Deloitte’s three-part series explores the potential benefits your business can derive from risk assessment, effective internal control design, and regular monitoring.
Public and private companies are subject to different regulatory requirements regarding their financial and operational information, including to whom the information is provided and the level of detail it must contain. Nevertheless, any business can benefit from the availability of transparent financial and operational information for decision-making and reporting to stakeholders.
As the owner, manager or investor of a private company, what can you do to increase your certainty about the information coming to you from across the company?
Whether your business is venture capital backed, privately funded, or a family business, internal controls are an important part of the answer as you grow. They can be an integral part of operations that can help mitigate risk and add business value.
A system of internal controls should be informed by a sufficiently detailed and periodically performed risk assessment that identifies critical processes that are prone to error, thereby potentially creating quantitatively and qualitatively significant risks to your business. A risk assessment can help you determine the impacts your business could suffer if such errors occur and help you focus on the ones that matter most to your business strategy and operations.
A risk assessment helps you think critically and answer questions such as:
Once done, it’s time to design and implement the internal controls
With documented controls in place, it’s time to close the loop on the controls environment by developing an effective monitoring program that can help you maintain, monitor, and streamline controls over time.
A thoughtful and agile internal control framework, focused on key risks, can provide a mechanism to support the strategic direction of your business. It can help drive sustainable value by providing business insights and validating data used to develop financial reports. It may even help make your business more competitive and attractive to suitors in the future, depending on your strategic goals.
For more information contact:
Ashok Parmar, Partner
Deloitte & Touche srl
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