Risk-based internal control of key business processes as a mechanism of economic agent's sustainable development

2021 ◽  
Vol 27 (12) ◽  
pp. 2746-2771
Author(s):  
Mariya Yu. ORLOVA
Keyword(s):  
Sustainable Development ◽  
Financial Reporting ◽  
Internal Control ◽  
Business Processes ◽  
Control Procedure ◽  
Economic Entity ◽  
Study Results ◽  
Control Concept ◽  
Industry Affiliation ◽  
High Level

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.

scholarly journals ANALYSIS OF CONTEMPORARY POLICY IN THE FIELD OF SUSTAINABLE DEVELOPMENT OF ECONOMIC ENTITIES

2019 ◽  
Vol 7 (2) ◽  
pp. 76-80
Author(s):  
Вера Сорокина ◽  
Vera Sorokina ◽  
Виктор Шнайдер ◽  
Viktor Shnayder ◽  
Александр Данилов ◽  
...  
Keyword(s):  
Sustainable Development ◽  
Business Processes ◽  
Business Community ◽  
The Sustainable Development ◽  
Economic Entity ◽  
Stage Of Development ◽  
Environmental Objectives ◽  
High Level ◽  
The Impact

The article analyzes the current sustainable development policies of economic entities. At the present stage of development of society, economic relations between the participants of business processes as a prerogative in relations highlight the long-term cooperation, which is aimed at sustainable development. To date, the sustainability of the development of economic entities of any field of activity is given great attention. This is due primarily to changes in legislation, resource-boundness, rising prices for natural resources, requirements for the implementation of social and environmental objectives, and competitive advantages. Therefore, the introduction of the principles of sustainable development into business processes determines the need for a comprehensive assessment of the formation of the sustainable development policy of any economic entity. The relevance of issues of sustainable development of economic entities is indisputable, since the sustainability of development affects the investment attractiveness of economic entities and their interaction with stakeholders whose demands are directed to the environmental, social, economic aspect of the economic entity. Accordingly, an economic entity with transparency in this regard will be of greater interest to potential stakeholders, which will significantly affect the financial component of any Russian business entity. A balanced and effective policy leads to the reduction of all possible risks, strengthening competitiveness, increasing the efficiency of employees and customer loyalty, improving the reputation of the business community as a whole and the long-term functioning of an economic entity. Achieving a high level of sustainability is possible when delivering sound goals through planning, productive work with stakeholders and the implementation of successive activities in key areas of activity, namely: interaction with staff, with the business community, with society and the state as a whole. In turn, the achievement and maintenance of long-term sustainable development of an economic entity is determined by three important directions: environmental, economic and social, provided they are combined, and not isolated. Therefore, today, the main purpose of the formation and analysis of indicators of sustainable development is the reflection of the impact of the organization on stakeholders, with whom it will be in direct or indirect economic cooperation.

PENGARUH KOMPETENSI APARATUR DESA, KETAATAN PELAPORAN KEUANGAN DAN SISTEM PENGENDALIAN INTERN TERHADAP PENCEGAHAN FRAUD DENGAN MORAL SENSITIVITY SEBAGAI VARIABEL MODERASI

2018 ◽  
Vol 1 (2) ◽  
pp. 63-89
Author(s):  
Klara Wonar ◽  
Syaikhul Falah ◽  
Bill J. C. Pangayow
Keyword(s):  
Control Systems ◽  
Financial Reporting ◽  
Internal Control ◽  
Financial Management ◽  
Quantitative Research ◽  
Primary Data ◽  
Survey Method ◽  
Moral Sensitivity ◽  
Fraud Prevention ◽  
Study Results

This study aims to examine the effect of fraud prevention on village / village financial management as the dependent variable and the competency of village apparatuses, compliance of government financial reporting, internal control systems as independent variables while moral sensitivity as amoderating variable. This research is a quantitative research or hypothetic - deductive method that aims to answer such questions that are related to exploratory, descriptive, explanatory and predictive studies. Primary data is mainly used in this research. Data collection is conducted using a survey method in the form of a questionnaire that lists the statements, which were given to the respondents to be filled in order to get information, and then the data analyzing was conducted using the Warp-PLS 5.0 Application software. The study results show that the competence of village officials influences fraud prevention, financial reporting adherence affects fraud prevention, and meanwhile the internal control system does not affect fraud prevention. Furthermore, moral sensitivity does not moderate the competence of village officials, adherence to financial reporting and internal control systems.

