ВНУТРІШНІЙ КОНТРОЛЬ, ЯК ЕЛЕМЕНТ ЗАПОБІГАННЯ ПОРУШЕНЬ В ОБЛІКУ БЮДЖЕТНОЇ УСТАНОВИ

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.

Purpose: The paper examines the effectiveness of internal control systems, explores the exposure of Spanish banks to the dangers of default as a result of internal control systems and establishes a relationship between internal controls and credit risk. Design/Methodology/Approach: Quantitative research approach is used to test hypotheses on the relationship between internal controls and credit risk among listed banks in Spain. Data from Bankscope and company websites from 2004-2013 were used. Generalized Least Squares (random effect) econometric estimation technique was used for the model. Findings: We find that internal control systems are in place but their effectiveness cannot be guaranteed. This exposes Spanish listed banks to serious default situations. There is significant effect of internal controls on credit risk especially the control environment, risk management, control activities and monitoring. The non-disclosure of material internal control weakness is a contributory factor to the ineffective internal control systems. There is however a perceived board ineffectiveness which does not augur well for effective internal control systems. Board characteristics for Spanish banks confirm the agency theory. Research Limitations and Implications: Data unavailability for certain years, variables and many inactive banks did not permit a larger sample size than expected. The use of quantitative variables lacks flexibility. Practical Implications: Bank management will find the work useful to ensure strict enforcement of internal control mechanisms and see it as both credit risk and operational risk issues. Central bank should hurry to compel banks to disclose material internal control weakness as provided in the reviewed COSO framework. Social Implications: Ineffective internal controls lead to credit risks, bank closure and loss of investments. Society suffers a lot from such losses and contagion. Disclosure of material internal control weakness is a social responsibility of banks. Originality/Value: The authors are yet to come across the use of purely quantitative variables to model the effect of elements of internal controls on credit risk. This study opens and adds a new dimension of internal controls not only to be seen as operational risk issue but also credit risk.

The purpose of the study is to identify the impact of specific types of related parties, which are allocated in International Standards on Auditing 550 “Related Parties”, not only on the organization of the audit of financial statements in the context of assessing the risk of material misstatement, but also on the organization of accounting in enterprises. To achieve the goal set in the work, a complex of general scientific methods (analysis, synthesis, induction, deduction, abstraction) and methodical techniques (systematization, generalization, review, comparison) based on the provisions of International Standards of Auditing was used. In the study of the essence of related parties transactions and elaboration their classification method of system analysis, logical method, and method of modeling were used. There are three major tasks within the overall responsibility of the auditor while fulfilling such engagement as audit of the financial statements have been determined. It is substantiated that two different phrases (“has a responsibility to perform audit procedures” and “needs to obtain an understanding”) which are used in International Standards on Auditing 550 “Related Parties” requires a separate approach to formation a set of optimal audit procedures. Specific types of related parties based on the International Standards 550 “Related Services” that should be considered when performing audit of financial statements has been identified. Classification of related parties transactions according to their riskiness and connection with the normal course of business into four different types has been elaborated. Two groups of inquiries concerning related parties transactions have been analyzed. It has been proved that making inquiries the auditor should provide as much information as possible in order to avoid misunderstandings, which may lead to difficulties in forming an opinion. It is noted that determining the characteristics of the dominant influence and significant transactions will allow effective communication and cooperation between auditors, management staff and those responsible for governance in formation inquires and answers for them. Using proposed classification in the process of audit of financial statements and in developing regulatory documents for accounting at the entity will allow appropriate assessing of risk of material misstatement and increasing the effectiveness of internal control at the entity. It has been substantiated that the objectives of accounting policy not only in terms of meeting the interests of the company as an entity that prepares financial statements and interacts with related parties, but also in terms of meeting the interests of the entity as a responsible party, interacting with the auditor, that seeks to establish an internal control system that will ensure reducing its own risks.

This study develops and tests a moderated mediation model regarding the effectiveness of internal control structure on organizational ethical behaviors via the mediating role of internal control effectiveness and the moderating role of organizational mindfulness in the relationship between internal control structure and internal control effectiveness. The proposed model and its hypotheses were tested using partial least squares structural equation modeling (PLS-SEM) in SmartPLS3 with survey data from 540 large Vietnamese manufacturing and service firms. This study found the following: (1) The internal control structure positively affects internal control effectiveness, which in turn promotes ethical organizational behaviors; and (2) The effect of internal control structure on internal control effectiveness is amplified by strengthening organizational mindfulness. The findings demonstrate that combining internal control systems and organizational mindfulness contributes to the ethical business practices of firms in an emerging market. Our study bridges the gap in the literature on internal control and mindfulness by providing empirical evidence on how the interaction between organizational mindfulness and internal control systems can promote ethical business practices. Additionally, our study advances the current understanding of how internal control systems can interact with organizational mindfulness to influence ethical business practices in the context of an emerging market.

