BUSİNESS MANAGEMENT

In an “effective” internal control system, five components work to support the achievement of an entity’s mission, strategies, and related business objectives which are: control environment; risk assessment; control activities; information and communication; and monitoring.

The internal control system designed by companies for the purpose of efficient and effective business processes, reliable financial reporting, and compliance with rules and regulations are assessed through internal audit activities.

The internal audit examines the adequacy and effectiveness of internal controls and makes recommendations where control improvements are needed.

Concurrent Control - Corrects problems as they happen

Feedback Control - Corrects problems after they occur

Tactical control is the assessment and regulation of the day-to-day functions of the organization and its major units during the implementation of its strategies.

Operational control regulates the activities or methods an organization uses to produce the goods and services it supplies to its customers.

The Balanced Scorecard which is a management control system that enables organizations to clarify their vision and strategy and translate them into action.

The Balanced Scorecard balances traditional financial measures with operational measures.

The balanced scorecard is used primarily by top and upper-level managers.

• Behavioral controls involve the direct evaluation of managerial and employee decision making, not the results of managerial decisions.
• Behavior control is based on manager observation of employee actions to see whether the individual follows desired procedures and performs tasks as structured.
• Outcome control is based on monitoring and rewarding results, and managers might pay little attention to how results are obtained.
• With outcome control, managers don’t superviseemployees in thetraditional sense.

The operating budget is a set of budgets that forecast revenues and expenses such as sales revenue, cost of goods sold, and operating expenses.

The capital expenditures budget presents a company’s plan for projects and long-term assets such as purchases of property, plant equipment, and other long-term assets.

The financial budget lays out how an organization will acquire its cash and how it intends to use the cash.