Business process controls are designed to prevent fraudulent activity in a company, and attempting to run an organization without them is not only risky but, in extreme cases, may lead to a corporation’s demise. Business owners often struggle to develop and implement these, as it is nearly impossible to identify every area of potential theft and loss from an internal perspective. Fortunately, a business consultant will evaluate the current checks and balances in place and recommend modifications to reduce the likelihood of fraud without affecting the effectiveness of the staff members.
Entry Level Control Development
The key to ensuring the success of controls is creating buy-in at the very top of a company’s organizational chart. Executive leadership and management should create a culture within their organization that encourages the use of controls and depicts them as necessities to ensure the future success of a company. If those in lower-level positions don’t believe the controls are essential for success, it will likely lead to frustration and a lack of desire to comply with them.
The use of technology is one of the best ways to implement controls within a corporation. In addition to the automated checks and balances that accompany software, a company should also have a dedicated team member responsible for granting and blocking access to the various software programs and databases a company uses. IT controls are some of the most important and effective controls available.
Some aspects of a company’s operations are completed manually and are often the most likely source of internal embezzlement and other forms of fraud. Manual controls, such as requiring several check signers and having account reconciliations completed by a third party, are effective at eliminating these forms of illicit activity. Checks and balances of this nature should be embedded in a company’s operations and designed to hold employees at all levels accountable.
Failing to implement the proper controls may lead to disastrous results in the future. Kirk Chewning helps companies of all sizes develop effective controls that help eliminate the most common causes of illegal activity. Call today to learn more about the benefits of internal controls and take the first step in protecting a company.