Internal control system
(ICS) organization effectiveness analysis

From 1 January 2013, according to Art. 19 of the Federal Law No.402-FZ “On Accounting” dated 6 December 2011, all economic entities must carry out internal controls of economic activities performed, and those subject to mandatory audit must also carry out internal control of accounting and preparation of financial statements (except when the accounting responsibility is borne by the manager).

A well-organised internal control provides understanding of whether:

• Federal laws, resolutions and instructions of the Russian Government, regulations for residents of Russia, municipal regulations are observed by the institution.
• Orders and instructions of the institution manager are observed.
• Cash transactions of the institution are valid.
• Transactions comply with regulations, employees’ authorities, etc.

When analysing effectiveness of the internal control system, our experts first of all pay attention to the scale of the company and make recommendations on its organisation with reasonable amount of costs (full-time employees, consultants, outsourcing and programmes used).