Assessment of Risks and Improvement of Internal Control Systems

When doing business, the task of the company’s executive is to use every opportunity to promote and develop the company, taking into account the threats, which may seem insignificant and can negatively influence future of the company. Meanwhile it is necessary to be confident, that all company’s assets are protected, that there is no opportunity of their unauthorized sale or usage, that all transactions are made with the company’s executives’ approval, and they are correctly displayed in the financial statements and accounting records, so that the executives or owners of the company can receive adequate information about the situation. For a number of reasons the company’s executives cannot always see some negative sides of the business, which can worsen company’s performance. Due to increase in the size of the enterprise, the executives find it difficult to deal with all aspects of activities at the same time, they can overlook potential fraud and mistakes.

In order to solve this problem, EBS offers service relating to assessment of risks and introduction of an internal control system in the framework of which the owners and executives of the company will receive an unbiased independent assessment of the internal control system condition, main risks and reaction to their occurrence or systematization. Internal control is a mechanism by means of which the owners, board of directors, executives of the company can be sure to some degree that the company will achieve the set purposes in the most appropriate way. The purpose of the internal control is to timely detect and analyze risks, check reliability of financial and management information, integrity and safety of assets, compliance with the legislation and internal policies and procedures, implementation of financial and economic plans, efficient usage of the resources. Financial control, including control of completeness and reliability of the accounting records and financial statements, is an important element of the internal control.

Analysis of the internal control system is carried out through understanding of organization and implementation of the main business processes, accounting, organizational structure and management system, internal control, financial accounting and document flow. Detection of risks, assessment of their importance and influence on the company is performed by means of analysis of the control methods used by the company as of the moment of assessment and analysis of risks mitigation by means of the used methods. EBS prepares a detailed report for the company’s management and develops recommendations on creation and optimization of the internal control system. We use the following methods: questionnaires for the personnel, examination of the situation and documents.

KEY STAGES

  • Determination and detailed examination of key business processes in order to detect risks
  • Detection of internal and external risks of the company and their sources
  • Detection of risks connected with management information
  • Assessment of risk likelihood and importance
  • Assessment of management and control of the main business processes of the company
  • Determination of the organization efficiency level and functioning of the internal control system
  • Development of tailor-made offers and recommendations on mitigation of each existing risk
  • Provision of services relating to recommendations’ introduction

BENEFITS

  • Improvement of management methods and preservation of assets by elimination of the malpractice.
  • Increase in resources usage efficiency (time, money and people, commodities and materials)
  • Integrity and safety of the information system, adequacy of the management reports system enabling to take informed and correct strategic decisions.
  • Conditions for preparation of the reliable financial activities of the company for its executives

Assessment and analysis of project risks requires concentration and capacity to forecast not only certain threats in the process of operation but their possible consequences. It is also necessary to think about possible solutions of the problem. If you are not sure that you can carry out such work, contact EBS.

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