ADVANTAGES AND DISADVANTAGES OF AUDIT MODELS OF NON-BANKING INSTITUTIONS AND THEIR CURRENT DEVELOPMENT IN UKRAINE

Abstract

It is substantiated that in the current conditions of the development of the financial market in Ukraine, the role of audit has become increasingly significant, especially in the field of non-banking financial institutions – insurance companies, financial companies, leasing, factoring organizations, pension funds, pawnshops, microfinance organizations and others. These institutions play an important role in ensuring financial inclusion, lending to the economy and expanding financial services, but they are also exposed to high risks – operational, market, legal and reputational. That is why effective audit models are critical to increasing transparency, trust and stability of the non-bank financial sector. The article analyzes modern models of organization of audit companies. It is determined that the global audit market operates mainly within three basic organizational models: integrated global networks of the "Big Four", international associations and alliances, and specialized companies. A comparison of key criteria of integrated models of the "Big Four", international associations and alliances as well as specialized companies was carried out. Based on this, the strengths and weaknesses, advantages and disadvantages that companies receive to enhance audit quality were identified. Additional requirements from the market regulator – the National Bank of Ukraine – for auditors' reports and the classification of all entities by degree of public importance and, accordingly, the list of accredited audit companies for each group of entities are disclosed. The article examines current and future transformations in the audit sector under the influence of digitalization tools (artificial intelligence), business unbundling, i.e. technical re-equipment and organizational improvement of business operations. The digitalization tools that have been implemented in the practical field of auditing non-banking institutions are revealed. The scope of technological changes under the influence of artificial intelligence is outlined, which in practice has increased the quality of the audit and changes in legislative requirements, which have increased the independence of auditors, that is, limited the influence of the human factor when performing the audit. The effectiveness of an audit firm is measured not only by its profit, but also by the quality of the audit (the ability to detect errors) and independence (the ability to report them honestly).