External control – What is it, definition and concept

External control is the diligence by which all types of organizations have outside participation in their control processes, or some type of independent supervision or monitoring.

That is, external control consists of the development of the management stage known as control. This, by professionals not belonging to the organization who will provide the point of view of a third party not committed to the entity.

In other words, professionals of external and independent origin are those who assume decision-making and the supervision of production processes typical of said phase (control) of administrative management.

The decision to outsource or transfer this power abroad usually comes from the company itself. Sometimes professionals or financial controllers are required to deal with this task.

Alternatively, there are also existing official supervisory or regulatory controls in the public sector.

Relevance of external control

The need for external type control elements is often attributable to large companies, especially.

As companies experience growth and the adoption of higher volume processes, they need better monitoring of their resources and assets.

An application of this type of control by third parties is the performance of audits of external origin within the scope of the private sector.

Another very widespread modality is the outsourcing of quality control processes in companies in the food sector, for example.

Main features of external control

Control, as a production process, can focus on aspects such as administrative control, strategic control, management control or operational control.

Taking into account the above, (external control) is conceptually the opposite alternative to internal control. The latter refers to the practice of self-regulation in companies and institutions.

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In this sense, regardless of the field in which it is developed, external control has a series of characteristics to highlight:

  • Outsourcing: Carried out by professionals outside the organization.
  • Training and specialization: The execution of external control processes requires specialized professionals for each task.
  • Non-exclusion: The management of external control does not mean the elimination of internal control processes. That is to say, both modalities can coexist in the economic day to day.
  • Efficiency: Resorting to external control of processes often responds to the need to improve the efficiency ratios of an organization.
  • Normative compliance. There are external control mechanisms that favor regulatory compliance and the law in economic matters. For example, this is the case of the Court of Auditors.

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