Letters with Recommendations for the Improvement of Internal Controls Issued by the External Audit

The positive advance in the standardization of accounting guidelines in Brazil, in particular the harmonization of Brazilian standards with international ones, including IFRS and IPSAS, has brought valuable eminently accounting guidelines, but has also provoked a new behavior on the part of professionals who work directly in accounting and in all of which generate events that turn into accounting events. In this context, the existence of internal controls is essential for the implementation of controls, routines and practices, including accounting practices, that produce complete, timely and reliable information.

Organizations are always in transformation and pressured for results in every way, but postponing actions to implement improvements or better practices of internal controls, which mainly simplify the lives of people and the entities themselves, can be more expensive and cruel for everyone, because people will continue to have no time to move forward and improve their lives, and organizations will continue to incur unnecessary costs and inefficiencies of all kinds.

In addition to the guidelines in the accounting standards that indicate the need for formalized understandings of the accounting practices adopted by organizations, the Securities and Exchange Commission - CVM, through circular letters, has been reinforcing the guidelines in the same direction and providing guidance on the preparation of financial statements. accounting and have been considered an effective instrument to safeguard the quality of information disseminated in the market.

Ibracon – Instituto dos Auditores Independentes do Brasil issued Circular nº. 02/2016 with guidelines on the issuance by the external audit of letters with recommendations for the improvement of internal controls in entities registered with the Securities and Exchange Commission (CVM). It is important to point out that the Company's Management and those responsible for its Corporate Governance have the primary responsibility for the evaluation of accounting and control issues, and the Independent Auditors are responsible for scrutinizing them with all the usual zeal, skepticism and responsibility with which they exercise their activity.

Sometimes, despite the guidelines in the standards, by entities such as the CVM and IBRACON, as well as by the external audit, in addition to the perception of organizations that organized controls and processes are necessary to reduce costs, have efficiency and have a quality environment of information, including agility and timeliness, there seems to be a lack of perception of the benefits of additional efforts in investing to improve and reap the positive results almost simultaneously. In this sense, it is necessary to have the courage and vision to set priorities to organize the house and reap the benefits. Structuring a task force to act and resolve in a structured and objective way can be the solution, either by shifting internal resources within organizations or by hiring specialists to solve deficiencies.  

In times of greater pressure, such as in economic crises that affect everyone, the environment requires seeking greater efficiency in organizations, thus becoming moments of more opportunities to optimize information flows, whether exchanging, customizing or eliminating barriers and obstacles that inhibit efficiencies. of any order. Reinventing and innovating can be the solution to old problems and generate new opportunities, as it is always necessary to adapt to new times and generate new opportunities. Acting on the three main pillars of organizational structures is key to new times: technology, people and processes. It is not enough to have state-of-the-art technology if you do not have qualified people and vice versa, and it is not enough to have qualified people and state-of-the-art technology and not have structured internal control processes. It is necessary to establish a balance point of the three pillars in order to achieve the best results, be they in the professional satisfaction of people and in the economic and financial results that are produced.