Lecture N 9

Lecture N 8

Kinds of financial control

F I n a n c I a l co n t r o l
Nation- wide	Public
State	Departmental	The control of public organizations, trade-union, party, mass movements, scientific and technical, cultural- educational, sports, creative, veteran, various funds
External	Internal	Inside-departmental
The parliamentary(deputy) control
A U D I T I N G C O N T R O L

“Basis of functioning of finance of enterprises and organizations”

Finance of enterprises and organizations represents economic relations connected with creation, distribution and use of money incomes, accumulation, both funds by manufacture and realization of products and services.

Relations in sphere of finance:

Ø Between the state and enterprises in making payments in the state budget, off-budget funds, etc.

Ø Between the enterprises and credit system on crediting and payment of interests

Ø Between the enterprises and their higher organizations at redistribution of incomes, funds, on rent payments

Ø Between the different enterprises in the relation on payment of raw material, fuel, intermediary operations, ready production, services.

Ø Between the enterprises and insurance bodies on insurance of property, personnel insurance.

Ø Between the enterprises and organizations at release both realization of shares and others securities, at mutual crediting and creation of joint ventures.

Ø Between the owners and hired workers- on payments of work, material encouragements, at issues of shares and payments of dividends on them.

Ø Inside the enterprises and organizations in connection with formation and use target funds- authorized, consumption, accumulation, reserve, currency, repair or their possible modifications.

Ø Between the basic activity of enterprises and own capital construction.

“Finance of commercial enterprises and organizations”

The purpose of commercial activity is the reception of income.

The basic principles of organization of finance of commercial enterprises and organizations are:

1. Cost accounting.

2. The principle of planned character.

3. The principle of equality of all forms of ownership

4. The presence of financial reserves.

Financial funds- money resources intended for definite purpose.

Most important are the following funds:

Ø Statutory fund

Ø Fund of accumulation

Ø Fund of consumption

Ø Fund of payment of work

Ø Reserve fund

Ø Currency fund

Ø Repair fund

Production assets (industrial capital) are divided into:

1. Basic
2. Circulating

The results of financial- economic activity of enterprises are reflected in the appropriate report- Income Statement.

Financial management – is a control system of the mechanism of movement of money flows of the managing subject with the purpose of effective use, all means of the enterprise.

The financial managers activities can be related to the firm’s basic financial statements.

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