Chapter 5. Corporate Policies Manual[1]


The corporate policies manual may include only a few policies tied to key control problems that the company has encountered in the past, or it can take the approach of providing policies for control over a wider range of functional areas on a prospective basis. Either approach works, though the latter can better assist in maintaining an acceptable degree of corporate risk management, and is recommended.

The following list of corporate policies and explanatory comments covers a broad range of areas, including cash, hedges, barter transactions, inventory valuation, intangible assets, research and development costs, investments, debt extinguishment, warrants, lease terminations, dividends, options, and foreign currency translations. Though not all will apply to any company’s specific circumstances, a number of them can be copied directly into one’s corporate policy manual, depending on the structure of the company and its manner of doing business.

  • Accounts Payable

    • When paying from a copy of a supplier invoice, the additional approval of the controller must be obtained prior to paymentThis policy reduces the risk of duplicate payment.

    • There shall be a standard naming convention to create supplier names in the vendor master fileThis policy reduces the incidence of multiple records for the same supplier.

  • Billing

    • The billing and collection functions shall be segregatedThis policy makes it more difficult for collections personnel to intercept ...

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