Internal control systems are needed for every government agency from planning, supervision, to accountability, must be carried out in an orderly, controlled, efficient and effective. So that the performance of government agencies is directed and reaches the goal. This study aims to determine whether the implementation of the internal control system on the performance and retribution parking income at the Manado city transportation office is adequate or inadequate. This research method is a qualitative descriptive study. Based on the results of the research and discussion, it can be seen that the internal control system on the performance and retribution parking income at Transportation department of at Manado city has been "adequate and effective" because the procedure for retribution parking income have elements of internal control, namely the proper delegation of authority and responsibility. the separation of functions, recording carried out accurately and on time, the documents used contain clear and reliable information and are carried out continuously. The target achievement of the 2016-2017 is effective and the performance had been in accordance with government regulation number 60 of 2008 concerning the government's internal control system.Keywords: Government Internal Control System, Performance, Income Parking Retribution

Outside the enterprise, internal control systems do not provide sufficient protection to investment decision makers from the possibility of great management fraud. However, the system of internal control is there to provide assurance for management of an enterprise that accounting information of an enterprise is reliable. Internal control systems, internal and external audit, never really had an exclusive task to protect an enterprise form fraud, or to protect the owner and wider public from management fraud. These days, especially, institutes for internal control and audit, are becoming modern management's instrument for running and managing business operations, and for permanent evaluation reliability of an enterprise. Internal control is a form of supervision of accounting and administrative controls, and something even more, it is a special value adding philosophy in an organization through its activities. Operational audit has exceeded internal audit. Operational audit is a widespread activity that is established to analyze organizational structure, internal control systems, and flow of a working process, wider evaluation reliability and management performance results. Operational audit is and instrument of business operations of an enterprise, management tool and its corrector. It measures the realization of an organization compared to its purpose and goals set. Operational audit deals with entire achievement of goals effectiveness of business procedures and internal control, performance of some managers and other non-financial aspects of business operations. Operational audit uses exceptional, special senses through logical auditing technique to realize the purpose of organizational goals, operations controlling processes, communication and information system.

In the increasingly competitive market of today’s society, to survive has been inseparable from the development of internal accounting controls for enterprises. Practice has proved that the internal accounting control system is an important component of modern enterprise management, is to ensure sustained and healthy development of enterprises and is an essential element of business success. Since the small and medium-sized board listed company went public in 2004, the relevant departments of China continue to raise its operating characteristics, revise and supplement the relevant accounting regulations. However, the internal control of the enterprise remains a problem, therefore, to strengthen internal accounting control construction can be said to have emerged. Small plates listed family companies control more serious, the chairman has the absolute controlling stake in that company’s separation of ownership and management is very low. Based on these problems, in combination with the actual situation of small and medium-sized boards of listed companies, we can learn more mature theory of internal accounting control, analyze deeply and research the problems of internal accounting control, and put forward the countermeasure and the suggestion. Its purpose is to help rationalize business activities, legalization, in order to improve economic efficiency of enterprises. Sound and effective internal accounting controls can help identify the small board listed company’s internal accounting control deficiencies, and the analysis of practical problems will promote a more efficient and healthier development for the small plate of listed companies. To combine the actual situation and the theoretical basis of the small and medium-sized boards of listed companies, it can provide better suggestions and comments for the internal control system, so that through a more scientific analysis of the internal accounting control of small and medium-sized boards of listed companies, to identify existing problems, we can put forward a reasonable approach.

