Internal control and investment control consulting
WHAT IS INTERNAL CONTROL SYSTEM?
The Internal Control System is system of methods, processes and policies designed to prevent fraud, minimize errors, encourage effective operation, and achieve compliance with policies and processes.
BENEFITS OF STRONG INTERNAL CONTROL SYSTEM
A strong internal control system will help bring the following benefits to the company:
- Ensure the accuracy of accounting data and financial statements of the company
- Reduce the risks and frauds or theft for company caused by the third party or company’s employees;
- Reduce the unintentional risks and errors of employees that could harm the company
- Reduce the risks from not complying with policies and business processes of company
- Prevent the contact with unnecessary risks from ineffective risk management.
Normally, when the company develops, the benefits of an internal control system will also become bigger because the company owner will be more difficult to supervise and control these risks if only based on their own direct supervision experiences.
For companies that have a big separation between managers and shareholders, a strong internal control system will contribute to get the high trust of shareholders. On this subject, a strong internal control system is one of factors of a strong business administration system, and this is very important for companies which have the outside investors. Investors will often pay higher prices for companies with lower risks.
IMPORTANT FACTORS TO IMPLEMENT SUCCESSFULLY THE INTERNAL CONTROL METHODS
Successful implementation of internal control methods requires some general rules:
- A cultural environment affects integrity, moral values and clear responsibilities;
- Operating procedures and internal control procedures are clearly determine in writing and widely communicated in the company;
- Risk activities are clearly separated among different employees;
- All transactions must be implemented under reasonable authorization;
- Every employees must comply with the internal control system;
- Responsibilities in control and supervision are clearly separated;
- Implement periodically independent control methods;
- All important transactions must be recorded in writing;
- Examine and improve the effectiveness of internal control methods periodically.
HOW SHOULD SMALL AND MEDIUM ENTERPRISES BUILD THE INTERNAL CONTROL SYSTEM?
Currently, the concept of building an internal control system for Startups as well as SMEs is quite strange. They have been still focusing on seeking the output for their products, mobilizing capital, paying salary for employees… For business owners, they consider that building internal control system is not necessary.
However, as above shares, building a strong internal control system is one of the business advantages of any business that wants to stand sustainably on the market.
Recognizing this situation, EDUBELIFE has been currently implementing services related to this field as follows:
A / For Enterprises, Startups:
- Training on financial administration skills, tax risks and insurance for CEOs
- Consultation on building the internal control regulations and procedures such as: building regulations on production and business operation, working regulations, regulations on the functions and tasks of departments, building financial regulations, salary and reward regulations…
- Control financial risks through examinations periodically and regularly.
- Direct support for financial administration, control operations for the Board of Directors, Chief Financial Officer, Chief Accountant of enterprises in daily management.
- Participate in analyzing, evaluating regularly and periodically on the effectiveness of the internal control system
B / INVESTMENT CONTROL
For investors, participate as Chief Financial Officer (CFO) or participate as Supervisors of financial administration operations as required by Vietnamese and foreign investors.
Write periodically financial administration reports as required by investors.
Analyzing, evaluating and giving advices on the effectiveness of investment portfolio of the investors who are sponsoring for enterprises.