Financial Control Lecture Revision

This set of vocabulary flashcards covers essential terms, principles, and institutions of financial control, encompassing types of feedback, elements of control systems, and time-based forms of control as discussed in the lecture notes.

Negative Feedback

Corrective measures to adjust the behavior of the managed.

Positive Feedback

Corrective measures to adjust the perceptions of the managers.

Significant Deviations

Material deviations defined by limits for all parameters within the control function.

Financial Control (FC)

The control over activities, processes, and operations related to the generation of revenues and the incurrence of expenditures of monetary funds.

Triple Constraint (Project Management Triangle)

A balancing framework for project management consisting of Time (schedule and deadlines), Cost (budget and financial resources), and Quality (required standards and deliverables).

National Revenue Agency (NRA)

The Bulgarian revenue authority responsible for exercising tax control.

Bulgarian National Audit Office (BNAO)

The institution responsible for exercising budgetary control in the public sector.

Financial Supervision Commission (FSC)

The body responsible for financial supervision in the public sector.

Bulgarian National Bank (BNB)

The central bank responsible for exercising banking supervision.

Scope (of Control)

An element of the control system that defines controllable parameters and specifies which financial activities, processes, or resources are monitored.

Object (of Control)

The entities or social actors associated with controllable parameters who are being controlled.

Subject (of Control)

The controlling body or institution that carries out financial oversight and exerts control.

Toolkit (Instruments)

The principles, procedures, and methods employed to implement control, such as operational mechanisms and standards.

Legality Control

Control covering compliance with EU regulations, national laws (statutes), secondary legislation (ordinances and decrees), and organizational internal rules.

Preliminary Control (ex ante)

Control carried out during the preparation stage, often having an authorizing character, which accounts for approximately $60\%$ of control efforts.

Ongoing Control (concurrent)

Control carried out concurrently with active processes, permitting adjustments before results are finalized, accounting for approximately $30\%$ of control efforts.

Subsequent Control (ex post)

Control applied after the completion of processes when results are available, accounting for approximately $10\%$ of control efforts.

Expediency

The quality of being suitable, practical, or appropriate for achieving a specific objective with efficiency and effectiveness.

Expense Accruals

Adjustments made in management accounting to recognize expenses in the period in which they are incurred, regardless of when cash payment is made.

Temporary Tax Differences

Differences between accounting profit and taxable profit that will reverse in future periods, such as those arising from depreciation methods or provisions.

Permanent Tax Differences

Differences between accounting profit and taxable profit that will not reverse in future periods, such as non-deductible expenses or tax-exempt income.

Tax Revision (Full Tax Audit)

A manifestation of subsequent state control executed by NRA agents involving material and documentation counterchecks and inventories.

Inspection

A form of subsequent financial control involving direct contact between the subject and object to verify compliance, common in banking supervision.

Study (Modern Form)

A comprehensive approach to examine, analyze, and evaluate facts from a specific, relatively short-term process according to a designed program.

Observation (Monitoring)

A long-term form of control for the systematic and continuous study of processes to track the recurrence and intensity of deviations.

Systematic Control

A form of control monitoring the implementation of a managerial decision at all stages at periodic intervals to ensure quality and accuracy.

Strategic Control

Long-term control applied to reach strategic objectives of the national economy, involving strategic plans for $3\text{-}4\,\text{years}$ and operational plans for $1\,\text{year}$.

Diagnostic Control

A form of control used to identify what went wrong and why through factor-based or differential diagnostics.

Prognostic Control

A form of control that uses the past and present of a system to forecast future behavior, answering what could go wrong in the future and why.