DEVELOPMENT OF INTERNAL CONTROL IN A PERIOD OF INCREASING UNCERTAINTY: A THEORETICAL DISCUSSION

Abstract

In a period of economic uncertainty, which in the 21 century is only deepening (the spread of the COVID-2019 pandemic, the ongoing war of the Russian Federation against independent Ukraine, the US conducting a “tariff war” against almost all countries of the world, etc.), any business unit of any country in the world does not fully have sufficient information about its own business future. One of the highest levels of uncertainty is experienced by business entities that continue to operate in Ukraine in conditions of prolonged active hostilities. A review of scientific publications, as well as the content of statistical information, proves that this problem currently remains unresolved. The purpose of the article is to prove the adequacy of building an internal control system for a corporate business entity with a division into a manager’s control subsystem and an owner’s control subsystem, as well as to form a theoretical basis for identifying risks as an object of internal control and determining the place of their control in the overall risk management system. The methodological basis of the study is dialectical, abstract-logical, bibliographic and graphic methods, as well as induction, deduction, analysis and synthesis methods, which are used to determine: the feasibility of revising the internal control paradigm; trends in the development of control of corporate business entities; business entities that are obliged to conduct internal audits; theoretical foundations of internal risk control. The composition of the control system of a corporate business entity is substantiated and cases of mandatory organization and further conduct of internal audits are identified. It has been established that the main direction of development of internal control of business entities is the establishment of risk-oriented control. Obtaining the desired result is in the plane of introducing risk management and creating the necessary conditions for the effective functioning of risk-oriented control. A necessary prerequisite for the proper organization of risk-oriented internal control is the completion of the formation of the theory of risk control. The proposals presented for understanding the nature of economic risk will contribute to understanding the methodology of its control. The implementation of the above proposals will allow: to remove theoretical contradictions in the composition of the corporate control system: to determine the need to organize internal audit subsystems for business entities with a corporate form of management; to complete the formation of the theory and practice of internal risk control; to set priorities in the organization of risk management and risk-oriented control. Prospects for further research will be to determine the principles, methods and tools of information interaction between the internal control systems of the manager and internal audit, to complete the formation of the theory of internal risk control and to determine the trends in the application of information technologies and artificial intelligence in the implementation of risk management.