The importance of financial control is difficult to overestimate. After all, it is one of the forms of checking the legality of the cash flow of any link. The existence of such a concept is due to the fact that the monetary function in any state has an inherent control function. In practice, it is carried out precisely thanks to financial control, which is designed to verify the implementation of economic activities in terms of their legitimacy, economic feasibility and legality.
Main aspects
The concept and importance of financial control is considered as:
1. The activities of specially created state control bodies that monitor compliance with financial. disciplines.
2. One of the main elements of cash flow management at the micro and macro levels, with the goal of ensuring the efficiency and feasibility of business operations.
These two aspects, which determine the concept, as well as the importance of financial control, are closely interrelated with each other. They differ only in methods and goals, as well as in subjects subject to verification. If the first option considers the quantitative as well as the legal side of monetary discipline, the second focus is on the analytical side of the work.
What is financial control?
There are many types of checks. Some of them consider the activities of enterprises and organizations in the environmental sphere, others check sanitary discipline, etc. However, all these and many other types of activities are not included in the concept and importance of financial control. Financial discipline - this is the main subject that is considered during such inspections. When they are conducted, categories related to cost are studied. These are indicators such as income and profit, cost and profitability, value added tax and costs, deductions to certain funds and for various purposes. These indicators are synthetic, and therefore cover all aspects of commercial and industrial activities, as well as monetary relations between enterprises.
Thus, the concept and importance of financial control can be briefly described as a set of various activities that are carried out by organizations specially created for these purposes. The objective of such control is to verify the cash and related transactions of state bodies, municipalities, legal entities of any form of ownership, as well as the population. All this is necessary to create sound financial policies and a well-functioning financial mechanism.
Object and subject of control
Financial verification at any level affects the issues of the monetary system. She is not interested in either the state of our environment or technical mechanisms. The most important for her are the monetary processes that take place in the formation, distribution and use of local budgets. This is the object of such control. And his subject is:
- budget indicators;
- financial components of the activities of legal entities;
- indicators indicating monetary relations, namely, settlements carried out with the participation of commercial banks;
- indicators characterizing the insurance market.
That is, everything that is contained in accounting documents, estimates, reports, etc.
Content
To complete the coverage of the topic, it is important to consider another important issue. Namely, the concept, meaning and content of financial control. What is meant by the content of such an important function of the state? This concept includes various kinds of operations that are carried out in the form of audits or inspections either by state bodies or local government bodies. Sometimes the bank is the controlling organization. All these operations are aimed at ensuring the efficiency of financial activities of municipalities and state entities. These control operations include:
- checks designed to reveal the completeness of fulfillment of financial obligations to the budget by not only organizations, but also individuals;
- checks on the intended use of the amounts allocated from state and local funds, as well as budgets;
- verification of the exact execution of cash discipline, as well as compliance with the rules for receiving and using foreign exchange earnings;
- verification of the overall financial and economic work of enterprises, etc.
Targets and goals
Financial control contributes to the successful implementation of the monetary policy of business entities and the state. If we consider the concept and importance of financial control, its goals and objectives, it becomes clear that it ultimately ensures the effectiveness of the formation, as well as the distribution and further use of budget cash flow.
This is its main goal. As for the tasks, the checks carried out by specially created bodies for this purpose are designed to:
- ensure compliance with banking, budgetary and civil legislation in the financial sector;
- identify the untimely and incomplete payment of tax obligations to the budget;
- promote the targeted and efficient use of cash flows;
- identify a reserve that can increase the level of financial resources;
- ensure the accuracy of reporting and accounting.
The concept and importance of financial control is extensively used in budget audits. In this case, issues such as:
- competent budgeting at various levels, as well as the correctness of their implementation;
- compliance with the principles of accounting. accounting, as well as current tax legislation;
- targeted use, as well as the effectiveness of investing in the state budget and extra-budgetary funds;
- identification of the reserve of savings and quantitative growth of public funds;
- suppression of offenses relating to the public sector;
- conducting outreach and preventive work in order to improve financial discipline.
Methods
The concept, value and content of financial control can be determined on the basis of those methods that are used in its implementation. The application of a particular method depends on several factors, namely:
- features of the form of activity and legal status of inspection bodies;
- the purpose and object of control;
- grounds for verification, etc.
What does financial control provide for? The concept, meaning, types, financial discipline - all these terms can be deciphered only when determining the specific method of verification. How are those methods that are used by specialists classified?
According to the methodology, the ongoing financial control can be divided into:
- inspections during which issues of economic activity that study consumables and reporting documents are considered;
- surveys covering a fairly wide layer of the financial and economic activities of the subject and determining the financial condition of the enterprise, as well as prospects for its further work;
- supervision carried out by regulatory bodies of entities licensed to carry out financial activities;
- analysis, involving a detailed study of the annual or periodic financial statements to make a general assessment of the business entity;
- monitoring (observation), which is constantly conducted by credit organizations in relation to their customers;
- audit, that is, a full examination of the results of the financial and economic work of a legal entity in order to verify its correctness, legality, effectiveness and expediency.
Types of Checks
Depending on the competence of the state body or local government, one or another method of exercising control is applied. So, there are checks:
- thematic, studying individual aspects of the enterprise;
- documentary, conducting analysis only on the basis of reports, balances, etc .;
- tax, which are a variety of thematic and are carried out by officials of the Inspectorate of Taxes and Taxation.
