Reliability of accounting and financial information

Abstract

Public institutions are responsible for complying with budgetary processes in accordance with each of their obligations, since this is the basis for the quality of spending and the responsibility of internal controls for the financial and accounting security of the institution. Internal control plays a preponderant role in public spending, and its compliance with the requirements demanded by State control entities such as the Comptroller's Office, the Bank Superintendency and other control entities. Internal control in Ecuadorian municipal accounting is a fundamental mechanism for guaranteeing transparency, efficiency and effectiveness in the management of public resources. By establishing a sound internal control system, municipal decentralized autonomous governments (GAD) can prevent irregularities, fraud and accounting errors, as well as ensure the reliability of financial information. There are five necessary elements given the importance of internal control in the municipal context: transparency, which allows citizens and control bodies to know the destination of public resources and verify that they are being used appropriately; accountability of public officials to citizens and control bodies; prevention of risks that may affect the municipality's financial management; improvement of management, which contributes to optimizing accounting and administrative processes, increasing efficiency and effectiveness in municipal management; and compliance with accounting and legal standards applicable to municipal governments.