Methodological Aspects of IT Audit As a Tool for Improving the Eff ectiveness of Internal Control

Auditor ◽  
2021 ◽  
Vol 7 (1) ◽  
pp. 25-29
Author(s):  
ZHanna Kyevorkova
Keyword(s):  
Internal Control ◽  
Information Technologies ◽  
Business Processes ◽  
Economic Entity ◽  
Key Issues ◽  
Modern Information ◽  
Organizational Activities ◽  
It Audit ◽  
Methodological Aspects ◽  
Data Audit

Th e article reveals the methodological aspects and key issues of data audit, tracked directly by programs using information technologies, the soft ware of which allows you to automate the organizational activities of an economic entity for the development of various business processes. Th e article reveals the author’s position of the practice of applying the results of IT audit and its directions at each stage of the audit, taking into account the audit procedures carried out, modern information technologies that allow internal control to work more eff ectively, analyze the functioning of IT audit, changes in the organization and develop scientifi cally based tools that allow IT audit to be rebuilt in accordance with changes in the situation in the activities of economic entities.

Applying the process approach in setting up the system of internal control in economic entities

2021 ◽  
Vol 20 (12) ◽  
pp. 2313-2323
Author(s):  
Zhanna A. KEVORKOVA ◽  
Natal'ya G. SAPOZHNIKOVA
Keyword(s):  
Control System ◽  
Internal Control ◽  
Business Processes ◽  
Risk Identification ◽  
Process Approach ◽  
Control Practice ◽  
Economic Entity ◽  
Internal Control System ◽  
Theoretical Generalization ◽  
And Control

Subject. The article addresses the organization and implementation of process approach when setting up a system of internal control of an economic entity, which ensures the management of effectiveness of divisions’ activities. Objectives. We aim at investigating the organization of the internal control system of an economic entity, based on its activities, accounting policies, classification of business processes, and risk identification. Methods. The study rests on methods of theoretical generalization, structural grouping, logical analysis, as well as the analysis of scientific and practical literature and accounting and control practice. Results. The analysis of practices revealed a number of problems in the implementation of the process approach in the accounting and control activities of economic entities, in particular, insufficient understanding and unpreparedness of management to implement the process approach, the lack of a system for regulating business processes, the lack of interconnection between the system of control indicators and the created business processes. It is advisable to divide the process of organizing the internal control system into a number of stages, i.e. the definition of activities, typology of business processes, risk identification, testing the internal control system’s quality. Conclusions. The introduction of the process approach in organizing an internal control system involves the systematization of information, depending on the nature of the business process, requiring permanent updating. The emergence of non-standard situations makes it necessary to adjust the boundaries of business processes. The resources of accounting business processes are personnel, software, equipment, and other infrastructure elements.

scholarly journals The role of effective audit committee in strengthening the financial reporting: Evidence from Jordanian listed companies

2012 ◽  
Vol 9 (3) ◽  
pp. 59-68 ◽  
Author(s):  
Mo’taz Amin Al-Sa’eed ◽  
Soud M. Al-Mahamid
Keyword(s):  
Financial Reporting ◽  
Internal Control ◽  
Audit Committee ◽  
Internal Audit ◽  
Listed Companies ◽  
International Standards ◽  
Future Research ◽  
External Audit ◽  
Cross Sectional ◽  
Study Results

This study aims to understand the features of an effective audit committee and its role in strengthening financial reporting. A questionnaire based survey was circulated to public listed companies on the Amman Stock Exchange (Banking, insurance, and financial institutions). The study was aimed at internal audit managers and finance managers. Out of 156 questionnaires, we received 110 back which represents a 71% response rate. The study results show that the research respondents have a good level of education and experience. In addition, there is a relationship between internal controls, international standards on auditing, institute of internal audit; Jordan securities commission requirements, external audit, understanding of audit committee functions, and financial reporting. Furthermore, the internal control, international standard on auditing and institute of internal audit, Jordan securities commission requirements, External audit, understanding of audit committee functions can explain a significant amount of the variability in financial reporting. Finally, the research results also show that age and gender make a difference for our respondents when they evaluate financial reporting. The study like other cross sectional studies is not free of limitations. Managerial implications and new avenues of future research are supplied. Future research also can borrow the research model and apply a longitudinal study to solve the cross sectional study problems.

