Financial Risk Management & Internal Control:

Financial Risk Management & Internal Control:

                There are two audit teams one is known as internal audit team and the other one is called as external audit team. Everyone knows that the financial investment of every business is the backbone of its future progress. That’s the reason every business company have a proper and very well dynamic management system which helps them to make a internal control system to efficiently and effectively run the business operations and reduce the all kinds of risks which are harmful for their business operations.

The Business board of directors their managers and team supervisor are responsible to keep the environment very clean and transparent for the business operations and act smartly to reduce the risk and manage it in a professional way to improve the perfection in their workings. That’s the reason the business director gives more importance to the internal control and they make the internal audit committees to check the business operations and manage the financialrisks in the favor of business.

The Internal auditcommittee has the responsible committee about the business costing and about its benefits in the business operations. They are responsible to indicate the weak portions of the business and financial and non-financial risk related to these areas of the business. The risk can be quantified through the modern business techniques and effective business management tools. Like many business organizations has risk management software’s which helps them to manage the risks related to their business operations with the passage of time. But that all require a very efficient and effective responsible internal control management system in which there is a very progressive attitude and action exist.

The organizational structure and policies its objectives, goals, targets, vision, mission statement its managerial and leadership philosophy need a very gritty operation style. That’s the reason we see that the internal behavior and the internal audit committee roles has 100 percent effects over its internal control system.

According to the Gliem Book for CMA-USA professional management accountants about IMA’s –Institute of Management Accountants publication about internal control – Integrated Framework in 1992 the Committee of Sponsoring Organization of the Tread way Commission (COSO) "defined the internal control as providing reasonable assurance about the achievement of objectives in the areas of effective and efficiency of operations reliability of financial reporting, and compliance with applicable laws and regulation. But with the note that framework specifically cities reasonable, not absolute, assurance about the achievement of management’s objectives."

The Internal Control is very important for managing business financial risk that’s the reason many stock exchanges in the world not allowing the business firms to  be list with them if they not has the internal audit committee which working make able the external audit committees and teams to work independently and efficiently.