The article is of interest to internal control specialists who carry out their activities, both within the system of the Ministry of Defense of Ukraine and the Armed Forces of Ukraine, as well as in other bodies of state power, institutions and organizations of any form of ownership. Also, the results of the study will be useful to the audit team as a service that is directly involved in the process of assessing the effectiveness of the functioning of the internal control system. In the article, through review of normative legal documents, an analysis of the formation and functioning of the internal control system, both in the Ministry of Defense of Ukraine and the Armed Forces of Ukraine, as well as in the state as a whole, was conducted. The place and role of internal control in the general system of state internal financial control, in addition to the internal audit and the harmonization unit within the Ministry of Finance of Ukraine, have been established. The role of the main international standards of state internal control in the development of state internal financial control in Ukraine is determined. It is formulated that the system of internal control in the process of its functioning, like any other system, is exposed both by external and internal factors. The list of existing factors influencing the functioning of the internal control system through analysis in three directions is determined: analysis of the guidelines and the main international standards governing the functioning of the internal control system, the analysis of scientific articles, scientific works in the relevant field, interviewing with specialists of internal control of the Ministry of Defense of Ukraine. The above made it possible to distinguish external and internal factors in the context of the problems of this article. Internal and external factors have been investigated in the context of managed and unmanaged factors. The results of this research are the starting point for solving the scientific task of substantiating the scientific and methodical apparatus for assessing the effectiveness of the functioning of the internal control system in the system of the Ministry of Defense of Ukraine and the Armed Forces of Ukraine.

Evaluation of the government's internal quality control system (SPIP) in the implementation of good governance at the Gorontalo district regent's office. In order to realize quality internal control of government quality, an evaluation of the implementation and internal quality is carried out through research. The method used in this research is descriptive quantitative evaluation of the research sample totaling 31 regional employees. Data collection techniques are questionnaires, observations and documents. The data in the study were analyzed by the percentage formula (%). The research results show that. (1). Evaluation of the government's internal quality control system (SPIP) in the implementation of good governance with control environment indicators is in the less effective category with a percentage of 69,93%. (2). Evaluation of the government's internal quality control system (SPIP) in the implementation of good governance with risk assessment indicators is in the less effective category with a percentage of 68.01% (3). Evaluation of the government's internal quality control system (SPIP) in the implementation of good governance with indicators of control activities in the effective category with a percentage of 70.48%. (4). Evaluation of the government's internal quality control system (SPIP) in the implementation of good governance with indicators of information and communication is in the effective category with a percentage of 74.19%, (5). evaluation of the government's internal quality control system (SPIP) in the implementation of good governance with indicators of monitoring and internal control is in the less effective category with a percentage of 68.81%.

Cash is the company's most liquid asset and plays a significant role in funding the company's operations compared to other investments, so cash control is needed within the company. Companies with organizational management where internal controls can control errors in carrying out the profession to protect cash from misuse efforts from when cash is received until it is disbursed. LP3M Superior Polytechnic is a private tertiary institution whose primary income is the payment of student tuition fees. The research method uses the descriptive analysis method. The test results show that the cash receipts internal control system is effective, contrary to the cash disbursement internal control. At the same time, the internal control system for cash disbursements has not been effective because there are still elements of Internal Control within the company that have not been fully implemented, including placing the cashier in the same room as other employees, which should be separate and have a separate room as accounting control.

The concept of Public Internal Financial Control (PIFC) has been developed by the European Commission in order to provide a structured and operational model to assist national governments in reengineering their internal control environment and in particular to upgrade their public sector control systems in line with international standards and EU best practice. The democratic changes affecting all areas of life in the last years, have led to reforms in the management of public finances of the public sector in the Republic of Albania. On the road of the accession to the European Union, Albania is in the process of important conceptual, legislative and structural reform of the Public Internal Financial Control framework with the aim of strengthening the managerial accountability of the managers of public sector organizations and further develop independent internal audit. The paper aims to give some key issues regarding PIFC development in Albania such as: the level of transparency regarding the status of the financial management and control and internal audit in the public sector; the awareness of the Heads of public organizations about the importance of sound financial management and control and to enhance their managerial accountability; information about the self assessment of the heads of public sector organizations on the adequacy and the effectiveness of internal control and about the progress made. It also outlines the weaknesses, solutions and development opportunities based on the assessment of the status of the financial management and control systems as well as of the internal audit. Through conclusions it summarizes the main directions in which the Albanian institutions must be focused in the future for further development and improvement of management of public resources. The development of the new model of public internal financial control in Albania demands from all the participants in the process, leading to effective action in accordance with their roles and responsibilities. Only proper implementation of new legislation and efforts by all stakeholders can lead to achieving the goal - to create a modern system, reliable and functioning of public internal financial control. In this regard the CHU/FMC will outline specific measures related to strengthening managerial accountability and updating of legislation and methodology in the field of internal control in accordance with EU legislation and best practices. As one of the three pillars of the Public Internal Financial Control System, Internal Audit has developed and continuously improved in order to take its modern role as advisor for the assessment and systems and contributing to the achievement of strategic and operational objectives of the organization, always in accordance with international standards and best practices. DOI: 10.5901/ajis.2014.v3n4p301

