Financial Transaction Control Process of

Controlling• Controlling is one of the managerial functions like planning, organizing, staffing and directing.

• It is an important function because it helps to check the errors and to take the corrective action so that deviation from standards are minimized and stated goals of the organization are achieved in desired manner.

• It is a foreseeing action whereas earlier concept of control was used only when errors were detected.

• control comprises three main activities: setting standards, measuring actual performance taking corrective action

Suzlon Energy

• Suzlon Energy is a global wind power company based in India

• Conceived in 1995 with just 20 people• Suzlon is a multinational company with offices, R&D

and technology centers, manufacturing facilities and service support centers spread across the globe.

• Suzlon delivers end-to-end wind power solutions from assembly, installation to commissioning

• Suzlon operates the largest wind park in the world, the 584 MW wind park in the Eastern Ghats-Tamil Nadu.

What is a financial control?

• A financial transaction control is a procedure that is intended to detect and/or prevent errors, misappropriations, or policy non-compliance in a financial transaction process.

• It ensures that resources are effectively collected and used, and accurately accounted for.

• May be performed by either an individual or as part of an automated process within a financial system.

Financial transaction process stages

Entity set-up review

Transaction review

Transaction verification

Post-transaction report review

Reconciliation

Balance analysis

Types of financial controls

• Transaction initiation review and approval

• Asset receipt verification• Post-transaction review• Balance reconciliation• Balance analysis

Transaction process risks

• Error in accounting classification• Number or arithmetic error• Unintentional asset misdirection error• Misappropriation• Fraud• Regulatory, contractual, or policy non-

compliance

Control procedure strength levels

• The strength, or level of reliance, placed on a financial control procedure in managing risks depends on three key factors:Quality Control objectives of the control

procedureSkills, qualifications, and accountability of the

individual assigned to perform the procedureAdequacy of separation of duties within the

process.

Procedure Control

Strength

Typical Attributes

Procedure Control Quality Objective

Staff Skills and Qualifications

Separation of Duties

StrongComplete, thorough transaction review

Strong knowledge and analytical skills, and experience

Adequate

Moderate

Complete, but cursory; or limited scope, but thorough transaction review

Somewhat knowledgeable and experienced, with adequate analytical skills

Adequate

Weak

Cursory and/or limited scope transaction review

Minimal knowledge, experience and/or analytical skills

Inadequate

CONCLUSION• A well-managed financial transaction process ensures that each

completed transaction complies with all of the seven transaction control standards applicable to the process.

• Appropriate• Valid• Reasonable• Funded• Accurately recorded• Supportable• Timely recorded

• Well-managed units effectively balance operational efficiency with the strategic deployment of financial controls.

REFERENCE

• WWW.WIKIPEDIA.COM• WWW.GOOGLE.COM• WWW.SUZLON.COM