I write to kindly bring to your attention a problem identified with the current cash receipts internal control procedures. It has been identified that the cash receipts number is sometimes not accurate. Cash receipts are not intact every day as it should be because of balancing issues, which can be attributed to the poor and ineffective recording of cash receipts in the firm. As a result, the existing method does not offer the company the information needed to detect theft cases. The company’s cash receipts should be recorded immediately using the cash register and a pre-numbered receipt book to address this problem. The recorded information should include the amount of cash received, the name of the person who has given the cash, the purpose of payment, and the form in which the payment was done. The receipts provided should be two-part one of the copies is retained by the company for accounting purposes. Also, cash receipts should not be used for petty cash or when one has a short, among other individual reasons. By recording cash receipts as proposed above, theft cases can be traced and detected.
Thank you
(Name)
Sarbanes-Oxley Act and Foreign Corrupt Practices Act
The Sarbanes-Oxley Act is a United States federal law developed to protect investors by ensuring that companies’ disclosures are both accurate and reliable. The Act prevents corporate fraud (Congress, 2002). Through the Act, the Public Company Accounting Oversight Board was made to provide oversight in the accounting field. Company loans given to executives were canceled, and whistleblowers offered protection through the Act. The Sarbanes-Oxley Act holds chief executive officers accountable for errors that may arise in accounting reports. The board established standards that all audit reports should comply with. All auditors must register with the board, and inspections, investigations, and enforcement are conducted to ensure compliance (Congress, 2002). Also, the Act prevents accounting companies from conducting business consulting with the firms they audit. However, they can be consulted for tax-related matters. According to the Act, the lead audit partners should rotate after every five years.
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I think it was essential to implement the legislation to curb corporate fraud that was adversely affecting investors. The Sarbanes-Oxley Act has accomplished its major purpose, which is to prevent corporate fraud. After its implementation, financial crime and fraud related to accounting significantly reduced. Companies were barred from trying to overstate their figures. As a consequence of implementing the legislation, investors’ confidence increased because they can access reliable and accurate financial information essential in making investment decisions. In addition, employees who report fraud in their companies are protected under the legislation, which has further contributed to less corporate fraud. Firms cannot change their terms of employment or fire a whistleblower. The Act also protects contractors.
The Foreign Corrupt Practices Act is legislation in the U.S. that prevents companies and individuals from giving bribes to individuals in foreign countries to secure a business deal (SEC, 2019). The legislation has two major provisions, which are anti-bribery and internal control provisions. The internal control related provision addresses accounting practices. Different from the Sarbanes-Oxley Act, which addresses corporate fraud, the corrupt foreign practices address corruption and bribery at an international level. Before the legislation was implemented, foreign officials were, in most cases, paid to expedite legal procedures or secure contracts. In some situations, bribes were incorporated as part of business expenses. Although common, the conduct was unethical and illegal. The two legislations address different issues related to business practices.
References
Congress. (2002, July 30). H.R.3763 - 107th Congress (2001-2002): Sarbanes-Oxley Act of 2002 . Congress.gov | Library of Congress. https://www.congress.gov/bill/107th-congress/house-bill/3763
U.S. Securities and Exchange Commission (SEC). (2017, February 1). Spotlight on Foreign Corrupt Practices Act . SEC.gov. https://www.sec.gov/spotlight/foreign-corrupt-practices-act.shtml
