Since most small business owners' background and primary focus are in their business and not in accounting, consultants play a key advisory role in helping a business design and implement sound internal controls.

There are several factors to consider when implementing good internal controls:
- Tone at the top / management
- Accounting system - segregation of duties, policies and procedures
- Financial statement accuracy, compliance and review

Tone at the top: Management's commitment to implementing internal controls sends a strong signal to the rest of the company. In any business, it all starts at the top.

If employees see ownership or management move towards good internal controls, they will follow. Also, we emphasize to our clients (the small business owner) not to be "too busy" to spend time to monitor their financials on a regular basis. That is one of the best ways to reduce the risk of fraud -- management involvement and oversight.

For more information on internal controls come back next month for the second half of this article.