Financial Guide for SMEs - SME Corporation Malaysia

Financial Guide for SMEsFinancial ControlsFinancial control is a procedure implementedto detect or prevent errors, theft or fraud,or policy non-compliance in a fi nancialtransaction process.Financial control procedures can beimplemented by either an individual or aspart of an automated process within afi nancial system.Financial controlsare policies andprocedures usedin your business toprotect your assetsand to support goodfi nancial reportingEach fi nancial control procedure is designedto fulfi l at least one of the following eightcriteria:CompletenessAccuracyAuthorisationValidityCriteriaExistenceHandling errorsSegregation ofdutiesPresentation anddisclosureDescriptionsAll records and transactions are included in thereports of the business.The right amounts are recorded in the correctaccounts.Approved authorisation levels are in place to coversuch things as approval, payments, data entry andcomputer access.The invoice is for work performed or productsreceived and the business has incurred the liabilityproperly.All assets and liabilities recorded in the booksactually exist. Has a purchase been recorded forgoods or services that have not yet been received?Is there correct documentation to support the item?Procedures ensure that errors in the system havebeen identifi ed and corrected.Certain functions are separated. For example, theperson taking cash receipts does not also do thebanking.There is timely preparation of reports forcompliance or review.159chapter 7-13 p79-181 Eng.indd 1598/15/11 5:03:09 PM