ASSESSING FINANCIAL CONTROL SYSTEMS - METRICS AND TOOLS FOR EVALUATION

Abstract

This article explores the critical role of financial control systems within corporate governance, emphasizing their significance in enhancing organizational success and mitigating risk. By presenting a structured six-step process accompanied by foundational performance metrics and comprehensive evaluation tools, the article delineates a methodological approach for appraising the efficacy of these systems. It addresses the design, monitoring, and coordination of financial activities, underscoring the strategic importance of continuous assessments to uphold management integrity and legal compliance. The narrative progresses from defining control objectives to identifying key activities and assessing control design, before evaluating effectiveness, identifying gaps, and implementing remedial actions. Additionally, the article elaborates on essential financial performance measures and management control metrics that finance professionals and organizational leaders should monitor to safeguard their financial systems. This contribution aims to furnish financial professionals and academic audiences with the insights necessary to evaluate and fortify financial control systems, thereby supporting sustainable organizational growth and financial stability.