Every successful business requires that its income, cash and assets are protected, and directors are charged with this responsibility. Such protection is provided by a sound system of internal controls, which are fully understood by directors and employees, and are adequately documented, implemented and supervised.
Smaller companies often have the challenge of implementing watertight internal controls due to a lack of support and administrative staff. The savings effected by this situation can be costly in the long run, and we can advise on which areas are critical for effective control.
For example, can the directors be confident that at all times:
- cash and other liquid assets are protected?
- all proceeds from company revenue is deposited in the company’s bank account?
- all payments and transfers including EFT’s are supported by valid documentation and are paid into the purported account?
- inventory sold is recorded as income and inventory purchased arrives at the company premises?
- all employees on the payroll actually perform the services for which they are being paid?
Our assistance includes:
- the design and implementation of a formal business process plan and internal controls;
- review and upgrading of existing business processes and internal controls.
We do this by:
- assessing your internal control systems to determine the efficiency and effectiveness of your operating procedures.
- making recommendations that help your company become stronger and more profitable by correcting any inefficient or ineffective operating procedures we find.
- implementing segregation of duties among different people to reduce the risk of error or inappropriate actions. No one person should have control over both the recording and custody of assets.
- ensuring that transactions are authorised by a person delegated the authority to approve when the transactions are consistent with policy and funds are available.
- ensuring that records are routinely reviewed and reconciled, by someone other than the preparer or recorder.
- making certain that equipment, inventories, cash and other property are secured physically, counted periodically, and compared with item descriptions reflected in company records.
- providing employees with appropriate training and guidance to ensure they have the knowledge necessary to carry out their job duties, are provided with an appropriate level of direction and supervision, and are aware of the proper channels for reporting suspect transactions or breakdowns in controls.
- documenting policies and procedures and making them accessible to employees, to provide day-to-day guidance, as well as continuation of duties in the event of employee absences or turnover.
- reviewing operations to ascertain whether results are consistent with established objectives and goals and whether the operations are being carried out as planned.