Based on the results of the checks, an act is drawn up. The exception is only the summing up of work by representatives of the
Accounts Chamber of the Russian Federation. Here, at the end of the audit, a conclusion is drawn up.
The acts reflect the facts of violation of tax legislation and put forward proposals to eliminate them.
Principles
All checks and audits are not possible without publicity and planning. All these concepts relate to the basic principles of financial control. It can also include law and federalism.
Consider the concept, principles and importance of financial control:
1. This is, above all, the rule of law. In financial activities, this concept means that the creation, distribution and further use of cash flows is regulated by the approved rules on financial law. If they are followed, it is possible to apply various coercive measures to the offender. If a legal entity does not comply with the requirements of legislative and other regulatory acts, this will certainly entail instability in financial relations, and will also have many other negative consequences.
2. Publicity. This principle works in the implementation of a particular financial activity. It manifests itself in the fact that, through various mass media, information is circulated to citizens on the content of draft financial and legal acts, as well as on the results of work carried out by audits and inspections.
3. Federalism. This principle is manifested in the fact that, according to the Constitution of the Russian Federation, there are some distinctions in the competence of the constituent entities of the Russian Federation in the field of finance, concerning monetary emission, credit regulation of taxation, etc.
4. Planning. Compliance with this principle leads to the fact that the general financial activity carried out by the state is based on a whole system of financially-planned acts. Their structures, the procedure for drafting, subsequent approval and execution are enshrined in the relevant legislative and regulatory acts.
Along with general principles, the construction of financial control is carried out on some specific principles, namely the independence, objectivity and competence of the inspection bodies.
Types of control
As you can see, conducting checks in the field of the correct use of cash flows covers various areas of society.
That is why the effectiveness of such work directly depends on its organization, forms and methods.
Consider the concept and importance of financial control and its types. It has a distinction depending on which entity the audit is carried out, on the time, etc.
Classification
Consider the concept, value and types of financial control, depending on various reasons. For example, based on the time. This financial control is divided into preliminary, as well as current and subsequent. All these types of inspections are widespread in the work of bodies that monitor compliance with discipline on the movement of cash flows. As for the preliminary control, it is carried out before the start of education, further distribution and subsequent use of funds. What is the concept and significance of financial control of this type? It is designed to prevent violations of financial discipline.
Operational or current checks are already carried out during the implementation of monetary operations. They control the receipt and further use of cash flows. Their task also includes consideration of timeliness and correctness of fulfillment of financial obligations to the country, etc.
What is the main purpose of subsequent reviews? They control the spending of funds after the end of certain financial transactions. In this case, the concept and importance of financial control is also great. Subsequent inspections show financial discipline most clearly. Here you can easily identify all its violations, as well as recommend ways to prevent them and various measures to eliminate them.
Also, the types of control that take place are classified as mandatory and proactive. The first of them is carried out in accordance with applicable law. The second is at the initiative of the competent public authorities.
The concept, meaning and types of financial control can be described depending on what it is carried out by bodies (entities). In this case, inspections initiated by:
- bodies implementing local self-government and state power;
- the president;
- executive bodies.
State control
It is necessary to implement the country's financial policy and create the most favorable conditions for economic stabilization.
The concept, value and role of financial control on the part of our state are great. This is not only a check on the completeness and correctness of the federal budget. It also includes control over the use of monetary and credit resources, the state of external as well as internal debt, and the provision of tax and financial advantages and benefits.
The legislative bodies and executive bodies specially created for these purposes exercise control of cash flows from the state. These include:
- Federal Treasury;
- Russian Audit Chamber;
- Central bank;
- The service of fiscal control.
The legislation approved the need for annual comprehensive audits, as well as thematic audits by financial and regulatory authorities, not only in state executive authorities, but also in other organizations, as well as in enterprises.
Other types of control
Financial control is also delimited into internal and departmental, audit and public. Let's consider them in more detail.
So, we will highlight the concept and importance of financial control, financial control bodies in the implementation of departmental audits. The organizations called to guard the monetary discipline include, first of all, the ministry. Its audit bodies conduct audits of the activities of those institutions that are part of the corresponding system. The same work is carried out by various departments. But on-farm control over the use of cash flows are designed to conduct those business entities that are not included in any system.
In some cases, which are directly indicated in legislative acts, business entities conduct a mandatory audit. This type of control can be proactive. In this case, auditors are invited by decision of the administration of the enterprise. The purpose of such verification is to establish the reliability of the financial statements of business entities.
The work of the Ministry of Finance
What is the concept and importance of financial control in the Russian Federation? It is so large that one of its main subjects is the Ministry of Finance of Russia. This executive authority exercises functions related to the development of state policy, as well as the legal regulation of such areas as insurance and foreign exchange, banking and auditing. The Ministry of Finance also considers issues of accounting and accounting, auditing, processing, production and circulation of precious stones and metals, etc.
The concept and importance of financial control in the Russian Federation is formed largely due to the activities of this body. In its work, the Ministry of Finance is guided by the Constitution of Russia, as well as acts of the President, state laws, international treaties, etc.
Ways to improve
Currently, the regulatory authorities are tasked with increasing the efficiency and effectiveness of their inspections. In this case, the most priority areas are:
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