"We do not lack courage to undertake certain things because they are difficult, but they are difficult because we lack courage to undertake them." Seneca.
The business world changes at an accelerated speed, managers must make decisions in a difficult environment where apparent contradictions are faced, dizzying changes have occurred in fields such as technology and electronics, global sales are increasing, Globalization is increasing, and it is within this world that our country must develop and grow in a situation very different from the rest, characterized by a society based on man, for man and by man.
As the economic activity environment becomes more global, companies face new challenges with an accelerated rate of change. The ability of managers to redistribute resources has become a decisive factor in their success. Flexibility and adaptability are key concepts, the policy, structure and organization of companies are questioned and perfected.
If we take a look at global business development from the 1960s to the present day, we will see what:
| 60s: | Emerging markets: | Consortia |
| Export stimulated | ||
| 70's: | Risk diversification. | Product portfolio analysis |
| Business rationalization attempt | ||
| 80s: | Market globalization. | Cost analysis. |
| Global liberalization. | ||
| 90's: | New definition of markets. | Flexibility and adaptability |
| Uncertainty. |
Therefore, managers will need new knowledge and skills to cope with the new situation imposed by world development and from which they cannot escape.
But, are the managers of our Cuban companies in a position to face the necessary changes imposed by the environment?
Development
Given the constantly changing circumstances of the environment, companies will only remain competitive if they know how to adapt to change. Cuba is not an exception to these new conditions, perhaps imposed, not by the same situation that the rest of the world is going through, but by the same stage and the influence of these conditions of economic crisis that we have had to live through, after the collapse of the socialist field and for the same necessity, imposed by this own crisis, to open our economy to the international market, insert ourselves in that competitive and changing world and at the same time to perfect our internal economy. This process of change that is imposed, must be directed, even if the modifications that it requires, question the aims and structures of the company.
It is necessary to face all kinds of challenges, the greatest fear is fear itself. If these challenges are not accepted, the company loses competitiveness, therefore, overcoming the change means overcoming the risk and the uncertainty that it produces.
We can observe the interaction between the acceptance of change by senior management and the risk factor, the greater the danger faced by the company, the greater the need for change in management. A company that is facing a medium or low risk and whose management resists change will freeze, it will only maintain its position in the market if it is static, in any other situation its market share will decrease.
In the event that the company is in high risk circumstances, the inability of the directors to adapt can be dangerous: the company will not be far from liquidation and can only be saved if it completely breaks with its past: a new man, with new abilities and skills.
The two positive quadrants of the matrix show how the positive conduction of change transforms risk. The frank commitment of the management in the assumption of changes, in situations of low to medium risk, will mean achieving the proposed objectives; in a high-risk situation, it will represent taking advantage of exciting opportunities.
The higher the bet, the higher the profit, the commitment to direct the change is decisive.
Balance can only be achieved if the four crucial dimensions for the company are recognized:
The strategic goal defines the change that the company is going through: it can only advance rapidly along this path if its organization, its spirit and its management reflect this aim. Therefore, a total approach to the business will be decisive. Every company will seek the optimal combination of its financial assets; technical capacity and human resources if you want the dominance of a specific area of the market. therefore, in every aspect of management, an indispensable virtue of any effective executive must be the ability to cope with change.
What is performance audit?
Management Audit is a relatively new technique, of advice that provides experienced consultants as an independent service, it is a vital auxiliary resource in the analysis of the present and future situations of the company. It appears next to the other and more common controls: the financial audit and other analyzes (intellectual property, brief roots, facilities and environmental factors)
The performance audit concerns the internal structure and management personnel of a given company. It aims to enhance the ability of this company to successfully cope with change, building on the existing management team. It tries to help the general management in the objective assessment of its internal organization and its top executives, especially when profound changes are coming.
The performance audit aims at evaluating the strengths and weaknesses of an organization, its management team and its corporate spirit. It establishes recommendations on how to optimize the effectiveness of the organization, including a new deployment of human resources. The strategic objectives of the company constitute the central point of the Management Audit: the recommended structure and composition of the management must achieve it.
The Management Audit provides an overview of the quality of the management team and its structure, both in absolute terms and in relation to the strategy in the businesses of the competition and of the clients. Therefore it focuses on the top managers of each organizational unit. It focuses on the future, towards the horizon of 5 to 8 years to come. Thus, the main question posed by the Management Audit has two parts:
- Is the management team in a position to cope with the upcoming changes? Is the management team in a position to face the current changes?
What does a performance audit intend?
Management Audit allows a company to adapt its main human resources to the changing conditions of the business environment.
It also ensures that the existing management team is in good shape. But what fundamental qualities should management have?
Real talent is a rare asset, so Management Audit is a very useful tool for general management. Most of the other elements that an organization requires to function can be acquired; generally by negotiation. Money can be obtained; products can be developed and markets can be penetrated.
Motivation constitutes the driving force of any structure. The general management can decide which qualities will give rise to promotion, but among them cannot be the motivation of the individual. This should be susceptible to measurement, especially in its teamwork, to ensure that all managers working together are cooperating as a result of the strategic objectives.
However, as good as a team is there must be a boss; steering by example is more effective than steering by command. Most prosperous companies are run by people who lead by example.