scholarly journals Assessment of “maturity” of the taxpayer's internal control system for tax monitoring purposes

2021 ◽  
pp. 28-59
Author(s):  
Elena Vladimirovna Berezina ◽  
Anna Sergeevna Balandina ◽  
Ol'ga Svyatoslavovna Belomyttseva
Keyword(s):  
Control System ◽  
Internal Control ◽  
Control Procedure ◽  
Economic Entity ◽  
It Systems ◽  
Internal Control System ◽  
The Subject ◽  
The One ◽  
Definition Of

The internal control system is examined as a variety of internal control of an economic entity on the one hand, and as the foundation for transitioning towards tax monitoring on the other. Such approach allows assessing this structure from the perspective of taxpayers, as well as from the standpoint of implementation of public function of tax control. The object of this article is the process of improving internal control system of tax obligations by the taxpayer in the conditions of digitalization of tax administration. The subject of this article is the theoretical aspects of internal control as an administrative function, as well as comparative analysis of the Russian “internal control” system with the classical COSO model. The scientific novelty consists in comprehensive research of the internal control of tax obligations, determination of its essential characteristics,  and assessment of the consequences of formalization of requirements thereof, which led to the conclusion on transformation of the internal control of the taxpayer from the area of reputational merits of the economic entity and internal administration instruments to the subject of public control by tax authorities in tax monitoring processes. It remains to be seen whether state interference in such delicate sphere of activity of an economic entity as internal control is justified. The goal of this research consists in the analysis of the effective requirements of the Federal Tax Service of Russia from the perspective of possibility of their implementation by the particular taxpayers. The article provides the examples of assessment of certain components of the internal control system based on the criteria set by the Federal Tax Service of Russia. The author formulates the definition of control procedure, carries out classification of the aforementioned criteria; develops the examples of effective design of some controls; as well as presents the examples of assessment of IT systems from in the context of extended requirements of the Federal Tax Service of Russia.

scholarly journals Convergent Insights for Sustainable Development and Ethical Cohesion: An Empirical Study on Corporate Governance in Romanian Public Entities

2020 ◽  
Vol 12 (7) ◽  
pp. 2990 ◽  
Author(s):  
Ionela Munteanu ◽  
Adriana Grigorescu ◽  
Elena Condrea ◽  
Elena Pelinescu
Keyword(s):  
Sustainable Development ◽  
Corporate Governance ◽  
Financial Reporting ◽  
Internal Control ◽  
Financial Management ◽  
Global Financial Crisis ◽  
Public Procurement ◽  
Principal Component ◽  
Efficiency Index ◽  
Corporate Accountability

The global financial crisis was decisive in reanalyzing the role of corporate governance based on the accountability and ethics of governance practices and its impact on sustainable development. The study aims to analyze the relevance of and the interdependencies between financial governance assessment indicators and income efficiency with synergetic effects on sustainable development and social cohesion, offering a distinct contemplation on errors in governance and financial reporting. Deviations concerning the accuracy of financial statements, flaws in the process of budget creation and budgetary execution, poor implementation of internal control systems, non-compliance with procedures of public procurement contracts, and ineffectiveness in sound financial management represent barometers for assessing managerial accountability in the public sector. This study is based on data reported by the Romanian Court of Accounts processed with the principal component analysis and proposes a global efficiency index as a benchmark indicator barometer in order to analyze the influence of managerial accountability and sustainable reporting compliance on revenue reported by public institutions in Romania. The results of the study are of empirical importance and explore the constant need to evaluate managerial accountability and ethics, with an emphasis on error, in order to improve public governance and enhance corporate accountability.

