PLACE OF INTERNAL CONTROL AND INTERNAL AUDIT IN THE ENTERPRISE’S MANAGEMENT SYSTEM

Abstract

The key characteristics of internal control and internal audit are investigated and their functional purpose in the enterprise’s activity management system is determined. A critical analysis of the interpretations of internal control from the standpoint of regulatory documents, scientists and practitioners has been carried out. Internal control is considered as a tool of creating information management system developed to prevent, detect and eliminate deviations in financial and economic activities, timely and effective managerial decision-making. In order to find out the substantive nature of the internal audit, its interpretations in regulatory documents and economic literature are given. Internal audit is defined as a form of internal control, performed by a separate service (auditor) to verify the legality and economic feasibility of operations, forecasting, coordinating the activities of the enterprise, assessing the effectiveness of the management system, the quality and reliability of information generated for the relevant categories of users. The comparative characteristics of internal control and internal audit are presented, on the basis of which common features and differences between them were examined, which made possible to identify them separately in the enterprise’s management system. It is emphasized on the need for an organic combination of internal control and internal audit to ensure the effective functioning of business entities.