Control consists on verifying that the result of a certain activity is in accordance with the forecast made and it can fall on elements displayed by the information systems or by the autonomous data preparation (i.e. it analyzes the margins by product and prepares shunting line reports; it reviews the bank conciliations, etc.).
On the other hand, supervision represents the control of the controls, or, the activity developed by an outside entity who verifies that the control was executed (e.g. it reviews the margin analysis, and questions shunting lines above X and evaluates the reasonability of the explanations contained on the received report; it approves the bank conciliations, etc.), putting on its signature and taking responsibility.
There are several possible errors in an organization, in the most diverse areas, for which we will call for attention, and for which the implementation of control procedures to prevent risks from becoming effective is required.
Our vast experience, along with that of our international partners, identifies the following areas of risk in organizations and requires a large extent of attention.
A - At the level of purchases
- Non authorized purchases;
- Accounting of a purchase for which the products or services were not delivered;
- Incurred liabilities (any expense), not reflected in the accounting records;
- Incorrectly accounted purchase (at a price different from previously agreed or from reception);
- Purchase registered in an incorrect account;
- Purchase registered in a different period than that in which it was made;
- Total of purchases incorrectly conciliated (between autonomous and not integrated registers).
B - At the level of payments
- Non authorized payments;
- Registered but not effected payment;
- Effected but not registered payment;
- Amount paid but incorrectly registered (for a different value than authorized);
- Payment registered in a different period than when it occurred;
- Payment registered in a wrong account;
- Total of payments incorrectly conciliated (among autonomous and not integrated registers).
It is also necessary to be attentive to:
- * Significant devolutions of purchases;
- * Significant purchases in foreign currency;
- * Intercompany purchases;
- * Purchases of individual goods of significant value;
- * Estimation of royalties to be paid (or already paid);
C - At the level of sales
- Register of a sale without expedition of the good
- Register of a sale without expedition of the good
- Sale value incorrectly registered
- Products dispatched to a doubtful client (client with bad or risky credit)
- Incorrectly registered sales
- Sales registered in an incorrect period
- Sales incorrectly aggregated or reflected in the financial statements (interface error)
D - At the level of receivables
- Registered but not deposited collection
- Non registered or deposited collection
- Deposited but non registered collection
- Value of collection incorrectly registered
- Collection registered in the wrong client’s account
- Collection registered in the wrong period
- Collections incorrectly aggregated or reflected in the financial statements
It is also necessary to be attentive to:
- * Significant devolutions of sales
- * Relevant sales or collections in foreign currency
- * Sales of scrap iron and/or great volumes
- * Sales and receivable values from associated companies (of the group) or entities with interest in the company
- * Products of relevant value
- * Setting of credit
- * Acceptance of orders
- * Expedition of products and/or supply of services
- * Setting and negotiation of prices and contractual conditions
- * Adjustment/Correction of balances
E - At the level of stocks
RAW MATERIALS (RM):
- Registered transference of RM, but the product was not transferred
- Physically effectuated but not registered transference of RM
- Incorrectly registered transference of RM
- RM transference registered in the wrong period
- RM transference incorrectly aggregated (via interface or other method)
Finished Products (FP) and products and works in course (PWC)
- FP or astray or stolen merchandise
- Incorrectly registered transference of PWC
- PWC transference registered in an incorrect period
- PWC transference incorrectly aggregated (via interface or other method)
F - At the level of cost of sales
- Cost of sales was registered but the merchandise was not dispatched
- Dispatched products with non registered cost
- Incorrectly registered cost of sales
- Cost of sales registered in inadequate accounts
- Cost of sales registered in an incorrect period
- Cost of sales incorrectly aggregated (via interface or other method)
For each one of these possible types of error each organization must develop procedures which will minimize its existence so that the assets of the organization are not damaged.
We are available to help you to identify the causes of error and to implement one or several controls practiced in a world-wide level and that our specialists can recommend.– We Share Our Knowledge.