Organizational chart:
The organizational chart of any organization consists of a number of jobs (or activities) or managerial levels which interact and cooperate with each other to achieve the objectives of the organization. The organizational chart demonstrates the job structure of the employees and has the following advantages:
- Identifying the organization's main and secondary departments and jobs
- Identifying the nature of relationship between different departments
- Identifying the relationship between employees within the same department, and employees working in different departments through the authorities granted to the heads of these departments who represent the connection between employees in departments, as well as exchanging documents between each others.
- Identifying levels and lines of authority (executive, managerial, supervisory, advisory) granted and executed in each managerial level in the organization.
- Identifying the distribution of employees in each department
- Re-classifying the employees’ jobs in the organization according to the departments and personnel shown in the organizational chart.
- Identifying levels of supervision, delegation of authority, and distributing them among different managerial levels within the organization chart and personnel working in these levels.
- Identifying the nature and size of managerial levels in the organization especially concerning the level of decision making:
Top management  strategic decisions (long term)
Middle management supervisory executive decisions
Low-level management decisions concerning executing actual tasks (short term)
Job descriptions:
The process of preparing detailed descriptions of employees’ authorities and duties has the following advantages:
- Determining the nature of main functions and activities of the organization’s departments and divisions.
- Determining employees’ duties and responsibilities including managers, supervisors, and executives.
- Identifying the relationship between responsibilities of employees working in the organization’s departments and divisions to ensure that there is no overlap of duties.
- Determining employees’ authorities and duties related to: leadership functions, supervisory and other executive activities and operations
Evaluation and classification of jobs and payroll:
Job evaluation is an attempt to implement the appropriate measurement basis to evaluate efforts exerted in different jobs within the company. The amount of salary received by the employee should be equal to the services performed based on the nature of the job, and its value without any consideration to the person doing the job.
The prevailing methods used in determining salaries depend on either experience, and qualifications or negotiations between employers and employees or the employees syndicate representing them. Although these methods seem democratic, they do not have a scientific base as they usually lead to wrong results in resolving wages problems in a way that damages the employer's or employee's interests, that’s why job evaluation process should be carried out according to the following stages:
- Verifying the validity of the administrative organization structure
- Performing detailed job analysis
- Preparing payroll scale
Documentary flow charts:
Documentary flow charts prepared by the auditor or system analyst aim at:
- Identifying the departments participating in a specific task or activity
- Collecting data about similar companies
- Identifying and organizing the procedures necessary for performing a specific function, process, or activity within the organization
- Identifying the relationship between different departments performing a specific task or activity
- Identifying the documents and records used in performing the procedures related to a specific function or activity
- Identifying the flow of documents between different departments
- Determining the distribution of original documents and their copies between departments which participate in performing a specific activity
The following is an example of documentary flow charts related to the main activities of the financial department in one of the industrial organizations:
- The documentary flow chart for posting an accounting entry
- The documentary flow chart for disbursement of cash
- The documentary flow chart for cash supply
- The documentary flow chart for issuing checks
- The documentary flow chart for receiving a check due today and collecting it from the bank
- The documentary flow chart for cancelling a check
- The documentary flow chart for disbursement of imprests ( temporary and permanent)
- The documentary flow chart for reconciling\ adjusting imprests
- The documentary flow chart for issuing sale invoice (cash\credit)
- The documentary flow chart for issuing credit notes (client account)
- The documentary flow chart for issuing debit note (client account)
- The documentary flow chart for preparing and sending the client’s statement of account
- The documentary flow chart for receiving notes receivable and sending them to the bank for collection
- The documentary flow chart for notes receivable returned by the bank
- The documentary flow chart for returning notes receivable to the client
- The documentary flow charts for documentary credits
- The documentary flow chart for issuing letters of guarantee
Documents:
Documents are considered one of the most important means of communication between different managerial levels and centers of activity within the organization, in addition to its supervisory role represented in identifying the employees responsible for preparing these documents and those who are responsible for approving them according to the authorities and financial delegations applied in the organization.
The availability of a comprehensive documentary group forms has the following advantages:
- Identifying the nature of activity\operation for which the documentary flow chart was designed
- Identifying the sequence of activities performed according to a specific procedure or task shown in the documentary flow chart
- Identifying the nature of procedure performed at each functional level for circulating the document, and different functional levels circulating the document during the documentary flow chart
- Providing a written material evidence of the actual existence of the organization’s operations
- Identifying the personnel in each department or division who are responsible for: preparing, approving, pricing, or recording the documents used in performing the organization’s multiple tasks and activities
- Used as a basis for recording the organization’s various operations, and in preparing financial and non-financial reports
Books and records:
Keeping a comprehensive group of books (financial and statistical), has the following advantages:
- It helps the organization in preparing annual financial statements, and interim financial positions
- It helps the organization in providing evidence concerning its transactions through the data included in these books and records (either financial, statistical, or managerial)
- It helps the organization in tracking the documents representing the organization’s transactions and activities through the data included in these books and records (either financial, statistical, or managerial)
- It helps the organization in preparing financial and non-financial reports for the purpose of making executive and investment decisions….etc
- Achieving objectives related to monitoring the organization’s various activities by comparing between actual and planned results
- Describing the life of a specific asset (ex: life of a fixed asset) and changes to that asset as a result of the organization’s activities during a specific period
Chart of accounts:
Includes a classification for all the organization’s accounts, a matter which has the following advantages:
- Identifying the type of accounts representing financial transactions currently carried out by the organization, as well as transactions expected to be carried out in the future (ex: possibility of using accounts receivable in the future or investment accounts as a result of expanding activities by adding new products or opening distribution units in new areas )
- Identifying the accounts that should be recorded in accounting books and records representing different activities and transactions of the organization
- Appropriately coding all the accounts of the organization to help in preparing trial balances, financial statements, notes, and the analytical attachments for these statements
- Obtaining financial, statistical, and managerial information to help top management and departments in the organization in making financial, selling, investment decisions….etc
- Preparing different indicators and trends related to the financial analysis of the organization’s operations or transactions
Financial and administrative manuals:
Financial manuals (purchases, sales, and warehouses), and administrative manuals (recruitment, firing, and wages) have the following advantages:
- Identifying and writing the main procedures and rules for performing all activities related to the work of the organization (purchases, production, warehouses, sales, financial and managerial….etc)
- Identifying ways for maintaining the organization’s funds and properties by obtaining insurance on the organization’s assets, cashiers, and store-keepers, as well as identifying the appropriate control procedures for buying and selling the assets of the organization
- Identifying financial authorities granted to each managerial level, and to employees in these levels as well as financial and administrative delegations related to performing all the organization’s activities
- Demonstrating employees’ duties and rights, a matter which helps these employees in achieving planned objectives so that they could be able to receive their share of annual profits, incentives, allowances, and bonuses
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