The purpose of this study is to determine the internal control system of accounts receivable, and to determine whether internal control analysis of model “COSO” on Account Receivable has been implemented at PT. Astra Sedaya Finance branch Cirebon. Primary & secondary data are analyzed based on the components of internal control established by the Committee of Sponsoring Organizations (COSO). The components of internal control that will be analyzed in this study, and then have 5 (five) element: 1) Control Environmental, 2) Risk Assessment, 3) Control Activities, 4) Information and Communication, and 5) Monitoring Activities. Research result Internal Control of accounts receivable at the Astra Sedaya Finance Cirebon Branch had been found effective, where the company's management had adopted the basic concepts and principles of internal control by standard operating procedures that had been set by the company. The overall system of internal control over accounts receivable at the Astra Sedaya Finance was effective enough, where management had implemented the principles of internal control in accordance with COSO, but there has been a weakness that the company still had not been put on the application system for recording and completion of documents receivable for companies in which still using manual computerized.

The Alignment of Internal and External Control Mechanisms: The Differential Market Valuation and Performance Effects in High-Growth Versus Low-Growth Industries

Purpose – This study aims to examine and visualize the adopted internal control structure and effectiveness in firms and present a typology of firms. Control structure and effectiveness are measured based on the assessment of management, rather than using reported material weaknesses as most studies do. This type of evaluation is more purposeful for firms that do not apply the Sarbanes-Oxley Act. Internal control frameworks provide only broad guidance concerning internal control concepts, leaving the details to the adopting firms. Design/methodology/approach – The survey data (from 741 CEOs) are clustered using the self-organizing map, a visual artificial neural network approach. A three-dimensional effectiveness proxy is used. Findings – The analysis reveals four alternative types of internal control effectiveness in firms and visually presents how the components of the internal control structure are associated with each one. A typology of internal control structure and effectiveness is then created. Practical implications – The findings suggest that there are interrelated, but not straightforward, relationships between internal control variables and that there is a link between some of them and higher internal control effectiveness in practice. These findings have important implications for those responsible for improving or assessing internal control, such as management, personnel and internal and external auditors. Originality/value – This paper uses a clustering approach to create a typology for alternative types of internal control structure and effectiveness, based on data from actual firms. Instead of using material weaknesses as a measure, this study uses managers’ own assessments of internal control effectiveness.

В статье исследуются вопросы организации систем внутреннего контроля как формы реализации рисковой функции страхования. Анализируются статистические данные по рынку страховых услуг и обосновываются направления развития системы внутреннего контроля и аудита страховых организаций, её взаимосвязь c государственным финансовым контролем финансовой устойчивости субъектов страхового дела. Рассматривается автоматизированная система внутреннего финансового контроля и аудита, построенная на принципах риск-ориентированного подхода в соответствии со стандартами Solvency II, как механизм, способствующий достижению локального компромисса в отношениях участников страховых экономических отношений. В ходе проведения исследования был сделан вывод о том, что страховым организациям необходимо внедрение эффективной системы внутреннего контроля, которая позволяла бы органам страхового надзора осуществлять превентивное выявление рисков потери финансовой устойчивости и платежеспособности субъектов страхового надзора.Цель – разработка модели системы внутреннего контроля и аудита страховых организаций в системе государственного страхового надзора в соответствии с риск-ориентированным подходом.Метод или методология проведения работы: статья подготовлена на основе проведения кабинетных исследований, информация собрана посредством качественных методов сбора данных, а именно сравнительного анализа, факторного анализа, формализованного контент-анализа.Результаты: разработана модель системы внутреннего контроля и аудита, основанная на принципах риск-ориентированного надзора в целях ранней диагностики рисков страховых организаций.Научная новизна исследования – разработка рекомендаций по совершенствованию принципов и методов внутреннего контроля и аудита страховой организации в системе государственного страхового надзора, построенной на принципах риск-ориентированного в целях превентивной диагностики рисков страховщика.Область применения результатов: полученные результаты целесообразно применять субъектами страхового надзора, в частности страховыми организациями и органами страхового надзора.