What do financial controls ensure in a business?

Financial controls are systems and processes implemented within a business to ensure accuracy in financial reporting and to safeguard the company’s assets from misuse or fraud. They involve establishing internal policies and procedures that help manage the financial activities of the organization effectively.

The primary function of these controls is to ensure that financial statements are accurate and comply with applicable standards, which is crucial for internal decision-making and for maintaining stakeholder trust. Financial controls also help in detecting any potential errors or fraudulent activities, thereby preventing misuse of the company's resources.

While maximizing profits, increasing sales revenue, and fostering employee accountability are important business goals, they are not the direct purpose of financial controls. Instead, strong financial controls create a foundation that supports these goals by ensuring that financial processes are reliable and transparent. This ultimately allows businesses to make informed decisions based on accurate financial data.