Internal Financial Control (IFC) Assessment & Compliance offering from Indiba Consulting
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Transcript of Internal Financial Control (IFC) Assessment & Compliance offering from Indiba Consulting
1 | Copyright © 2014 Indiba Consultancy Services Limited
Internal Financial Control (IFC): Assessment & Compliance Implementation
2
Background
• What is Internal Financial Control (IFC) ?
• Who All Are Responsible?
• Internal Controls – Expected responsibility of stakeholders
• IFC – Beyond Compliance
• Indiba Consultancy’s Offering for IFC – Assessment and Compliance
• IFC – Tools and Accelerators by Indiba Consulting
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Fraud prevention
Operational
Controls
Internal Financial controls Over financial
reporting (ICFR)
IFC
Purchase liability
(AP) is
correctly recorded in
the Financials
Payments to
suppliers is done as
per agreed credit
Policy.
Unauthorized
change in Item price
master (access
controls)
Example
As per Sect ion 134 of t he
Companies Act 2013 , t he term
‘Internal Financial Controls’ means
the policies and procedures adopted
by the company for ensuring:
Orderly and efficient conduct of its
business, including adherence to
company’s policies,
Safeguarding of its assets,
Prevention and detection of frauds
and errors,
Accuracy and completeness of the
accounting records, and
Timely preparation of reliable
financial information.
Definition
What is Internal Financial Control (IFC) ?
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What is Internal Financial Control (IFC) ? Cont...
• Section 134 of Companies Act 2013 Mandates the Board of Directors to state that they
have laid down internal financial controls to be followed by the company and
• That such internal financial controls are adequate and were operating effectively.
• The Companies Act, 2013 imposed specific responsibilities on the Board of Directors and
if the company contravenes the provisions of this section:
• The company shall be punishable with fine which may extend to 25 lacs rupees
and
• Every officer of the company who is in default shall be punishable with imprisonment
for a term which may extend to three years.
• The reporting by the auditors is voluntary for the year ending 31 March 2015 and
mandatory for financial years beginning on or after 1 April, 2015.
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Who All Are Responsible? As per Companies Act 2013
Who All are Responsible
Public
Listed
Compan
y
Public Unlisted Companies
Pvt. Co.
Paid up
Share
Capital >=
INR 20 Cr Paid-up
share
capital >=
INR 10 Cr
Turnover
>=
INR 100 Cr
Loan
/Borrowing
in
aggregate
>= INR 50
Cr
1 Director’s Responsibility,
Statement (134 )
IFC
2 Auditor (143 ) ICFR
3 Audit Committee (177 )
ICFR
4 Independent Directors
(Schedule IV)
ICFR
5 Rule 8(5)(viii) of the Companies,
(Accounts) Rules, 2014 – BOD
report – Financial Statements
ICFR
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Expected responsibility of the stakeholders
Would like to see a robust
framework that is aligned
to accept able standards
Review & question the
basis of your controls
design and ongoing
assessments
Focus on internal controls,
to the extent these relate to
the financial reporting
(ICFR)
Auditors
Responsibility limited
to Evaluation of
Financial Reporting
Controls”
Company
Management
Auditors
Audit Committee/
Independent Director
Create & t est the
framework of internal
controls
• IFC (including
operational &
Compliance)
• Controls documentation
Would rely on the
assessment and view of
the Audit Committee
They may ask for
additional information
Board of Directors
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How will IFC help beyond compliance ?
• Helps in business process re-engineering to plug revenue leakages & cost containment opportunities
• Helps in rationalizing the number of controls across organization – moving to smart and automated controls.
• Helps in standardizing policies and procedures for multi-location/ multi-business Companies.
• Fosters a control conscious work culture for people behind controls.
• Provides assurance to the CEO/ CFO as well as improves business performance.
• In some instances, also serves as a base for blue print of optimal procedures while thinking about ERP (like SAP )
Aimed at strengthening the processes to further improve business, identify cost
containment opportunities as well as drive growth
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Understand, Educate &
Communicate
Plan & Scope Document, Assess &
Remediate
Sustain & Monitor
Understanding
Compliance
requirement
Project Planning Project Management & Quality
Assurance
Project Team &
Training
Control
Assessment Ongoing Training & Communication
Communication
Plan development
Internal Control
Risk Assessment
Monitoring &
Reporting
Internal Control
Framework
Development
Phase 1 Phase 2 Phase 3 Phase 4
Project
People
Proces
s
Internal financial controls (IFC) - implementation methodology
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Indiba Consultancy Offering on IFC
1. At Indiba Consulting we have in depth industry and internal financial controls
assessment, Testing and Compliance expertise.
2. We have developed the IFC accelerating tools for faster and effective
Implementation in specified time frame.
3. Indiba Consulting IFC specialists have provided internal financial controls (IFC)
and Internal Controls over Financial Reporting (ICFR) related services to many
leading companies.
I look forward to being of assistance to you.
If you need help with how go for IFC Compliance
kindly contact us on: +91 9987454045 or [email protected]
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• Strategic Thinker & Business advisor, interest in client Business Models and
methods of execution with a view of creating organizational Culture that is
focused on generating growth and value through Change.
• Professionally qualified Chartered, cost & Management accountant with Ph.D. in
business Management.
• Previously worked as:
Global CFO – SuperMax Group (150 country)
Group CFO – Al Khodari group (Africa & Middle east)
Director Finance & Business planning – PEPSI (GCC)
Head of Finance (Shared Service) – UNILEVER
Finance Manager – MOTOROLA
• A seasoned professional specialized in generating shareholders’ value through
turnaround, reengineering, restructuring, M&A, Legal and tax compliances,
Business system and ERP implementation & Optimization.
• Development of international business & joint ventures. Leading the companies
for getting Investors Funding, PE/VE, IPO and listing them on stock exchange.
• 25+ years of hands-on experience in managing & Leading the business &
finance function at global level heading more than 150 countries.
Dr. Dhirendra GautamDr. Dhirendra Gautam (Ph.D. , CA, CMA, ICWA)
Indiba Consultancy - CEO
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Thank You
Contact us : www.indba.in Mumbai Office : Office No – 203, 2nd Floor, Chawala Complex, CBD Belapur, Sector 15, Navi Mumbai – 400614. UAE : 2204,Fortune Executive Towers T-1, JLT, Dubai United Arab Emirates Cell : +91 9987454045 / 9028013279 Telephone : +91 22 65206530 Email : [email protected]