Evaluation and strengthening of internal financial controls to ensure accuracy, compliance, and risk mitigation.
Internal Financial Control (IFC) is an essential framework for ensuring reliable financial reporting and effective risk management. It involves identifying processes, assessing risks, evaluating control design, and testing their effectiveness. A strong IFC system not only supports statutory compliance but also strengthens governance and operational efficiency.
Process Understanding & Documentation
Identify and document key business processes (Procure-to-Pay, Order-to-Cash, Hire-to-Retire, Treasury, Fixed Assets, Inventory, IT, etc.).
Understand existing workflows, approvals, and system controls.
Map process owners and responsibilities.
Risk Identification
Identify potential financial reporting and operational risks within each process.
Link risks to possible misstatements, errors, frauds, or compliance failures.
Control Design Assessment
Evaluate whether existing controls are adequately designed to mitigate identified risks.
Cover preventive, detective, and corrective controls.
Check alignment with the COSO framework (Control Environment, Risk Assessment, Control Activities, Information & Communication, Monitoring).
Control Operating Effectiveness Testing
Test selected controls over a sample period.
Verify evidence of approvals, reconciliations, and compliance with defined policies.
Assess gaps between “design” vs. “actual practice.”
IT General Controls (ITGC) & Application Controls
Review system access, change management, backup, and security controls.
Check automated application controls relevant to financial reporting.
Gap Analysis & Remediation Plan
Identify control weaknesses or process gaps.
Recommend corrective actions (process redesign, automation, segregation of duties, stronger documentation, etc.).
Classify findings as High / Medium / Low risk.
Reporting
IFC Documentation: Narratives, Risk Control Matrix (RCM), Flowcharts.
Management Report: Summary of control effectiveness, deficiencies, and suggested improvements.
Certification Support: Assist management in their annual declaration on IFC under Section 134(5) of the Companies Act.
Implementing robust internal financial controls provides organizations with improved reliability in financial reporting, reduced risk of fraud, and enhanced compliance with statutory requirements. It also promotes a culture of accountability and strengthens investor and stakeholder confidence.
