Financial Education - Let's get to know the guidelines of internal administrative and accounting control

Taking into account the different concepts of internal control, even a good part of them we have discussed in my blog, today I bring you a summary of how they can be divided into two main groups.

The first group is the administrative internal control, are the existing procedures in the company to ensure operational efficiency and compliance with the guidelines defined by management.

Therefore, administrative or operational controls refer to operations that do not have a specific impact on the financial statements because they correspond to another framework of the business activity, although they may have an impact on the financial-accounting area. Internal administrative control should include analyses, statistics, performance reports, personnel training programs and product or service quality controls.

The second type is internal accounting control, which can be said to include methods and procedures related to the authorization of transactions, such as financial and accounting records, controls and methods established to ensure the protection of assets and the reliability and validity of accounting records and systems.

This accounting control refers not only to control standards with a purely accounting basis, such as, for example, supporting documentation for records, account reconciliations, attendance of a chart of accounts, review of entries, valuation standards, etc.; but also to all those procedures that, while affecting the financial situation or the information process, are not strictly accounting or recording operations, i.e., authorizations of collections and payments, bank reconciliations, verification of collections.