Practical implementation of the methods to assess the effectiveness of the insurance company's internal control system

2020 ◽  
Vol 23 (4) ◽  
pp. 428-443
Author(s):  
A.A. Turgaeva
Keyword(s):  
Control System ◽  
Internal Control ◽  
Insurance Companies ◽  
Expert Assessment ◽  
Practical Implementation ◽  
Insurance Company ◽  
Audit System ◽  
Internal Control System ◽  
Mathematical Techniques ◽  
System Effectiveness

Subject. This article deals with the issues of building an internal control and audit system of insurance companies and improving its efficiency. Objectives. The article aims to assess the effectiveness of the internal control system of the insurance company on the basis of the original quantitative and qualitative indicators presented in previous articles. Methods. For the study, I used statistical inquiry and data handling procedures, mathematical techniques, grouping, and expert assessment methods. Results. The article presents a calculated integrated index of the internal control system effectiveness of the insurance company. It assesses the organization of the internal control system through testing. Conclusions. By assessing the internal control system of the insurance company using quantitative and qualitative indices, it is possible to identify the level of effectiveness of the internal control system and the system's weaknesses. Employee surveys can improve the level of internal control by exposing the auditors' substandard work.

scholarly journals BLOCK-MODULE MODEL OF AUDITING THE EFFICIENCY OF THE INTERNAL CONTROL SYSTEM

2021 ◽  
Vol 16 (1) ◽  
pp. 130-135
Author(s):  
Aksana Albekovna Turgaeva
Keyword(s):  
Control System ◽  
Internal Control ◽  
Business Processes ◽  
Insurance Companies ◽  
Insurance Company ◽  
New Approaches ◽  
Model Sets ◽  
Internal Control System ◽  
Control Procedures

The internal control system (ICS) organized in insurance companies in the context of the development of innovative processes and the digitalization of the economy does not always meet the requirements of the modern industry, which leads to the need to assess the effectiveness of the ICS and its compliance with new standards. This position involves the modernization of essential theoretical and methodological approaches to the formation and implementation of the audit model of the effectiveness of internal control of companies. The article is devoted to the issue of introducing new approaches to the performance audit of ICS in insurance companies, based on the construction of a block-modular scheme, which should be translated into certain modules. The block-modular scheme proposed by the author can be used to assess the ICS and identify the risks of insurance companies. The studies were based on the existing options for the methodological construction of assessing the effectiveness of the internal control and audit system. The presented model sets a benchmark in the field of risk assessment and verification of the internal control system. The effectiveness of the new approach in assessing the effectiveness of the ICS is evidenced by the fact that the description of the specifics of the activities of insurance companies, as well as the compilation of a register of possible risks for planning the audit of the effectiveness of the internal control system lead to remarkable results that allow truly assessing the effectiveness of the ICS. Areas and methods of audit, control procedures, relationships between business processes and relationships between employees, which were not noticed or were ranked as unimportant events, turn out to be key for the effective operation of the company and the conduct of internal control at a high professional level. The advantage of the block-modular model of the audit of the effectiveness of the ICS of the insurance company is that the correct and accurate route of the work of the controlling body is built, the control flags are correctly placed at all the stages of the audit, which implies that there are no delays at one stage or another and the identification of shortcomings in the work of the internal control. Today we are talking not at all about the quality of insurance services, but rather about the quality of the insurance business, its organization and timely adaptability to changes in the environment of the insured. In this regard, the development of the methodology for assessing the ICS of insurance companies requires new approaches and models

scholarly journals Features of Internal Control of Insurance Companies

2019 ◽  
Vol 6 (3) ◽  
pp. 84-90 ◽  
Author(s):  
A. О. Fokina
Keyword(s):  
Control System ◽  
Internal Control ◽  
Internal Audit ◽  
Legal Regulation ◽  
Insurance Companies ◽  
Insurance Company ◽  
Stage Of Development ◽  
Control Actions ◽  
Internal Control System ◽  
High Level

