IMPROVEMENT OF THE ORGANIZATION AND METHODOLOGY OF INTERNAL FINANCIAL AUDIT IN THE CONDITIONS OF MODERN CHALLENGES

Abstract

The article examines the theoretical and practical aspects of improving the organization and methodology of internal financial audit in the context of modern challenges. It is determined that under conditions of economic instability, digitalization of business processes, increasing financial risks, and growing requirements for financial transparency, the role of internal audit as an effective management tool is significantly increasing. The current state of internal financial audit organization is analyzed, key problems are identified, and the need for their solution is substantiated. The improvement of organizational principles of internal audit is proposed through the development and implementation of the Regulation “On Internal Audit at Domestic Enterprises”, which will ensure the unification of methodological approaches, standardization of audit procedures, and enhancement of the institutional framework for internal audit functioning. The implementation of such a regulation will contribute not only to increasing the efficiency of enterprise activities, but also to strengthening transparency, accountability, and trust among stakeholders, including investors and regulatory authorities. A comprehensive methodological approach to conducting internal financial audits of financial statements of structural divisions is developed. This approach is based on the application of cross-checking procedures, analytical comparisons, and the systematic use of auditors’ working documents, which enables the identification of inconsistencies, prevention of errors, and improvement of the reliability of financial information. In addition, the proposed methodology includes the verification of intercompany transactions, assessment of compliance with accounting policies, and evaluation of the consistency between financial reporting and accounting registers. It is proved that the implementation of an effective internal financial audit system contributes to improving the reliability and completeness of financial reporting, optimizing the use of financial and material resources, strengthening financial discipline, and minimizing operational and financial risks. Furthermore, internal audit enhances the quality of management decision-making by providing timely, relevant, and reliable information for analysis and planning. The expediency of reflecting the activities of the internal audit service in the accounting system is substantiated, as it allows for a comprehensive assessment of the costs associated with maintaining the audit function and determining its economic efficiency. This approach also facilitates the evaluation of the value added by internal audit, supports performance measurement, and ensures better integration of audit results into the overall enterprise management system.