, and online advertising. Its cloud-based computing services include Bing and Windows Live Essentials suite. In October 2011, it acquired Skype Global S.a r.l. In November 2011, the Company acquired VideoSurf Inc.” Microsoft’s leading products are: 1) Windows Division 2) X-Box 3) Skype Leadership style and innovative track record. Microsoft’s leadership style was earlier guided by Bill Gates , founder of Microsoft. http://investing.money.msn.com/investments/company-report?symbol=US%3aMSFT Oracle’s profile As per yahoo.com, “Oracle Corporation, an enterprise software company, develops, manufactures, markets, distributes, and services database and middleware software, applications software, and hardware systems worldwide.”...
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...Financial Accounting 504 23-Jun-13 Professor Chung Oracle v Microsoft Final Course Project As noted in Wikipedia Oracle is headquartered in Redwood, California. It was founded in 1977 and is the world's third largest soft wear developer in sales. According to Yahoo Finance Oracle is a multi-faceted operation. Oracle provides a vast amount of services for the internet and computer. It provides cloud applications, IT consulting services, licenses middleware software which includes database and database management. It has 115,000 full time employees and is run by co-founder, CEO Larry Ellison who has been the only CEO of the company since it's inception. Also noted in Wikipedia he is the top paid CEO in the world. In 2013 Oracle currently has an operating cash flow of 13.72B with revenues of 37.15B which can be found in Yahoo Finance. Microsoft is a leading software company started by Bill Gates and Paul Allen in 1975. The company's headquarters is located in Redmond, Washington where like Oracle it develops, licenses, manufactures and support a wide range of computing sources, as documented in Wikipedia. Yahoo finance reports that in addition to licensing and manufacturing software over the globe it also designs hardware and has recently entered into the hardware industry with it's new tablet. It also has a entertainment division which is responsible for the manufacturing of Xbox360 gaming and consoles, Kinect for Xbox and video games among other products. It has a total...
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...LJB Company: Internal Control Evaluation Acct: 504 Case Study 2 Prepared by: Lennard Razor Prepared for: LJB Company 11/29/2014 LJB, 1 Table Of Contents Introduction: LJB Company Assessment 2 LJB Company: The Transition 3 Summary 5 Works Cited 6 LJB, 2 Introduction: LJB Company Assessment The overall purpose of this document is to assess the current state of the LJB Company. This assessment will thoroughly diagnose all of the components, both good and bad, used by LJB Company to help determine the company’s readiness to go public. Upon assessing all of the components and regulations currently utilized by LJB Company, I will also make recommendations for the improvement and future success of this company moving into the public market. In order to properly perform an assessment of the LBJ Company, there first had to be some set of standards or regulations that outline the internal controls and proper procedures for companies and businesses to adhere to for financial reporting. As it turns out internal control is a key component of Foreign Corrupt Practices Act(FCPA) of 1977 and the Sarbanes-Oxley Act(SOX) of 2002 which required companies to follow this set of internal controls. This list of internal controls is as follows: 1). Conduct its business in an orderly and efficient manner, 2). Safeguard its assets and resources, 3)...
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...8/4/13 Chapter 1 Results 36% (9 out of 25 correct) Responses to questions are indicated by the symbol. 1. Corporations generally receive more favorable tax treatment than sole proprietorships and corporations. A. True B. False Correct! Sole proprietorships and partnerships generally receive more favorable tax treatment than corporations. 2. Which is not one of the three forms of business organization? A. Sole proprietorship B. Creditorship C. Partnership D. Corporation This is one of three forms of business organization discussed in the chapter. 3. Which is an advantage of corporations relative to partnerships and sole proprietorships? A. Increased difficulty of raising funds B. Harder to transfer ownership C. Reduced legal liability for investors D. Most common form of organization Ownership is easier to transfer in a corporation than in a partnership or proprietorship. 4. Easy transfer of ownership is a characteristic of which form of business organization? A. Sole proprietorship B. Partnership C. Corporation higheredbcs.wiley.com/legacy/college/kimmel/1118162285/self_test/ch01.html?newwindow=true 1/8 8/4/13 Chapter 1 Results D. All of the answer choices are correct Partnerships are effectively dissolved when any portion of the partnership is sold, closed, boughtout by the other partners, or bought by a new partner or partners. 5. In which forms of business organization are the owners personally liable for all the debts of the...
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...Case Study 2 To the President of LJB Company, My colleague met with you to discuss the opportunity for your company to go public in the future and since your meeting, he has been promoted and the Internal Control review of your company has now been assigned to me. I would like to inform you about the current Internal Controls, how your company is performing, my recommendation on buying an Indelible Ink Machine, and Internal Control changes that I recommend you make. There are 5 main areas of control that LJB Company needs to address in order to stay in good standings with internal controls. The first internal control is the Establishment of Responsibility; “Control is most effective when only one person is responsible for a given task.”(Kimmel 339) A company should limit one employee to each area to limit the chance of illegal activities. Segregation of duties ties into establishing responsibility by assigning related activities to different employees. Documentation procedures deal with making sure that all transactions and events are documented and monitored. Physical, mechanical, and electronic controls are based on keeping safes, computers and time clocks monitored and restricted. Independent internal verification is used to audit employees and data reconciliation. The last category is called other. This deals with bonding employees who handle cash, and rotating employee duties. Based on the information you gave my colleague and my review of your company, I do not...
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...College of Business & Management ACCT504 Student Success Guide 1 Table of Contents Why a success guide? ................................................................................................................................. 3 What makes accounting challenging? ........................................................................................................ 3 How should I approach the course? ........................................................................................................... 3 Threaded Discussions.............................................................................................................................. 4 Homework Assignments ......................................................................................................................... 4 Course Project ......................................................................................................................................... 5 Midterm Exam ........................................................................................................................................ 5 Final Exam ............................................................................................................................................... 5 What resources are available? ...........................................................................................................
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