Current situation of the economy for the insurance business is characterized not only by a high level of income, but also by a high level of competition in the industry. The article defines the feasibility of developing and implementing an internal control system for modern insurance companies. Internal control of the insurance company is related to internal audit and insurance management. These concepts at the current stage of development of ICS insurance companies are not clearly separated. The paper considers the features of the regulatory and legal regulation of the internal control system, analyzes the main provisions of the Concept of the internal control system of insurance companies. The author defines the algorithm of internal control system formation, features and requirements to the system in insurance companies. Particular attention should be paid to control actions that determine the specifics of business processes when creating insurance company ICS. Due to well-chosen control actions, it is possible to increase the efficiency of both the individual business process and the insurance company as a whole.

THE INFLUENCE OF INTERNAL CONTROL SYSTEM EFFECTIVENESS, COMPENSATION COMPLIANCE, AND INFORMATION ASYMMETRY ON THE TENDENCY OF ACCOUNTING FRAUD (A CASE STUDY ON SEHATI CREDIT UNION)

2019 ◽  
Vol 24 (1) ◽  
pp. 23-35
Author(s):  
Amalia Nurul Hidayah ◽  
Misdiyono
Keyword(s):  
Control System ◽  
Information Asymmetry ◽  
Significant Influence ◽  
Internal Control ◽  
Secondary Data ◽  
Credit Union ◽  
Accounting Fraud ◽  
Internal Control System ◽  
System Compensation ◽  
System Effectiveness

A cooperative is a governmental organization established to enhance economic growth and national unity. As the development of the law on cooperatives, the present and developing institutions similar to Savings and Loan Union is called Credit Union. A cooperative is very vulnerable to the risk of loss. Insecurity is possible because of the tendency of accounting fraud. Some things that can affect the tendency of accounting fraud are internal control, compliance compensation, and information asymmetry. This research aims to determine whether there is any influence of internal control system effectiveness, compensation compliance, and information asymmetry on the tendency of accounting fraud. The research uses the quantitative method, and the research subject is Sehati Credit Union. The research data consist of primary and secondary data, especially the purposive sampling data which are collected from 36 respondents. Whereas, the data analysis technique uses multiple regression analysis using SPSS 21 software for Windows. The research concludes that the effectiveness of internal control system has a partially positive significant influence on the tendency of accounting fraud, compensation compliance has a partially negative significant influence on the tendency of accounting fraud, and information asymmetry has a partially positive significant influence on the tendency of accounting fraud. It means that the effectiveness of the internal control system, compensation compliance, and the information asymmetry have significant influences on the tendency of accounting fraud. Keywords: Internal Control System, Compensation Compliance, Information Asymmetry, Accounting Fraud.

scholarly journals The Effect of the Internal Control System Effectiveness and the Quality of Financial Reporting and Its Impact on Fraud Prevention of Bandung Regency

2021 ◽  
Vol 5 (1) ◽  
pp. 13
Author(s):  
Yasmin Yasmin ◽  
Srihadi Winarningsih ◽  
Sri Mulyanti
Keyword(s):  
Corporate Governance ◽  
Control System ◽  
Internal Control ◽  
Financial Statements ◽  
Research Approach ◽  
Fraud Prevention ◽  
Good Corporate Governance ◽  
Internal Control System ◽  
System Effectiveness

The corruption has emerged as the main topic of discussion in many countries and fraud prevention becomes important as well. The 2018 Annual Report of the Corruption Eradication Commission (KPK) revealed that in general the KPK's enforcement action over the past 10 years showed a significant increase. This was also confirmed by President Jokowi that one of the big problems of Indonesia is related to Corruption This study is aimed to discover fraud prevention from the perspective of financial statements through the internal control system effectiveness and good corporate governance implementation.This study uses an explanatory research approach to analyze how one variable affects other variables through hypothesis testing. The data was collected using a questionnaire which distributed and filled by all regional authorities in Bandung Regency and then analyzed through path analysis using SPSS data processing tools. The results indicate that the effectiveness of internal control systems along with the good corporate governance implementation and the quality of financial statements have a positive effect on fraud prevention and partially the effectiveness variable of the internal control system has no significant effect, while the other two variables have a significant effect.

