Vidaus kontrolės elementai ir jų vertinimas
Assessment of elements of internal control

Summary/Abstract: Internal control system – a set of coordinated methods and means used to meet the goals of a company. The company’s financial results, its business continuity and development opportunities depend largely on the internal control system. Therefore, an internal control system is of high importance to all companies without exception - large, medium, or small. Certainly, it is especially important to have an effective internal control system in companies with complex organizational management structures, using sophisticated production techniques, producing a variety of products, providing a wide range of services, having a lot of production, auxiliary and administrative departments, keeping in touch with multiple partners, suppliers, buyers, and other. However, many executives pay insufficient attention to the internal control system, some of them misunderstand its essence and consider it to be equal to internal audit. In the economic literature exists a variety of different opinions on the efficiency of the internal control system, the development and application of the principles, components, evaluation procedures, and etc. Naturally, different aspects of the internal control system have been analysed by many foreign and Lithuanian authors. Yet, not enough attention has been paid to the analysis of components of internal control system. The paper analyses the components of internal control system, their transformation and evaluation. It also presents the main actions of components of internal control system – control environment, the company’s risk assessment, information system, control activities and evaluation of monitoring control procedures – to be carried out by the auditors. It should be noted that, an optimal set of components of internal control system expressed in the form of a triangle is presented as a result of the research. After the value of the internal control system and its role in the system of enterprise management have been identified, it can be concluded that the internal control plays an important role in companies and in their management systems. An analysis of the scientific literature suggests that only effective and well-coordinated, i.e. with a strong and close relationship with other company’s control systems, internal control system has a positive impact on all other control systems of a company. Such result only proves the prevailing view among practicians that a company can successfully compete and pursue strategic goals determined by the executives only if it has an effective internal control system. The scientific analysis has demonstrated that a company’s financial performance, business competitiveness, continuity and development largely depend on the internal control system and the effectiveness of each of its components. A historical analysis of components of internal control system has revealed its transformation from two components – control environment and accounting system – to several differentlynamed components suggested by different authors and institutions. In the present market economy, the most appropriate components of internal control system are considered to be the following: control environment, risk assessment, information system, control activities and monitoring of control processes. Their effectiveness depends on the company’s actions in establishing and maintaining their determined operation and on the objective evaluation by the internal and external auditors.

• Details
• Contents