Subject. The article discusses theoretical and practical principles of internal control from the building stage to maintaining its effectiveness at a high level. Objectives. The aim is to examine various interpretations of internal control and internal control procedure concepts, detect difficulties of economic entities in developing, implementing, and managing the internal control, offer a model, enabling to systematize these processes through focusing on risk management of key business processes and harmonization of internal control procedures. Methods. The study rests on general methods of research, like logical analysis, generalization, grouping, and modeling. Statutory instruments in the sphere of financial and fiscal accounting and works by domestic authors serve as a theoretical framework for the study. Results. I analyze the internal control, considering the industry affiliation of economic actors. The interpretation of internal control concept is supplemented by a new element, i.e. ‘identification of key business processes’. The paper presents a matrix of internal control management, which is intended to mitigate risks inherent in key business processes. Conclusions. The said matrix may be used by any economic entity as a theoretical and methodological basis for building internal controls. The offered model and matrix enable to cover risk areas and mitigate significant risks, ensure the accuracy of financial reporting, and, as a result, sustainable development of economic entity.
Keywords: internal control system, internal controls, internal control procedure, economic mechanism, risk assessment
References:
Kakovkina T.V. [The Internal Control System as a Means of Identifying the Risks]. Mezhdunarodnyi bukhgalterskii uchet = International Accounting, 2014, no. 36, pp. 37–47. URL: Link (In Russ.)
Shlifer E.V. [Internal control system in accounting: Problems of concepts and terms]. Ekonomika i upravlenie: analiz tendentsii i perspektiv razvitiya, 2014, no. 16, pp. 117–122. URL: Link (In Russ.)
Batueva A.B. [System of internal control]. Molodoi uchenyi = Young Scientist, 2018, no. 16, pp. 148–150. URL: Link (In Russ.)
Shutova I.S. [The role and place of internal control determination in the commercial organization management system]. Simvol nauki = Symbol of Science, 2017, vol. 1, no. 2, pp. 128–130. URL: Link (In Russ.)
Dreving S.R., Khrustova L.E. [Modern Understanding of Internal Financial Control: Problems and Perspectives of Investigation]. Upravlencheskie nauki = Management Sciences, 2016, vol. 6, no. 3, pp. 30–44. URL: Link (In Russ.)
Borisova L.I. [The Ministry of Finance of the Russian Federation recommended to implement internal control]. Finansovye i bukhgalterskie konsul'tatsii, 2013, no. 11, pp. 3–7. (In Russ.) URL: Link
Smagina A.Yu. [Tax risks and methods of their minimization as an object of internal control in commercial organizations]. Vestnik NGIEI, 2016, no. 11, pp. 124–132. URL: Link (In Russ.)
Savenkov D.L., Savenkov L.D. [Specifics of interaction of internal control and budgeting in the management system and its strategic orientation]. Vestnik Samarskogo gosudarstvennogo universiteta putei soobshcheniya = Bulletin of Samara State University of Railway Transport, 2015, no. 2-1, pp. 66–72. (In Russ.)
Bakhtigozina E.I. [Assessing the System of Internal Control on the Basis of a Risk Map]. Vestnik Rossiiskogo ekonomicheskogo universiteta imeni G.V. Plekhanova, 2018, no. 4, pp. 64–68. (In Russ.) URL: Link
Inshakov O.V. Mekhanizm sotsial'no-rynochnoi transformatsii i ustoichivogo razvitiya APK Rossii: monografiya [The mechanism of social and market transformation and sustainable development of the agro-industrial complex of Russia]. Volgograd, Volgograd State University Publ., 1995, 450 p.
Borovitskaya M.V. [Internal Control System as an Element of Strategic Management Accounting]. Azimut nauchnykh issledovanii: ekonomika i upravlenie = Azimuth of Scientific Research: Economics and Administration, 2018, vol. 7, no. 1, pp. 61–65. URL: Link (In Russ.)
Zhukov V.N. [Methodological Priorities of the System Organization of the Companies Internal Financial Control]. Nalogi i finansy = Taxes and Finance, 2015, no. 1, pp. 22–28. (In Russ.) URL: Link
