Internal controls play a fundamental role in the effective management and protection of an organization’s assets. They are the procedures, policies and practices implemented to ensure that business operations are conducted efficiently, transparently and in compliance with regulations and internal policies.

The main objective of implementing an adequate Internal Control System is to perpetuate business and ensure that the company achieves its operational and strategic objectives through:

Standardization of internal procedures: well-defined and standardized procedures do not allow for individual interpretations and perpetuate knowledge.

Lower incidence of errors and fraud: this makes it possible to identify weaknesses in processes that expose the company to the risk of fraud.

Confidence on the part of investors, increasing the value of the company: the Internal Control system is an important pillar of Corporate Governance. The higher the level of maturity of a company’s controls, the greater the level of trust from investors and other stakeholders.

Safeguarding the company’s assets: this makes it possible to identify weaknesses in processes that expose the company to the risk of financial losses.

Definition of responsibilities and authority: an adequate system of internal controls allows any conflicts of interest and lack of segregation of roles to be identified and corrected.

Below are some of the measures to be adopted to build an effective Internal Control System:

• map vulnerabilities and risks;

• review and formalize processes and activities;

• draw up the internal controls matrix;

• review access levels and information security;

• automate and integrate processes;

• train the organization’s professionals;

• continuously improve the processes carried out; and

• adapt the strategy to the business/market reality.

PP&C’s work methodology covers all these items and contributes effectively and quickly to the evolution of maturity and improvement in Internal Controls in organizations.