Standard Financial Operating Procedure Manuals (SOP)

The manual is designed for the use of employees of various hierarchical levels in the organization. The manual provides specific guidance covering all phases of operational and the accounting function. The manual also deals with local reporting requirements and is thus specific to the client needs.

SOP is developed using risk Based assessment which has following benefits:

  • Inbuilt controls enable early detection of leakage impacting the cost and profitability.
  • In case of change in employees, it ensures uniformity in work and uninterrupted operations
The process of manual designing includes:

Studying the flow of each type of transaction errors and those relevant controls that provide reasonable assurance that errors are either prevented or detected and corrected.

Test of controls for determining their effectiveness i.e., whether controls are responsive to the inherent risk factors or not. We also consider the potential impact of inherent risk factors in control objective.

Considering the policies and procedures regarding authorization, safeguarding of transactions and their accountability. Adequate segregation of duties reduces the likelihood of errors (intentional or accidental) remaining undetected.

Manual includes:

  • Process flow diagrams to provide easy understandable representation of the flow of transactions through both manual and automated portions of the accounting function.
  • Narrative outline of the sequential flow of documents and information.
  • Core areas of concentration for application of standard procedures includes:
    • Purchase
    • Sales
    • Manufacturing
    • Inventory
    • Management information System
    • Periodical closing of financial statements
    • Working capital management
    • Capital expenditure proposal processing and capitalization of fixed assets.
    • Broad Human resource policies and procedures