Internal Control Review

What is an “Internal Control Review” (ICR)?

An ICR begins with an evaluation of the important business processes and procedures in your company. A report is then written detailing your company’s vulnerability to misappropriation of assets and inaccurate reporting. Recommendations are made where appropriate concerning organizational structure and operating efficiencies.

Why does any company need to have an ICR?

Very few business owners want to believe that their employees (or family members) are dishonest or that company assets are being stolen – but it happens every day. Is cash flow unexpectedly low? Does one “trusted” person handle multiple responsibilities – write checks, reconcile bank statements, issue credits, enter supplier invoices for payment, handle cash receipts? One of my clients had a daughter who ran the office and paid the bills. When the daughter was out of the office for two weeks the business owner discovered that she had also paid her own bills and misappropriated assets worth over $30,000. He never thought in his worst nightmare…

What business processes can be reviewed for an ICR?

Processes are reviewed as modules:

1. Cash receipts & accounts receivable 2. Cash disbursements & accounts payable 3. Inventory & fixed assets (property, plant & equipment) 4. Accounting systems & computer operations

Where do I get the information for preparing the ICR?

The information for the ICR Report is generated from a series of questions, issues and internal documents that I review with employees involved in the business processes.

What preparations must a client make before I arrive?

In order for me to complete the ICR in the allotted time the client must ensure that all of the people who need to be interviewed for the processes are available, and process documentation if it exists.

How long does it take to conduct the ICR and what is the cost?

The ICR for each module takes approximately one-half day - 3 1/2 hours to conduct the interviews and prepare the report, and one-half hour for a review session with the business owner. The cost is $600 per module, paid at the end of the work session. The number of modules in the ICR depends on the company’s situation or specific issues.

How can a prospective client find out more about the ICR or arrange a review?

Call 336.292.1391 or send an email to bob@baberconsulting.com to set up a no-charge meeting to find out more about the process or to schedule a work session.