Arnon Dror is a name to reckon with in the world of global finance and business. This Hebrew University MBA graduate has more than 20 years of valuable experience under the belt. During this period, he has been able to discharge the office of Vice-President many times. However, Arnon Dror has the honor of occupying this important position in a number of companies. US channel group, Scitex, Creo Americas, Kodak, Creo Inc. and Presstek are some of these organizations. The officials of these establishments are very grateful for his services. They say he is responsible for improving the fortunes of their concerns. Many of them even regard as an expert in many diverse areas. These include corporate reconstruction, business mergers, internal control, international taxation, cash flow management, ERP integration, and financial planning.
Arnon Dror – Why do entrepreneurs need to implement suitable internal controls?
This financial expert says introducing and implementing internal controls is critical to the success of any business. Entrepreneurs are aware of the detrimental effect frauds can have on the finances of their concerns. People who indulge in such nefarious activities can erode their profits over time. They need to take necessary action to ensure they don’t have to face such a situation. Moreover, these businessmen have to prepare their accounts according to compliance guidelines the regulatory authorities prescribe. Otherwise, they end up breaking the law. On top of this, they need to record information relating to all their commercial activities accurately. Otherwise, they won’t be able to take correct decisions. This is where internal controls come into the picture.
This specialist states the following 3 important reasons why entrepreneurs need to implement suitable internal controls:
Protecting valuable financial assets
Entrepreneurs build up and accumulate their financial assets over time. They obviously want to take necessary measure to protect them frauds, misappropriation, collusion, and thefts. Implementing internal controls in the form of segregation of duties help them to achieve this objective. They should allow one of their staff members to authorize, record and authenticate all commercial expenditures. Different individuals should be responsible for carrying out such a task. Even then another person to scrutinize their work.
Proper recording of all financial data and events
Businessmen need to ensure proper recording of all commercial transactions in their books of account. This is because, without this information, they won’t be able to take important decisions. It’s a situation which these proprietors want to avoid at all costs. However, introducing and implementing proper internal controls ensure this doesn’t happen. This is one aspect which they can’t afford to overlook.
Entrepreneurs, all the decisions they make regarding their business finances carry potential risks. However, businessmen endeavor to do whatever they can to minimize such potential losses. This happens when they agree to invest in a risky venture or acquire a new asset. Such a situation can also arise when they try to exploit a previously unknown market. Ensuring the proper implementation of internal controls minimizes such risks to a large extent.
Arnon Dror says the implementation of appropriate internal controls is a necessity for entrepreneurs. It isn’t a luxury. The above 3 important reasons to take this step proves this fact beyond any reasonable doubt. It helps them to maintain their competitive edge in the market.