Internal Control

The concept of risk management is becoming an increasingly important factor of day-to-day business life, not just from a commercial perspective but also from a compliance point of view.

Effective risk management does not enable you to avoid risk - rather to manage it more effectively. Only by identifying risk areas, evaluating the threats they pose and introducing control procedures to protect against any impact they might have, can you hope to ensure the smooth day-to-day running of your business and protect the company against possible claims.

There are a number of areas that should be controlled including:

Information Technology - most companies have no IT security policy in place! If your business falls into this category you should undergo an immediate risk assessment evaluation of the threats, vulnerabilities and impacts to the business resulting from a breach of IT security. This will enable you to develop an effective information security and management policy.

Be alert to the risk the internet poses - from hackers, viruses, eavesdroppers, unauthorised users and fraudulent transactions - and install controls to protect against such threats. Anyone who has fallen victim to a virus will know the chaos it can cause. Install anti-virus software on every desktop and server and ensure it is regularly updated to monitor new and emerging viruses.

You should also be alert to any pirated or downloaded software being used by employees. The penalties for breach of licence can be high; so ensure that your staff fully understand their responsibilities and that you have sufficient licences to cover all users.

Statutory Obligations - Businesses face a series of statutory obligations including FSS, NI, VAT, Income Tax etc etc. All carry deadlines and failure to meet these deadlines can result in fines, penalties and interest charges. Establish controls to make sure that all returns are made on time and that all necessary information is submitted.

Fraud - Fraud can affect businesses of all sizes and, on a large scale, can be serious enough to bring a company down. It is important that safeguards are put in place to prevent fraud and, should it occur, to detect the problem early enough to limit the damage to the company's finances and its reputation.

Grant Thornton can help you to establish a wide range of controls to ensure the smooth running of your business.

We can undertake VAT and FSS health checks; highlight risk areas for fraud; and help ensure that your company is fully compliant with all its statutory obligations.

We can also review your IT procedures - not just for security purposes, but also to check the reliability of processing, the integrity of data, the integrity of programs and the proper development and implementation of systems.