METHODOLOGICAL APPROACHES TO THE FORMATION OF AN INTERNAL CONTROL SYSTEM OF ENTERPRISES

Abstract

The article considers methodical approaches to formation of the internal control system of enterprises with consideration of modern challenges of risk management. It considers problems of introduction of effective internal control in modern economic conditions. The research works of domestic researchers in the field of internal control and audit are analysed. It is determined that an effective system of internal control contributes to improving the quality of management decisions, preventing risks and abuses. The article is devoted to the study of methodological approaches to the formation of the internal control system of enterprises. The main focus is on the COSO Internal Control - Integrated Framework as an internationally recognised risk management standard. Five methodological approaches are allocated: systemic, process, risk-oriented, regulatory and technological. The study complements the methodological approaches (organisational, regulatory, diagnostic, informational), presents their comparative characteristics, identifies their advantages and disadvantages. It has been established that the most effective approach is a combined approach that combines risk-based, process and organisational methods. This approach allows integrating control into business processes, identifying risks at different levels of management and minimising negative impacts. The article explored the relationship between the COSO Internal Control – Integrated Framework model and International Standards on Auditing (ISA), in particular ISA 315, ISA 330 and ISA 220, which regulate risk assessment and auditor response procedures. The proposed methodological approaches to the internal control system have been shown to be both complex and versatile, and to take account of the requirements of the audit. The key advantages of the integrated control system have been identified as follows: increasing the transparency of financial reporting, minimising economic risks, improving accounting procedures and forming an effective management strategy. The paper focuses on the role of internal control as a strategic tool for ensuring financial stability, economic security and long-term development of enterprises in the current market economy.