Process_ Controls

 The financial statements told one story… but the processes told another.

During an audit, everything balanced perfectly — revenue matched invoices, expenses reconciled, and the trial balance tied up. But one critical gap stood out: all vendor payments were processed by a single individual without independent review. The numbers looked fine, but the risk of fraud or error was very significant and real. This experience reminded that internal controls are the backbone of trustworthy financial reporting. They don’t just protect balances — they protect the business itself. 💡 Here’s what effective controls should look like: ✔ Preventive controls → segregation of duties, approval hierarchies, access restrictions. ✔ Detective controls → reconciliations, independent reviews, exception reports. ✔ Corrective controls → escalation procedures, timely adjustments, audit trails. For auditors, evaluating controls isn’t a checklist exercise. It’s about: ❗ Testing if approvals are real or just “stamps.” ❗ Checking whether segregation of duties exists in practice, not only on paper. ❗ Assessing IT access rights — who can enter, change, or delete transactions. Takeaway: A clean trial balance doesn’t guarantee a clean process. Strong internal controls create confidence — for auditors, management, investors, and regulators alike