Internal Financial Controls

Services
Internal Financial
Controls

Develop an integrated framework for operational, financial and fraud controls & audit the operating effectiveness of the framework

“Internal financial controls” means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

Internal Financial Controls being a statutory requirement under the Companies Act 2013 requires companies of all types to put an Internal Financial Controls (IFC) or Internal Controls Over Financial Reporting (ICFR) framework in place and ensure its operating effectiveness by testing the framework.

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Further, the Importance of IFC or ICFR cannot be explained better than Section 134 (5) (e) of the Companies Act 2013, whereby directors need to make an assertion in Directors Responsibility Statement that they have laid down internal financial controls to be followed and that such IFCs are adequate and operating effectively.

Apart from the Directors Responsibility Statement, the Independent Auditors Report is also required to mention the existence and operating effectiveness of the Internal Controls Over Financial Reporting. Keeping in mind the statutory importance of IFC or ICFR, we provide the below services:

Design and Implementation of Internal Financial Controls (IFC or ICFR) Framework :
PACE provides professional support in Design and Implementation of Internal Financial Controls (IFC or ICFR) Framework by evaluating your organization’s business processes and its inherent risks. In line with the COSO framework, risks are assessed at entity level, operational level and IT General Controls and current business processes are mapped to the risks to evaluate whether adequate processes are in place to mitigate the risks.
Additionally, fraud risks are evaluated across various business processes & systems and appropriate controls defined for prevention and detection of frauds and errors.
Testing the Operating Effectiveness of Internal Financial Controls or Internal Controls Over Financial Reporting Framework:
We conduct comprehensive audit for assessing the operating effectiveness of the IFC / ICFR Framework using the prescribed guidelines.
Periodic audit of the framework enables the management in understanding the current status of its controls and in timely remediation of ineffective controls.
The audit reports are presented to the Management, Internal auditors, Independent auditors, Audit Committee and Board of Directors as an assurance for implementation and audit of the IFC / ICFR framework.
Apart from independent testing of the framework, we also assist in successful running of the IFC controls-self assessment program for organizations.
Define Internal Financial Controls (IFC) Management Policy:
We assist organization to define Internal Financial Controls Management Policy to help effective implementation, monitoring and reporting on the framework.
Benefits
✦ Fulfills mandatory compliance to Companies Act
✦ Creates repository of risks with respect to entity level, business processes and IT general controls
✦ Serves as early warning signals for weak controls and helps in prevention and detection of frauds
✦ Timely remediation of ineffective controls thereby improving the control environment
✦ Enhances Corporate Governance Structure of the Organization thereby improving the confidence of the Independent Auditors, Board, Investors and Stakeholders
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