At the time of implementing the internal control system, the company must develop a procedures manual, in which it must include all activities and establish responsibilities of the officials, for the fulfillment of the organizational objectives
Procedures manual
The procedures manual is a component of the internal control system, which is created to obtain detailed, orderly, systematic and comprehensive information that contains all the instructions, responsibilities and information on policies, functions, systems and procedures of the different operations or activities carried out in an organization.
Companies in the entire process of designing and implementing the internal control system, have to prepare comprehensive procedures of procedures, which are the pillar to be able to adequately develop their activities, establishing responsibilities to those in charge of all areas, generating useful and necessary information, establishing security measures, control and self-control and objectives that participate in the fulfillment of the business function.
The internal control system, apart from being a management policy, is constituted as a support tool for the directives of any company to modernize, change and produce the best results, with quality and efficiency.
Continuous improvement
The evaluation of the internal control system through the procedure manuals consolidates the strengths of the company in the face of management
Due to the importance of the internal control system for any entity, it is necessary to survey current procedures, which are the starting point and the main support to carry out the changes that are so urgently required to achieve and ratify the efficiency, effectiveness, effectiveness and economy in all processes.
Objectives and policies
1. The development and maintenance of a line of authority to complement organizational controls.
2. A clear definition of the functions and responsibilities of each department, as well as the activity of the organization, clarifying all possible gaps or areas of indefinite responsibility.
3. An accounting system that provides timely, complete and accurate information on the operational and organizational results of the whole.
4. An information system for the management and for the various executive levels based on registration data and accounting documents and designed to present a sufficiently informative table of operations, as well as to clearly expose each of the procedures.
All the procedures found in the manual must be objectively and technically identified, giving it the importance that each one deserves within the production or operational process.
5. The existence of a mechanism within the structure of the company, known as evaluation and self-control that ensures an effective analysis and the maximum possible protection against errors, fraud and corruption.
6. The existence of the budgetary system that establishes a procedure for controlling future operations, thus ensuring the projected management and future objectives.
7. The correct arrangement of valid controls, in such a way as to stimulate the responsibility and development of the qualities of the employees and the full recognition of their exercise, avoiding the need for superfluous controls as well as the extension of those necessary.
Contents of the procedures manual
1. Title and code of the procedure.
2. Introduction: Short explanation of the procedure.
3. Organization: Micro and macro structure of the entity.
4. Description of the procedure.
4.1. Objectives of the procedure
4.2. Rules applicable to the procedure
4.3. Requirements, documents and file
4.4. Description of the operation and its participants
4.5. Procedure flow chart or diagram
5. Responsibility: Authority or delegation of functions within the process.
6. Security and self-control measures: Applicable to the procedure.
7. Reports: Economic, financial, statistical and recommendations.
8. Supervision, evaluation and examination: Self-control management and control entities.
Justification of the manual content of procedures against internal control
These manuals are developed for each of the activities or operations that have to do with administrative and operational processes, in accordance with the guidelines and requirements established by law.
Depending on these elements, the application would be given at the time of raising and justifying:
- The establishment of objectives The definition of policies, guides, procedures and norms The evaluation of the organization system The limitations of authority and responsibility The norms of protection and use of resources The application of a system of merits and sanctions for the administration of The generation of recommendations The creation of effective information systems The establishment of procedures and standards The institution of management control and evaluation methods Establishing induction and training programs for personnel The development of information systems rules and formalities of the procedures.
The generation and application of procedures are applicable to each of the companies, in the different articles referring to Internal Control it will be possible to delve into the specific issues of each department or business section.
