AUDIT OF FINANCIAL

Audit Management
MANAGEMENT Chapter 8
AUDIT OF FINANCIAL
MANAGEMENT

DEFINITION OF AUDIT
FINANCIAL MANAGEMENT
Financial management audit is an
analysis and assessment carried out
systematically, periodically, and
documented on decision making as
well as all policies in managing the
company's financial resources.
OBJECTIVES AND BENEFITS OF
AUDIT
OBJECTIVES
1. Assess the accuracy of strategies and financial policies set by the company.
2. Assess whether financial regulatory documentation, monitoring and
management reporting are adequate as important elements in the financial
management framework.
3. Assess economization, efficiency and effectiveness of corporate financial
governance.

BENEFITS
1. Description of economization. Efficiency and effectiveness of the company's
current financial governance.
2. Deficiencies that still need improvement in the company's financial governance.
3. Feedback is obtained to prevent losses due to poor corporate financial
management.
AUDIT OF FINANCIAL
MANAGEMENT

SCOPE OF AUDIT

1. The accuracy of financial management organization

positions.
2. Determination of duties, authority, and responsibility for
each financial function.
3. Procedures and guidelines for corporate financial
governance.
4. Corporate financial management governance.
 AUDIT OF FINANCIAL MANAGEMENT
GOALS AND FUNCTIONS OF FINANCIAL MANAGEMENT

1 3
Get the right funds in Increase profitability
sufficient quantities

2 4
Proper use of funds Maximizing company
value
AUDIT OF FINANCIAL
MANAGEMENT AUDIT OF FINANCIAL
MANAGEMENT
ORGANIZATIONS
An organizational unit
relates to an overall
organizational unit, such
as a department, branch
or subsidiary.
AUDIT OF FINANCIAL
MANAGEMENT
AUDIT OF INVESTMENT DECISIONS
1. Net investment amount incurred
2. The potential profits (net operating cash inflows) obtained
3. Investment time period to generate profits (economic age of
investment)
4. Capital recovery at the end of investment age (final value)
AUDIT OF OPERATION DECISIONS
1. Prepare monthly financial statements, use to analyze performance and
compare businesses with industry averages
2. Understand the benefits that can be obtained from each item and / service sold.
3. Concentration on increasing sales is very profitable for goods and / services
4. Don't give discounts on products with low margins
AUDIT OF FINANCIAL
MANAGEMENT
OPTIMAL AMOUNT OF CURRENT ASSETS
1. Output Level Achieved
2. Expected ROI Profit Level

CASH MANAGEMENT
Cash management involves managing
effectively and efficiently the sources and uses
of cash.
 AUDIT OF FINANCIAL
MANAGEMENT
RECEIVABLE MANAGEMENT
1. Perform regular communication with customers, especially customers who
have debt to the company
2. Create an age analysis of accounts receivable
3. Negotiate periodic payments if this can help to settle receivables from
customers that are due
4. Before giving credit sales to customers, do a credit analysis and agree on
the right time period for granting credit for sales.

INVENTORY MANAGEMENT
1. Every purchase must be based on a request from the sales unit
2. Determine the maximum and above the minimum inventory
3. Maintain the right amount of inventory to secure supplies to customers
4. Inventory identification includes slow moving and dead stock categories, try
to sell even at prices below normal prices.
AUDIT OF FUNDING DECISIONS
FUNDING POLICY
Funding policy relates to the selection of the
most economical funding source (the smallest
capital cost of various alternatives) to meet the
funding needs of the company, both for
operating and investment activities.

FUNDING NEEDS
In general, funding needs for companies can be
grouped into two, namely 1) short-term funding
needs to meet operational needs (company
working capital), and 2) long-term funding
needs (investment) for company development.
AUDIT OF FINANCIAL
MANAGEMENT
AUDIT AT DIVIDEND
POLICY
1.Level of stock liquidity
2.Expansion plan
3.Provisions that limit
dividend distribution
Thank you!
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