On the one hand, the directors or administrators are people of a recognized capacity and for this reason they have all the necessary elements to carry out their functions satisfactorily. On the other hand, administrators use specialists and experts in turn, in order to make the work of administration even more efficient.
However, to the foregoing, supervision and review by other people is required, so that they can independently judge, criticize and comment on the work that administrators have carried out with the best of intentions.
Through a financial audit, the auditor determines in his opinion the authenticity of the financial situation and the results reflected in the Financial Statements, indicating the effects produced by administrative decisions and policies.
The leaders of an organization, using human elements and materials at their disposal, implement and make decisions that satisfy the company's situation.
These policies and decisions can be translated into financial expressions such as expenses, costs, profits, etc. therefore these are reflected in the financial statements. This is how the auditor points out the effects of administrative action.
This audit makes indications and provides advice on the basis of good or bad administration, but not enough to demonstrate what were the causes of these decisions, whether or not they should have been avoided and whether the results were the most appropriate according to the characteristics of the business.
For this reason, in parallel with the progress of administrative techniques and procedures, it is necessary to create a proportional tool that fosters a review through which the administration is served. This tool is called Management Audit, that is, review and evaluate the policies, decisions, procedures and objectives that emanate from the human factor at all levels.
In summary, the aspects that are reviewed by the Management Audit can be identified, as well as the information and the purposes that such audit pursues.
Examine
- Objectives-Plans, Policies, Methods, Norms, etc. Organizational Structure of the company. Use of physical and human resources
Informs
On the efficiency or inefficiency of administrative action with the aim of measuring the achievement of strategic objectives.
Purposes
- Increased quality Highlight opportunities. Eliminate waste and losses. Observe the performance of the controls. Ensure that the policies and procedures are well used. Monitor the fulfillment of company objectives and plans. Study with new sense of collaboration new ideas and innovations that lead to administrative excellence.
In conclusion, the Management Audit helps the administration to reduce costs and increase profits, to take better advantage of the human and material resources to achieve the objectives for which the company was created.
But, how to be prepared to face a performance audit ?
The basis for conducting the audits is internal control. There is a directly proportional relationship between the efficiency of the internal control system and the depth of the audit tests and the responsibility that an auditor may assume in conducting them. That is why the existence of an adequate and efficient internal accounting and administrative control system is the fundamental guarantee for obtaining good results in audits.
Therefore, it is first necessary to be clear about what internal control is:
It is an integrated process of operations carried out by the management and the rest of the personnel of an entity to provide Reasonable Security to the achievement of the reliability of the information, the efficiency and effectiveness of the operations, the fulfillment of the laws, regulations and established policies., as well as the control of all kinds of resources available to the entity.
It is characterized by being a process carried out by the entity's people at all levels, where each person who directs at their level is responsible for internal control before their immediate boss and in their compliance all workers participate without exception and their The function is to facilitate the fulfillment of the objectives, in turn providing a certain degree of reasonable security and promoting the achievement of self-control, leadership and the strengthening of the authority and responsibility of the labor groups.
It is very important that each group identifies their values and that they are shared, it is necessary that in this constant exercise, relating behavior and values, the positives are established and rejection of the negative is created, the study of the code of ethics must be systematized in the labor groups.
We are in times of crisis and that means "time of opportunity" for decision-making. One of the biggest problems when analyzing the profitability of the company is to see how it has been reduced and it is not necessarily due to the decrease in sales.
When dealing with this problem, one of the most effective solutions is to plan and apply changes, what is now called "reengineering." To carry it out, you must not only know the company, but also the market, the world, the economy, technology, competitors and the country's politics.
That is why the consultants are the most suitable to carry out this complex study.
A few decades ago, business owners took their jobs and made an adjustment, a change - sometimes traumatic - and everything was working again. Today, being globalized and with rapid technological changes, it is no longer possible to do it "one", you need professionals.
Therefore, it is necessary to work to achieve internal control that guarantees business economy, efficiency and effectiveness, so that the results of the management audits are satisfactory, which means that the planning, control and use of the resources of that we have is effective.
Conclusions
Public officials have the responsibility to use all resources with efficiency, economy and effectiveness in order to achieve the purposes for which these resources were provided, being responsible to the public and to other levels and branches of government for the resources provided to finance government programs and services at your expense.
Consequently, they are obliged to present appropriate reports to those who must be accountable for their management.
They must therefore establish and maintain an effective internal control system to ensure that appropriate goals and objectives are achieved, that resources are safeguarded, that applicable laws and regulations are met, and that reliable information is obtained, retained, and reasonably disclosed.
The accounting audit is an important part of the accountability process since it allows an independent opinion to be issued regarding whether the financial statements of an entity reasonably present the results of financial operations and whether other financial information is presented according to established or declared criteria. expressly.
Performance auditing is also an important part of the accountability process, as it leads to an independent opinion about the degree to which public officials carry out their responsibilities with loyalty, efficiency and effectiveness.
Bibliography
Carmona, González, Dra. Mayra, The internal control in IDECOP, monograph, year 2001.
Flores Konja Dr. Julio and Gutiérrez Huby Lic. Ana M., Auditor's work before the management audit, 2003
Ministry of Audit and Control, Methodological Guide for conducting Management Audits, 2003.
Navarro Gomollón, Ángel J., 1998. «Ethics in Company-Auditor Relations». In: Senior Management Magazine. Year 32 (198). March April.
