Control is one of the main functions of the entire management process, at any level. It is carried out in different segments of the company’s activities, depending on which its corresponding types with its components are distinguished: for example, types of financial control and others.
Audit of finances, being a form of implementation of their controlling function, is necessary in a society based on commodity-money relations. Naturally, in a market economy, the role of cash flow control is especially growing.
Financial control is very important to ensure the reliable functioning of this entire system and its security, and the implementation of relevant policies by the state.
The goals and, accordingly, the tasks of financial control reveal its content. Their main purpose is to timely receive all the required information on the progress of financial management processes at both levels (micro and macro), as well as on violations identified. Thanks to the data obtained, it becomes possible to make the decisions necessary to manage these processes. And they are implemented precisely in the tasks of capital audit.
The organization and conduct of financial audits are based on certain principles of financial control. These include:
- legality - the existing legal framework that ensures control;
- objectivity - the lack of bias and the validity of conclusions;
- independence - guaranteed by applicable law;
- publicity - the general availability of control results subject to the observance of the rules and regulations that relate to state and commercial secrets;
- responsibility - conscientious attitude and performance by employees of regulatory bodies of their official duties;
- delineation of functions and powers - involves the absence of duplication in the activities of various regulatory bodies;
- consistency - means a single legal framework and frequency in the implementation of specific financial control measures.
The types of financial control are determined by various parameters.
Controlling and controlled organizations connects two of their types:
- external, which is carried out by state, public and audit control organizations or firms;
- internal, that is, control of higher authorities over lower ones, internal service function, due to which the proper functioning of the organization is ensured.
According to the area of financial activity, the following types of financial control are distinguished:
- tax - this system monitors compliance with the law, the correctness of the calculation of taxes, as well as other types of mandatory payments, the completeness and timeliness of their payment;
- budgetary - these are thematic inspections and comprehensive audits that are carried out in order to control the receipt of budgetary funds, as well as funds from extrabudgetary state funds and their intended use;
- banking - controls the degree of efficiency of the use of issued bank loans, its ultimate goal is to comprehensively strengthen and support payment discipline;
- currency - aimed at determining compliance with the current legislation of operations and the availability of licenses and permissions required for this;
And finally, there are types of financial control over the implementation time:
- preliminary - perform it before any transactions related to cash funds, it helps to prevent violations of financial discipline;
- operational or current - perform in the implementation of monetary operations;
- the next is performed after the implementation of monetary operations, in this case, the degree of financial discipline, possible violations and adequate measures to eliminate them are determined.