Economics and management of national economy

Public internal financial control reforming in Ukraine: conceptual foundations and practices

Economic Annals-XXI

Economic Annals-ХХI: Volume 165, Issue 5-6, Pages: 60-65

Citation information:
Dikan, L., Deineko, Ye., & Kalinkin, D. (2017). Public internal financial control reforming in Ukraine: conceptual foundations and practices. Economic Annals-XXI, 165(5-6), 60-65. doi: https://doi.org/10.21003/ea.V165-13

View Full-TextDownload PDF

Larysa Dikan
PhD (Economics),
Professor,
Simon Kuznets Kharkiv National University of Economics
9-A Nauky Ave., Kharkiv, 61166, Ukraine
hneu_audit09@ukr.net
ORCID ID: http://orcid.org/0000-0003-4107-3508

Yevhen Deineko
PhD (Economics),
Associate Professor,
Simon Kuznets Kharkiv National University of Economics
9-A Nauky Ave., Kharkiv, 61166, Ukraine
deynekoev@gmail.com
ORCID ID:http://orcid.org/0000-0002-8025-0178

Dmytro Kalinkin
PhD (Economics),
Lecturer,
Simon Kuznets Kharkiv National University of Economics
9-A Nauky Ave., Kharkiv, 61166, Ukraine
dm86kalinkin@gmail.com
ORCID ID: http://orcid.org/0000-0002-3752-6255

Public internal financial control reforming in Ukraine: conceptual foundations and practices

Abstract. Introduction. In the conditions of crises, the availability of effective public financial control is a primary need for the state.

The purpose of the research is theoretical justification of conceptual principles of public internal financial control and development of guidelines for the implantation of public internal financial control in the modern system of public financial control in Ukraine.

Results. The authors of the article have examined basic elements of the present public financial control and presented a critical analysis of the relevant issues. The article determines the place of internal control in the public financial control system and proves the necessity of public internal financial control via using official statistics data of public internal financial control.

According to the official data for the last 9 years, a rapid decline in the total number of audits in Ukraine from 17,563 in 2007 to 2,668 in 2016 is observed. In this regard, the year 2014 stands out. A sharp increase in the number of audits up to 24,000 marked that year, which was primarily due to a large number of audit controls of public procurement, which were probably initiated because of the aggravation of the political situation, connected with the changes in the government. This explains why the figures of 2014 should be considered as not a tipical one.

The conducted research covers the main approaches to public internal financial control. The basic problems of reforming the current public financial control system are formulated.

Conclusions. The authors of the article have developed proposals related to the development of the internal financial control system in the public financial control in Ukraine, namely the guidelines concerning the implantation of public internal financial control in the modern public financial control system in Ukraine, as well as successive stages of reforming public internal financial control at three independent levels.

Keywords: Internal Control; Public Financial Control; Public Internal Financial Control; State Audit Service of Ukraine

