By: Hossam Osman

Assistant Lecturer
Accounting Instructor
Internal Auditor
Financial Manager

(+2) 01011555378
 Document
A document serves as an official record that may
be for internal or external use.

Any document serves as an official record. Some documents, such as the

memorandum, are for internal use only. They are generally administrative
and reflect a company’s philosophy, approach, and activities. Other
documents ad hoc, such as the client e-mail, are for external use. They
convey information to and from the public domain and often help limit the
risks that this interaction with the public creates.
A process flow diagram and a policy document are typically internal
documents.
A contract between the buyer and seller of an asset or an investment
management agreement between a firm and a client are examples of
external documents.
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Organising is the objective of documentation that is fulfilled when
documents ensure thoroughness and consistency of action, thus allowing a
company to function more efficiently and effectively.

Documentation that protects a company provides

assurance of a system to safeguard interests and manage
risks.

A prescribed format for marketing materials used by an organisation

describes the level of standardisation, a characteristic used to classify
documentation. The level of standardisation determines whether a
document is standardised or ad hoc. Standardised documents have pre-
established formats, whereas ad hoc documents are free form.

An employee handbook that outlines travel reimbursement guidelines is an

associated document that employees would refer to in order to determine
which travel expenses may or may not be reimbursed. Procedure documents
are generally associated documents.
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 A policy document describes principles of
action adopted by a company. They are typically
driven from the top down, with rules cascading
down through the various business units and
functional areas of the company.
An internal document that provides a company’s mission, values, and
objectives from which actions should be derived is a policy.
Considering external standards for best practices for internal use within a
firm is best suited for initially drafting a policy document. The standards
adopted in the policy document will lead to procedure and process
documents to actually execute final objectives consistent with the policy.
A procedure document broadly identifies what
the company must do (actions that need to be
taken) to achieve a desired outcome. It often
provides a bridge between the activities that are
allowed at the policy level and what needs to
happen at the process level.
The written procedure for contracting with and the payment of a vendor is an
example of procedure documentation to help implement a process to
eventually generate a derived document.
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A process document describes the individual
steps the company must take, from start to
finish, to achieve a desired outcome.
A process document provides specific individual
steps to be taken to achieve a desired outcome.
It is more specific than a procedural document.

Policies broadly state the rules,

procedures help apply policies,
and processes divide procedures
into manageable actions.

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 Marketing documentation promotes and
positions the organisation’s products and services
to attract and retain clients, such as a prospectus
or a term sheet, is usually provided during the
marketing stage of the client investment cycle.
A document that advertises the investment services offered by a firm is
a marketing document that has the objective of communicating this
information to the public.

Client on-boarding documentation refers to

documentation required to accept a new client
and inputs the client’s details into its records to
enable the company to conduct transactions with
and on behalf of the client.
Before any client can transact with a firm and commence the relationship,
organisations have a legal obligation to verify the identity of the potential
client with a know-your-client (KYC) questionnaire.
Clients and potential clients can receive marketing documentation prior to
the on-boarding process.
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 Funding documentation refers to wire transfer
documentation. It means the cash transfer and
the investment of the money, such as a share
certificate which associated with an investment
transaction, usually occurs during the funding
stage of the client investment cycle.

Reporting documentation refers to the regular

communication between the firm and its client. In
the reporting stage of the client investment cycle,
the external document usually takes the form of a
statement, often provided by a third-party
custodian or administrator.

Redemption documentation is required when

a client wants to redeem or sell an investment.

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By: Hossam Osman (+2) 01011555378
Document management
A corporate document is written, printed, or
electronic matter that provides information or
evidence or that serves as an official record.

When using, developing, or reviewing a document, companies and

individuals should consider three factors: origin (source of the document),
direction, and level of standardisation.
The invoice received by a firm for contracted work from a consultant is an
example of an original document.
Maintaining a centralised repository, with appropriate access rights, helps
data retrieval. This repository is often electronic.
Documents cannot simply be archived and forgotten. Specific destruction or
disposal instructions should be applied to all archived information.
Companies have a responsibility to discard or destroy documentation after
the retention period.
Documents reporting activities regarding clients flow up to management.

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 In the context of the investment industry, that:

“Educates” documentation helps provide information or instructions.

“Records” documentation that help preserve corporate learning
(institutional memory).
“Protects” documentation that help provide assurance of the system to
safeguard interests and manage risks.
“Authorise” is the objective of a document when it designates a particular
person as being responsible for initiating a particular protocol.

Measure, record and protect

are all objectives of documentation.

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END of Chapter (20)

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