ABSTRACT

For larger companies, and certainly for large multinational groups, the business of liquidity management normally forms part of the treasury department which ought to have suitably experienced and qualified staff. For all companies there will need to be an agreement on how the staff are to be monitored and evaluated and also how much delegated decision-taking will take place. Treasury policy will establish major financial parameters like gearing level, distribution policy, interest cover and the level of risk to be accepted. The association of corporate treasurers issued the guidance note to its members to assist them in their dealings with the financial markets. It is designed to illustrate the key control features that should be in place. Treasury procedures are designed so that any error can be readily identified and resolved. In practice, much of the risk in treasury occurs through dealing. Staff who deals should have no responsibility for processing accounting entries or for making settlements or reconciling.