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Jo Monahan, CPA
Planning & Control Services
Two crucial aspects of managing a business are planning for the business’s future and installing sufficient controls to protect both the present and future of the business.
It is important in every business to take the time to see how the business is doing and to think and plan where the business should go. That is why management should periodically prepare a Business Plan.
Whether the Business Plan is for internal use only or will be used to try to secure financing, the exercise of preparing the plan will greatly assist management by looking at where the business has been, where it is going, identify the company’s strengths and weaknesses, prioritize goals and create a roadmap for the future.
As it is important to plan a company’s future, it is even more important to place sufficient internal controls in place to help ensure the company’s present and future. Appropriate internal controls can assist in establishing that a business is being run efficiently, within appropriate regulations, has dependable financial records and that the assets are safeguarded.
While there are standard practices when defining internal controls (such as the segregation of duties) the controls in place from company to company will vary. This is for a variety of reasons including type and size of business. Generally there are five aspects of internal control – the environment, risk identification, controls, information distribution and monitoring. If one or two of those aspects are very strong, they could potentially compensate sufficiently for a weaker control.
In order to ensure the appropriate controls are in place for your business, they should be examined by a professional. The Examination of Internal Controls is included in our Audit service or is available as a separate service.
As a company grows and changes the internal controls in place should be reviewed to ensure they are still sufficient to meet the company’s requirements.
For example if new regulatory requirements are passed, if employee turnover is high, if new computer systems are being utilized, or if a new service or product is being offered, policies and procedures may need to be updated.
Control policies include: