Standard financial operating manuals (SOP)

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The manual is designed considering:

  • Study of flow of each type of transaction errors and those relevant controls that provide reasonable assurance that errors are either prevented or detected and corrected.
  • Test of controls for determining their effectiveness- whether they are responsive to the inherent risk factors. We also consider the potential impact of inherent risk factors at the application control objective level.
  • Consider the policies and procedures regarding authorization, the safeguarding of transactions and their accountability. Adequate segregation of duties reduce the likelihood that errors (intentional or accidental) will remain undetected.

Manual includes:

• Flow chart to provide easy understandable representation of the flow of transactions through both the manual and the automated portions of the accounting function.

• Narrative outlining the sequential flow of documents and information. Core areas of concentration for application of standard procedures includes

• Purchase

• Sales

• Manufacturing

• Inventory

• Management information System

• Periodical closing of financial statements

• Working capital management

• Capital expenditure proposal processing and capitalization of fixed assets.

• Broad Human resource policies and procedures