Structuring the Organizational Issues of Internal Control: The Theoretical Aspect

Issues of internal control are closely linked with accounting and analysis, constituting an integral component of the company management. It is assumed that proper organization and understanding of the internal control methodology at company level can enhance the company’s performance, reduce business risks and increase the company’s competitiveness. This assumption requires a comprehensive approach to analyses of the theoretical foundations of internal control as a component of the control system at company level. Essential issues of organizing internal control at company level are elaborated. An extended review of definitions and interpretation of internal control by scientists-economists is made. It is emphasized that because internal control constitutes a component of the management process at company level, its organization is company-specific. The following directions of internal control are defined and justified: internal control of the management processes’ conformity with the statutory norms; internal control of maintenance and effective utilization of the company’s assets; internal control of the functional performance of company’s staff; technical (technological) internal control; internal control of the management system operation; other directions of internal control. A classification of entities in charge of internal control at company level is given. Methods used by the internal control system and the status of internal control in the system of company’s management functions are highlighted.