scholarly journals Evaluation of the effectiveness of the internal control system of the institution using key performance indicators

VUZF Review ◽  
2020 ◽  
Vol 5 (2) ◽  
pp. 55-63
Author(s):  
Anatolii Syrotenko ◽  
Ivan Tkach ◽  
Anatolii Loishyn ◽  
Mykola Tkach
Keyword(s):  
Control System ◽  
Internal Control ◽  
Performance Indicators ◽  
Internal Audit ◽  
Key Performance Indicators ◽  
Subject Area ◽  
Alternative Methods ◽  
Practical Implementation ◽  
Internal Control System ◽  
The Matrix

The conducted research may be of interest to specialists of internal audit, internal control, and managers of all levels, who organize the functioning of internal control in subordinate structural units. The article practically substantiates the use of the matrix of key performance indicators (KPI) in assessing the effectiveness of the internal control system of the Ministry of Defense of Ukraine. The research conducted in the article is the result of the practical implementation of the developed comprehensive methodology for assessing the effectiveness of the internal control system of the Ministry of Defense of Ukraine. To achieve this goal, the study conducted its decomposition and separately: evaluated the selected indicators of the effectiveness of the internal control system through appropriate testing and analysis of financial (accounting) statements; a matrix of key performance indicators is formed; the generalized indicator of efficiency of functioning of system of internal control is defined; the corresponding assessment of efficiency of system of internal control according to the chosen criterion is carried out. The results of the study made it possible to determine a numerical value that can objectively indicate the effectiveness of the internal control system of the institution. The results of the evaluation of indicators can be further systematized in the appropriate database for the formation of statistical information and taken into account in the risk-oriented planning of internal audit activities. The results of the study in the article can be used in part and applied thematically when checking other indicators in the internal control system. The article formulates the prospect of further research in the subject area to improve the accuracy of assessing the effectiveness of the ICS, as well as in finding alternative methods for its evaluation.

Cluster analysis in the control over the activity of insurance companies

2020 ◽  
Vol 19 (3) ◽  
pp. 541-563 ◽  
Author(s):  
A.A. Turgaeva
Keyword(s):  
Cluster Analysis ◽  
Control System ◽  
Internal Control ◽  
Insurance Companies ◽  
Data Sampling ◽  
Mathematical Methods ◽  
Statistical Research ◽  
Internal Control System ◽  
And Cluster Analysis ◽  
And Control

Subject. The article considers clustering of insurance companies as a type of informatization of economy for practical application by the internal control system. Objectives. The purpose is to present clusters and give their interpretation for insurance companies in relation to internal control; identify the possibility of clustering, using the Deductor Studio platform developed by Base Group for internal control systems. Methods. The study employs techniques of statistical research and data processing, mathematical methods, methods of grouping, and cluster analysis. Results. Clusters are presented by several indicators of insurance companies. The study reveals heterogeneity in the results of distribution according to the rating of companies in terms of various indicators. It confirms the need to use the cluster analysis in the internal control system. Conclusions. Cluster analysis enables the internal control system to take into account all data regardless of their amount, and avoid data sampling. It reduces the level of errors in the results of analysis and control.

Digital platform creation in the insurance business to increase the efficiency of the internal control system

2021 ◽  
Vol 20 (6) ◽  
pp. 1177-1190
Author(s):  
Aksana A. TURGAEVA
Keyword(s):  
Information Technology ◽  
Control System ◽  
Internal Control ◽  
Information Technologies ◽  
Positive Impact ◽  
Insurance Industry ◽  
Point Of View ◽  
Insurance Companies ◽  
Digital Platform ◽  
Internal Control System