JEL Classification: G28; P43

DOI: https://doi.org/10.21003/ea.V165-13

References

  1. Basantsov, I. (2014). Modernisation of state financial control system of Ukraine. Economic Annals-XXI, 1-2(1), 78-81.
    Retrieved from https://ea21journal.world/index.php/ea-v137-20/ (in Ukr.)
  2. Hlushchenko, V., & Khmelkov, A. (2012). Financial control in Ukraine: vectors of development. Finansy Ukrainy (Finance of Ukraine), 6, 97-103 (in Ukr.).
  3. Ivanytska, O., & Chumakova, I. (2011). New public management theory and its application in the modernization of public financial control. Finansy Ukrainy (Finance of Ukraine), 5, 68-77 (in Ukr.).
  4. Natarova, O. (2015). Assessment of the state financial control condition in the public sector. Economic Annals-XXI, 1-2(1), 106-109.
    Retrieved from https://ea21journal.world/index.php/ea-v147-26/ (in Ukr.)
  5. Pikhotskyi, V. (2014). The state financial control in Ukraine: problems of regulatory support. Economic Annals-XXI, 11-12, 57-60.
    Retrieved from https://ea21journal.world/index.php/ea-v146-14/ (in Ukr.)
  6. Stefaniuk, I. (2009). State financial control: problem identification and definition of. Finansy Ukrainy (Finance of Ukraine), 11, 12-19 (in Ukr.).
  7. Chuhunov, I., & Fedosov, V. (2009). Public internal financial control: strategy of development. Finansy Ukrainy (Finance of Ukraine), 4, 3-12 (in Ukr.).
  8. Futoranska, Yu. (2010). Public Internal Financial Control in Ukraine: Current State and Prospects for Development. Naukovi pratsi NDFI (RFI Scientific Papers), 2(51), 69-76 (in Ukr.).
  9. Chumakova, I. (2013). Improving public internal financial control as an integral part of public administration. Finansy Ukrainy (Finance of Ukraine), 11, 109-126 (in Ukr.).
  10. INTOSAI Professional Standards Committee (1977). The Lima Declaration of Guidelines on Auditing Precepts.
    Retrieved from http://zakon5.rada.gov.ua/laws/show/604_001 (in Ukr.).
  11. The Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2013). Internal Control – Integrated Framework: Executive Summary.
    Retrieved from https://www.coso.org/Pages/ic.aspx
  12. The Cabinet of Ministers of Ukraine (2005). The Concept of Public Internal Financial Control Development up to 2017 (Resolution).
    Retrieved from http://zakon3.rada.gov.ua/laws/show/158-2005-%D1%80 (in Ukr.)
  13. The State Audit Service of Ukraine (2017). Official web-site.
    Retrieved from http://www.dkrs.gov.ua/kru/uk/publish/category/108789 (in Ukr.).
  14. The Verkhovna Rada of Ukraine (2010). Budgetary Code of Ukraine. Law of Ukraine.
    Retrieved from http://zakon3.rada.gov.ua/laws/show/2456-17 (in Ukr.)
  15. The Verkhovna Rada of Ukraine (1993). On Basic Principles of Public Financial Control in Ukraine. Law of Ukraine.
    Retrieved from http://zakon4.rada.gov.ua/laws/show/2939-12 (in Ukr.)
  16. The President of Ukraine (2011). On the Regulation of Public Financial Inspection of Ukraine. Decree of Ukraine.
    Retrieved from http://zakon4.rada.gov.ua/laws/show/499/2011 (in Ukr.)
  17. The Cabinet of Ministers of Ukraine (2016). On Approval of the State Audit Service of Ukraine. Decree of Ukraine.
    Retrieved from http://zakon3.rada.gov.ua/laws/show/43-2016-%D0%BF (in Ukr.)
  18. Report From The Commission To The European Parliament, The Council And The Court Of Auditors (2016). 2015 Annual Management and Performance Report for the EU Budget.
    Retrieved from http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52016DC0446
  19. European Commission (2011). Compendium of the public internal control systems in the EU Member States 2012.
    Retrieved from http://ec.europa.eu/budget/library/biblio/publications/2011/compendium_27_countries_en.pdf
  20. The Ministry of Finance of the Republic of Kosovo (2015). Public Internal Financial Control Strategy 2015-2019.
    Retrieved from http://www.kryeministri-ks.net/repository/docs/Public_Internal_Financial_Control_Strategy__2015-2019.pdf
  21. Lusha, A., Mziu, Xh., & Brahimi, F. (2015). Financial management in the public sector. European Scientific Journal, 11(7), 186-197
    Retrieved from http://eujournal.org/index.php/esj/article/viewFile/5315/5124
  22. Kafia, A. (2015). Public Internal Financial Control. Evidence from Albania. European Journal of Economics and Business Studies, 2(1), 144-154.
    doi: https://doi.org/10.26417/ejes.v2i1.p144-154
  23. Popa, I. G., & Nasta, N. L. (2016). Study On The Public Financial Control In Romania. Revista Academiei Fortelor Terestre, 86(1), 77-85.
    Retrieved from http://www.armyacademy.ro/reviste/rev1_2016/POPA.pdf
  24. Vašiček, V., Dragija, M., & Hladika, M. (2010). Impact of Public Internal Financial Control on Public Administration in Croatia. Theoretical and Applied Economics, 545(4), 71-86.
    Retrieved from https://www.researchgate.net/publication/46567517_
    Impact_of_Public_Internal_Financial_Control_on_Public_Administration_in_Croatia
  25. The Institute of Internal Auditors (2013, January). IIA Position Paper: The Three Lines Of Defense In Effective Risk Management And Control.
    Retrieved from https://na.theiia.org/standards-guidance/Public%20Documents/PP%20The%20
    Three%20Lines%20of%20Defense%20in%20Effective%20Risk%20Management%20and%20Control.pdf
  26. Anderson, D. J., & Eubanks, G. (2015). Leveraging COSO Across the Three Lines of Defense. Committee of Sponsoring Organizations of the Treadway Commission (COSO).
    Retrieved from https://www.coso.org/Documents/COSO-2015-3LOD.pdf

Received 4.06.2017

View Full-TextDownload PDF
In, , , ,

More Papers