In Mexico, the life expectancy of businesses depends on the size of the company, according to INEGI, companies with an average of 0 to 2 workers die before the seventh year, while companies with 11 to 15 workers last. up to 15 years.
Why?
This is mostly because companies that are staffed or are larger, invest in their internal control.
But what is internal control?
Internal control has several meanings, but simply it is the set of actions, activities, plans, policies, norms, records, procedures, and methods, including the environment and attitudes developed by authorities and their personnel in charge, to prevent possible risks that affect a company.
As you will see, internal control establishes from the most basic, such as the mission and vision, to the strategies to follow for the evolution of the business.
The benefits of internal control are:
Reduce the risks of corruption
Achieve the established goals and objectives
Promote organizational development
Achieve greater efficiency, effectiveness and transparency in operations
Ensure compliance with the law
Protect company resources
Have reliable and timely information
Promote the practice of values
The procedure used by most companies, especially those that are publicly traded, is the COSO Model, which establishes 20 principles in 5 components.
Government and Culture | Strategy and Objectives | Performance | Review | Information, Communicati-on and Reporting |
The board of directors exercises oversight over risks Establishes operational structures Defines desired culture Demonstrates commitment to ethical values | Analyzes the business context Defines risk appetite Evaluates alternative strategies Formulates business objectives | Identifies risks Evaluates the severity of risks Prioritizes risks Implement risk responses Develop a risk portfolio | Evaluates substantive changes Reviews risks and performance Proposes improvements in enterprise risk management | Aprovecha la información y la tecnología
Comunica los riesgos de información
Informes sobre riesgos, cultura y desempeño |
These principles can be applied in all types of companies, whether small, medium or large.
Published on July 07th, 2020.
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