LAWS OBLIGE
THE MANAGER MUST establish the entity’s internal control measures and ensure their application
The Law on Financial Accounting (Article 13, Part 1, Point 4) states that the manager must establish the entity’s internal control measures and ensure their application. Below we present the key benefits a company gains.
Accurate and Reliable Financial Data
Internal control reduces the likelihood of errors because data is checked at multiple stages. This ensures that financial statements are correct and reflect the company’s actual situation.
Prevention of Fraud and Misuse
Clear control mechanisms limit employees’ opportunities to perform unauthorized operations. Continuous monitoring allows quick detection of unusual actions or risky transactions.
Clear Allocation of Responsibilities
Each employee clearly understands their functions and the processes they are responsible for. This reduces confusion and enables more efficient problem-solving when issues arise.
Increased Operational Efficiency
Standardized processes and clear procedures make accounting tasks faster and eliminate unnecessary actions. This saves time and reduces administrative costs.
Compliance With Legal Requirements
Internal control helps ensure that all accounting processes comply with applicable standards and regulations. This reduces the risk of fines or other sanctions and makes auditors’ work easier.
According to Article 13 of the Law on Financial Accounting, the company’s manager is responsible for organizing accounting.
If the company does not have approved description of internal control measures, it risks having its accounting deemed improper, and the manager may face fines under the Administrative Offences Code:
Article 99 – from €300 to €6,000
Article 100 – from €300 to €1,450
Article 205 – from €40 to €20,000
Article 206 – from €200 to €3,000
Article 223 – from €600 to €6,000
