Page 98 - Rižnar, Igor, and Klemen Kavčič (ed.). 2017. Connecting Higher Education Institutions with Small and Medium-Sized Enterprises. Koper: University of Primorska Press
P. 98
Tatjana Horvat and Franko Milost
‘The first category addresses an entity’s basic business objectives, in-
cluding performance and profitability goals and the safeguarding of re-
sources. The second relates to the preparation of reliable published fi-
nancial statements, including interim and condensed financial state-
ments and selected financial data derived from these statements, such
as earnings released and reported publicly. The third deals with com-
plying with those laws and regulations to which the entity is subject’
(Committee of Sponsoring Organizations of the Treadway Commission
2004, 1).
In providing assurance on these three areas, the internal auditor has
an important role. We will focus on internal auditor engagement and
internal auditor assignment, with which the internal auditor ensures
that the company performance is legal. Specifically, we will focus on one
part of the company, which is the financing of the business. We will
present the steps of the internal auditor assignment, to review whether
the corporate finance is legal, meaning that it is in accordance with the
laws and the external and internal rules of the financing company.
Financing
The financing of the company is one of the most important areas of the
company, since it must provide both short-term and long-term smooth
business operations. The financing of each company must be designed,
forward-looking and, of course, very carefully controlled. Directing the
management of cash flows in the company and its environment are cap-
tured in the financial policy (Filipič and Markovič-Hribernik 2000, 96–
97). Cash flows are planning with a financial plan which is more than a
one-year plan, these plans are daily, ten-days, month or several months
plans.
Due to the extent of the concept of financing, we have focused more
narrowly, mainly on the use of external funding sources (inflows from
financing):
• capital,
• long-term and short-term bank loans,
• credit lines,
• vista deposits,
• borrowing from suppliers and customers,
• leasing,
• factoring,
96
‘The first category addresses an entity’s basic business objectives, in-
cluding performance and profitability goals and the safeguarding of re-
sources. The second relates to the preparation of reliable published fi-
nancial statements, including interim and condensed financial state-
ments and selected financial data derived from these statements, such
as earnings released and reported publicly. The third deals with com-
plying with those laws and regulations to which the entity is subject’
(Committee of Sponsoring Organizations of the Treadway Commission
2004, 1).
In providing assurance on these three areas, the internal auditor has
an important role. We will focus on internal auditor engagement and
internal auditor assignment, with which the internal auditor ensures
that the company performance is legal. Specifically, we will focus on one
part of the company, which is the financing of the business. We will
present the steps of the internal auditor assignment, to review whether
the corporate finance is legal, meaning that it is in accordance with the
laws and the external and internal rules of the financing company.
Financing
The financing of the company is one of the most important areas of the
company, since it must provide both short-term and long-term smooth
business operations. The financing of each company must be designed,
forward-looking and, of course, very carefully controlled. Directing the
management of cash flows in the company and its environment are cap-
tured in the financial policy (Filipič and Markovič-Hribernik 2000, 96–
97). Cash flows are planning with a financial plan which is more than a
one-year plan, these plans are daily, ten-days, month or several months
plans.
Due to the extent of the concept of financing, we have focused more
narrowly, mainly on the use of external funding sources (inflows from
financing):
• capital,
• long-term and short-term bank loans,
• credit lines,
• vista deposits,
• borrowing from suppliers and customers,
• leasing,
• factoring,
96
