Nobody is in control of everything, but we still need to try. This is true, especially in the case of businesses. In the business environment, there are two different factors that play a very important role. These are:
- Intrinsic Factors
- Extrinsic Factors
These factors are explained below:
Intrinsic factors are the factors that can be controlled by business and management. Such factors include workload, costs, growth and expansion, Research and Development, etc. These come within the purview of the business, and the management can review these according to the needs and wants of the business.
Extrinsic Factors are the factors that cannot be influenced or controlled by a business. This includes factors such as trends, climate, demographics, politics, taste, and preferences of the people, etc. these factors are very important, and a business needs to constantly keep track of these factors.
All in all, it is significant to have the maximum control of a business so that the certain aspects of the business can be manipulated at will. One of the ways to gain control or to know more about the financial aspect of your company is to conduct a Financial Control Audit.
What is a Financial Control Audit?
A financial control audit is a process wherein the control of the management over the finances of the company is taken into account. During a financial Control Audit, the concerned auditor has to take care and review how all the transactions of the company are handled and reported, what is the bookkeeping process and how are all the transactions entered into the system
For a Financial Control Audit, an internal auditor is preferred to an external auditor as the internal auditors will be better able to understand the sentiments flowing in the company.
How can the Financial Control Audit Benefit the Business?
Conducting a Financial Control Audit can benefit the company in many ways. Some of the ways are mentioned below:
- An audit will reduce the risk of any fraud or any other unwanted activity.
- Collecting data for the audit will help the management to prepare a future plan for the company and will also be a deciding factor in preparing a risk-mitigating strategy.
- All the financial data of the company will be collected, which will help to prepare strategies on a monthly and quarterly basis (as per the requirements of the company).
- By knowing and understand the present state of the resources will assist the companies in maintaining the required amount of raw materials winds. The management will also be able to combat against mismanagement and any other regularities.
Conducting a Financial Control Audit will help in the identification of any potential problem and the ways to resolve the said problem. This audit will also help improve the financial condition of the company and will also help prepare for the upcoming risk.
What are the things covered in a Financial Control Audit?
Major issues which are addressed by a Financial Control Audi are as follows:
- Ensure and maintain that the appropriate accounting and auditing standard is being followed.
- To keep a check on the various decisions of the management, which involves costing
- To keep track of all the financial transactions of the company and checking their accuracy.
- To see if the relevant policies are in place
- To check if all the transactions of the company are meeting the required standards, including a Break-Even Point (BEP) Analysis.
Apart from the Five (5) points mentioned, there are many other factors that are covered under a Financial Control Audit. in conclusion, we can say that a Financial Control Audit can act as a very effective tool that can help to understand the financial situation of the company.
A complete Audit of the company will help in determining various important factors which can then be used up in the growth and expansion of the company. if you are looking for auditing services in the United Arab Emirates, then you should have a look at the services offered by JAXA Chartered Accountants.
For any more details on the services provided, feel free to Contact Us. We will be happy to assist you.