Subject. The article considers the possibilities of using digital and information-and-analytical platforms in the insurance industry to improve the efficiency of the internal control system of insurance organizations. Objectives. The study aims to review the market of information technology solutions in insurance activities; to present factors, dictating the need for a single digital platform to improve the efficiency of the internal control system of insurance companies; to present the areas of implementing FinTech solutions in insurance activities. Methods. I employ methods of observation, information processing, grouping, information technology analysis, and statistical analysis. Results. The paper presents the results of the study of information technologies used by insurance companies. It proves that the implementation of FinTech solutions is of particular importance from the point of view of streamlining the internal control and the work of supervisory authorities. Conclusions. The creation of a single digital platform for interaction between the users of insurance processes will contribute to enhancing the efficiency and effectiveness of control and supervisory procedures of internal control of insurance organizations, and have a positive impact on financial performance.

scholarly journals ORGANIZATION OF INTERNAL CONTROL BY BUDGET ORGANIZATIONS (INSTITUTIONS) AS A BUDGETARY FUNDS MANAGER

2019 ◽  
pp. 689-698 ◽  
Author(s):  
K. Proskura
Keyword(s):  
Control System ◽  
Internal Control ◽  
Internal Audit ◽  
Control Measures ◽  
Practical Implementation ◽  
Parent Organization ◽  
Control Units ◽  
Internal Control System ◽  
Information And Communication ◽  
Five Elements

This article is devoted to the study of the organization and formation of the system of internal control by budget organizations (institutions), the definition and substantiation of the components and procedures of internal control, as well as the development of a mechanism for the practical implementation of this system in a budget institution (organization). The construction of an internal control system of a budgetary institution is based on the components: control environment (construction of the structure of the internal control system and its subordination, responsibilities and powers of internal controllers, requirements to their competence, their independence with respect to utsanov), risk management (identification and assessment of the probability and risk impact on the institution’s activities, costs, the risk response, in comparison with the resulting benefit from its reduction), control measures (which procedures and measures are implemented by the institution in order to ensure the effectiveness of internal control), information and communication, monitoring (reporting of internal control units and checking the results of its work by the supreme body). The organizational principles for the construction of internal control, the principles on which internal control is to be based, as well as the essence of the five elements of internal control, in accordance with which internal control is to be carried out by the administrators of budget funds, is regulated in the Methodological Recommendations on the organization of internal control by budgetary funds managers. in their institutions and in subordinate budget institutions (approved by the order of the Ministry of Finance of Ukraine dated September 14, 2012 No. 995). An important factor in the effectiveness of the internal control system’s operation is the accountability of the internal control units to the manager and parent organization, embodied in the provision of written reports on the results of control measures carried out with a certain periodicity, as well as the introduction of a mechanism for monitoring the elimination of identified deficiencies and violations. The existence and effectiveness of the internal control system’s functioning forms the basis for ensuring the effectiveness of the organization, including the efficient use of economic resources. Key words: budgetary institution, internal control, internal control system, internal audit department.

scholarly journals Applying a matrix of key performance indicators in the evaluation of internal control institutions

2020 ◽  
Vol 10 (1) ◽  
pp. 34-46
Author(s):  
Anatolii Loishyn
Keyword(s):  
Control System ◽  
Internal Control ◽  
Performance Indicators ◽  
Internal Audit ◽  
Key Performance Indicators ◽  
Financial Accounting ◽  
Practical Implementation ◽  
Internal Control System ◽  
The Matrix ◽  
Generalized Indicator

The conducted research can be of interest to the specialists of internal audit, internal control, and heads of all levels who organize the functioning of internal control in subordinate structural units. The article substantiates the use of the Key Performance Indicators (KPI) matrix in assessing the effectiveness of the internal control system of the Ministry of Defense of Ukraine. The research conducted in the article is the result of the practical implementation of the developed complex methodology for evaluating the effectiveness of the internal control system of the Ministry of Defense of Ukraine. In order to accomplish this task, the study carried out its decomposition and separately: conducted an assessment of selected indicators of the effectiveness of the internal control system through appropriate testing and analysis of financial (accounting) reporting; the matrix of key performance indicators is formed; a generalized indicator of the efficiency of the functioning of the internal control system is determined; a proper evaluation of the performance of the internal control system was performed according to the selected criterion.

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