Management Control and Adequate Organisational, Administrative and Accounting Arrangementsonitoring and Early Detection of Financial Imbalances
We assist companies in designing and assessing management control systems and adequate organisational, administrative and accounting arrangements, proportionate to the nature, size and complexity of the business. The objective is to provide directors with timely and reliable information to support decision-making, monitor business performance and identify potential economic, financial and balance-sheet imbalances at an early stage.
Article 2086 of the Italian Civil Code requires businesses operating in corporate or collective form to establish organisational, administrative and accounting arrangements appropriate to the nature and size of the business, including for the timely identification of business distress and loss of going-concern prospects. The system should therefore enable directors to understand business performance, assess future prospects and make decisions on the basis of reliable information.
Adequate arrangements, corporate governance and Legislative Decree No. 47/2026
Italian Legislative Decree No. 47 of 27 March 2026 has further strengthened the relationship between corporate governance, adequate organisational arrangements, information flows and control systems within Italian companies. The reform affects the rules governing management and corporate control and emphasises the importance of the information required by boards of directors, delegated directors and control bodies in performing their respective functions.
Adequate organisational arrangements should therefore not be regarded solely as a tool for preventing business distress. They are also a fundamental component of sound corporate organisation and governance: responsibilities, delegated powers, procedures, control systems, reporting and information flows should be consistent with one another and operate effectively in practice.
Management control and operational tools
Management control is not the same as adequate organisational arrangements, but it is one of the principal tools through which they can be implemented, as it transforms accounting and management data into information that supports business decisions.
In particular, we assist companies with:
- analysis and assessment of organisational, administrative and accounting arrangements;
- definition of responsibilities, delegated powers, procedures and information flows;
- analysis of internal control and risk management systems;
- preparation of profit-and-loss, balance-sheet and cash-flow budgets;
- periodic reporting, management dashboards and variance analysis;
- monitoring of revenues, margins, costs and key performance indicators;
- cash-flow planning and monitoring of the company’s financial position;
- forward-looking assessment of debt sustainability and going-concern prospects;
- identification of indicators designed to detect potential imbalances at an early stage;
- financial benchmarking and comparison with comparable companies.
The adequacy of organisational arrangements must be assessed in practice and in proportion to the characteristics of the individual company. For an SME, this does not mean introducing procedures designed for a large organisation, but identifying the controls, responsibilities, information and reporting flows that are genuinely necessary in light of the company’s activities, size, complexity and risks.
Comparisons with comparable companies may also complement internal analysis by assessing margins, financial structure and other performance indicators against an appropriate peer group.
Our work on management control and adequate organisational arrangements is integrated, where appropriate, with the Firm’s expertise in management consulting and corporate finance, competitive analysis and financial benchmarking, business distress and restructuring and statutory audit and corporate control bodies.
