If
you are sure that your company has adequate
Internal Controls, Stop reading here
. . .
But let's face it, no one is perfect.
Internal Control is now an issue that
no enterprise can afford to ignore and its importance is likely
to grow as business methods become more complex and traditional
standards of probity continue to be challenged.
To be able to meet this and especially in the ever changing,
highly competitive market around, Financial Group designed The
Internal Control Program especially tailored according to each
companies special needs.
Internal Control or an Internal Control System is the
integration of the activities, plans, attitudes, policies, and
efforts of the people of an organization working together to
provide reasonable assurance that the organization will achieve
its objectives and mission.
This definition establishes that:
• Internal Control impacts every aspect of an organization:
all of its people, processes and physical structures;
• Internal Control is a basic element that permeates
an organization – not a feature that is added on;
• Internal control incorporates the qualities of good
management;
• Internal Control is dependent upon people and will
succeed or fail depending on the attention people give to it;
• Internal Control is effective when all of the people
and the surrounding environment work together ;
• Internal Control provides a level of comfort to an
organization; controls do not guarantee success;
• Internal Control helps an organization achieve its
objectives and mission.
Internal Control influences people’s actions. Internal
Control recognizes that the people do not understand, communicate
or perform equally. Each individual brings to workplace a unique
background and technical ability and has different personal
needs and priorities. These realities affect, and are affected
by, internal control. People must KNOW THEIR responsibilities
and limits of authority. Accordingly, a clear and close linkage
needs to exist between people’s responsibilities and the
way which they are carried out and the entity’s objectives.
The Internal Control Program provides employers, managers and
employees with a systematic approach to implementation of policies,
plans and work routines. A properly developed Internal Control
Program can achieve the following benefits for your organization:
1. Conveys Management's
Philosophies
The Program should be used to communicate both corporate policies
and the appropriate procedures for implementation of the policy
in a combined style format. Policies should not be confused
with procedures as defined below:
Policy - A definite course or method of action
to guide and determine present and future decisions. A guide
to decision making under a given set of circumstances within
the framework of corporate objectives, goals and management
philosophies.
Procedure - A particular way of accomplishing
something, an established way of doing things, a series of steps
followed in a definite regular order ensuring the consistent
and repetitive approach to actions.
2. Improves Communications
The program serves to translate the company's business philosophies
and desires into action. A well-designed Internal Control Program
is an invaluable communication tool for efficiently running
operations within departments and bridging the gap between interrelated
departments.
3. Reduces Training Time
Your Internal Control Program will be a functional guide for
training new and existing employees and should prevent difficulties
in performing duties due to lack of understanding or inconsistent
approaches from personnel changes.
4. Improves Productivity
The Internal Control Program speeds up decision making by employees
by having a handy, authoritative source for answering questions.
Well developed and documented manuals can ensure compliance
with regulatory agencies affecting your business.
5. Strengthens Operations
A comprehensive Internal Control Program covering all departments
within your organization can become a "quality" manual
for the whole company. This will help ensure optimum operations
and consistent delivery of the finest in product or service
from your company.
Everyone in your organization should have an Internal Control
manual available for their access. Due to the cost of producing
and maintaining the manual, it is not necessary to issue a manual
to every employee but one should be available from their supervisor
or in a designated area in each functional location.
