Here's how you can apply strategic thinking for effective financial decision making.

I learned two rules on first day of finance class. 1) More money is better than less. 2) Money sooner is better than money later. Honestly, that’s all you need to know!

• outline the principles that are involved in applying an effective risk-based approach to assurance activities that support the validity, accuracy and completeness of the accounts and balances reported in the entity’s financial statements • support the effective implementation and supervision of a risk-based assurance framework by focusing on risks and mitigation measures • support the development of a common understanding of what a risk-based reconciliation and analysis process entails, and • formalise a risk-based policy for assessing financial statement risk, reconciling and analysing all balances and accounts, to reduce the risk of material misstatement, restatements and systemic internal control issues.

Use analytical methods to surface critical pieces of data that drive key decisions. The 3-statement model is a great example of a core set of financial reports that can be used in concert to make major organizational decisions. Uncovering insights starts with a base-level understanding of the data and being able to interpret historical trends from it. Once you have this down, you can then begin to build advanced financial analytics capabilities on top of a strong foundation to gather additional insights.

Consider scenario modeling, sensitivity analysis, Monte Carlo simulation, and stress testing to explore options. Evaluate distinct options with scenario modeling by changing multiple variables across scenarios, which may rely on narratives. Provide sensitivity analysis for detailed insights into how a single variable (or very few variables) affects outcomes. Estimate the probability of outcomes with Monte Carlo simulations, which use random sampling and statistical modeling to assess uncertainty. Use stress testing to evaluate the impact of extreme conditions for hypothetical scenarios.

All financial decisions must be deeply rooted in strategy. Finance without strategy is merely numbers, and strategy without finance is merely dreaming. The two are intertwined and both are essential for sound decision-making. Aligning on strategic direction provides the necessary framework to make informed financial choices. Strategy offers the vision and goals, while finance offers the means to achieve them. Together, they create a roadmap for sustainable growth and success. Without this alignment, financial decisions lack purpose, and strategic plans remain unexecuted fantasies.

An effective system of internal control helps prevent material misstatements, errors and fraud. The entity should adopt best practices that control system access, security, procurement, payment of invoices, receipting and segregation of duties. In addition, the entity should adopt a risk-based manual control framework to prevent material errors going undetected and incorrect financial information being reported. This includes: ·      journals being prepared and reviewed by two separate officers prior to posting ·      processing the reversal of all accrual journals at the beginning of each month and re-accrual, as appropriate . establishing a hierarchy of journal endorsement.

To apply strategic thinking for effective financial decision making. You should implement the following 1- Shift your mind from historical to future, from recording data to analysing data and from data to insights. 2- Communicate effectively with the Cross functional team by shifting from back office tasks to collaborate and communicate. 3- Develop Senario and Sensitivity analysis in your models to see all potential outcomes. 4- As a finance professional you act as a finance business partners in your organisation so you should aligned all your decisions with your organisation strategy. 5- as a finance professional you are the decision maker in your organisation so you should always one step ahead and take actionable proccedger.