scholarly journals FINANCIAL AND NON-FINANCIAL REPORTING OF ECONOMIC AGENTS: IMPORTANCE, OBJECTIVES AND DECISION

2019 ◽  
Vol 7 (2) ◽  
pp. 46-50 ◽  
Author(s):  
Ольга Шнайдер ◽  
Ol'ga Shnayder ◽  
Татьяна Иззука ◽  
Tatjana Izzyka
Keyword(s):  
Sustainable Development ◽  
Financial Reporting ◽  
Complex Analysis ◽  
Well Being ◽  
The Sustainable Development ◽  
Factors Affecting ◽  
Economic Agents ◽  
Financial Factors ◽  
Economic Entity ◽  
Cultural Investment

The economy of our country is going through a difficult period, which is aggravated by endless sanctions and difficult economic conditions in the world, which in turn affects the level of sustainable development of Russian economic entities. The primary problem of instability in terms of sustainable development of Russian companies is determined by the inability of economic entities to respond effectively to changes in the internal and external environment. In this regard, there is a need to establish an effective mechanism for managing sustainable development. One of the tools of this mechanism is non-financial reporting. The complexity of the complex analysis of the sustainability of development due to the large number and variety of financial and non-financial factors affecting the sustainable development of the economic entity, and therefore their study is a certain complexity. First of all, it is necessary to pay attention to the fact that Russian companies, as well as foreign ones, are guided by the level and volume of harmful emissions into the atmosphere, water bodies and soil. The reports show the resources consumed and their classification, the level of education and the age composition of the staff, as well as social factors focused on the average wage level, the involvement of personnel in the production process, the possibility of training and other non-financial factors. Do not forget about the socio-cultural, investment and other factors affecting the economic entity as a whole. It is important to understand that economic actors seeking to benefit from the transition to sustainable development often have a longer time horizon and a broader set of objectives than traditional companies. As a rule, they are dissatisfied with the status quo and want to act socially responsible, as well as to protect the environment. They value employee well-being, society, culture and future generations. However, without being able to ignore short-term challenges, success in implementing the concept of sustainable development is more complex and time-consuming.

Methodological aspects of the organization of internal control over the preparation of financial statements in economic entities

2020 ◽  
pp. 39-56
Author(s):  
Zhanna Arakelovna Kevorkova
Keyword(s):  
Control System ◽  
Financial Reporting ◽  
Internal Control ◽  
Business Processes ◽  
Financial Statements ◽  
Federal Law ◽  
Internal Control System ◽  
Definition Of ◽  
Methodological Aspects

The need to organize internal control, the mandatory nature of which is regulated by the Federal law “on accounting” FZ‑402, can be implemented in various forms. The results of the analysis of practices the largest economic entities in terms of internal control has identified some features of the methodological and organizational implementation of the system of internal control over financial reporting, which can be embedded in the activities of the internal control (audit) of various organizations. The author shows the sequence of organization of the internal control system for the preparation of financial statements, taking into account the definition of critical business processes of economic entities and related elements of financial reporting, which will be the focus of the internal control system.

scholarly journals Restructuring of business processes for sustainability: revealing the potential of reengineering and Kaizen

2021 ◽  
Vol 1 (1) ◽  
pp. 33-42
Author(s):  
Ilona Petryk ◽  
Keyword(s):  
Qualitative Research ◽  
Sustainable Development ◽  
Supply Chain ◽  
Research Methods ◽  
Business Process ◽  
Business Processes ◽  
Qualitative Research Methods ◽  
High Level ◽  
Level Of Risk

In times of crisis, companies suffer from instability. One way to improve the situation is to restructure business processes. I aimed to explore how companies can restructure business processes for sustainable development. I used qualitative research methods to reveal reengineering and Kaizen methods as the most popular. I examined the peculiarities and general stages of redesigning business processes. After that, I researched the strategy to maximize performance while improving the quality of the business process. As I saw, the high level of risk during radical changes is understandable because most of the variables in the operation of new logistic business processes are not precisely known and, therefore, challenging in the context of forecasting. Basing on the results, I propose a new algorithm for restructuring business processes in the supply chain. Results and recommendations can be helpful for business and government during sustainability goals achievement

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