Theoretical substantiation of a business entity internal control organization

Yulia Klius
Doctor of Economics, Professor, Head of Accounting and Taxation Department, Volodymyr Dahl East Ukrainian National University, Ukraine, e-mail: docentklus@gmail.com, ORCID ID: https://orsid.org/0000-0002-1841-2578

Anzhelika Izhboldina
Postgraduate Student of Accounting and Taxation Department, Volodymyr Dahl East Ukrainian National University, Ukraine, e-mail: izhboldinaanzhelika1992@gmail.com, ORCID ID: https://orsid.org/0000-0003-3580-2305

Cite this article:

Klius, Yu., Izhboldina, A. (2019). Theoretical substantiation of a business entity internal control organization. Ed.: M. Zvieriakov (ed.-in-ch.) and others [Teoretychne obhruntuvannia orhanizatsii vnutrishnoho kontroliu subiektiv hospodariuvannia; za red.: М. I. Zvieriakova (gol. red.) ta in.], Socio-economic research bulletin; Vìsnik socìal’no-ekonomìčnih doslìdžen’ (ISSN 2313-4569), Odessa National Economic University, Odessa, No. 2-3 (70-71), pp. 118-128.

Abstract

The article systematizes and provides of «internal control» concept definition (a powerful mechanism of measures or approaches aimed at the of development and implementation effectiveness of management decisions at the enterprise with the purpose of comprehensive and impartial control at a certain level to ensure receipt (increase) of income or improvement (stabilization) of enterprise’s financial condition). The main elements of the current system of internal control (the internal environment, subjects and objects of internal control system, means of internal control, internal control functions) are generalized and such a separate element as an «external environment» is highlighted. A number of factors that influence on internal control of large, medium and small enterprises (the composition of organizational structure, the volume of activity, the attitude of the company’s management to internal control, financial position of the enterprise) are determined. The main functions of internal control (information, diagnostic, communication, evaluation function) are systematized and a combined function of internal control, such as coordination and corrective, is proposed, which will allow for timely and efficient management control at the enterprises. Key tasks (ensuring the legality and reliability of information reflection in accounting, the reasons for deviations identifying and establishing in the process of economic activity, monitoring compliance with the established regulatory support of structural units, assessing the final results of the whole team, making managerial decisions for organization effective work) are defined, which influence at the enterprise management efficiency.

Keywords

system; function; management efficiency; management mechanism; internal environment; enterprise; control; tool; communication; state; activity.

JEL classification: M420; DOI: https://doi.org/10.33987/vsed.2-3(70-71).2019.118-128

UD classification: 658:338

This work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

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