СИСТЕМ ИНТЕРНЕ КОНТРОЛЕ У ФУНКЦИЈИ УНАПРЕЂЕЊА ФИНАНСИЈСКОГ ИЗВЕШТАВАЊА ПРЕДУЗЕЋА
INTERNAL CONTROL SYSTEM IN THE FUNCTION OF IMPROVING THE COMPANY’S FINANCIAL REPORTING

Author(s): Biljana Jovković
Subject(s): Business Economy / Management, Financial Markets, Accounting - Business Administration
Published by: Savez računovođa i revizora Republike Srpske
Keywords: internal control system; control activities; financial reporting;
Summary/Abstract: Adequately designed internal control that functions properly is crucial for the successful operation of a company. Considering that there is no single internal control system that would suit all companies, the company strives to develop an internal control system that acts as a mechanism that ensures that the company’s business activities are carried out in a planned and prescribed manner. In the context of financial reporting, internal control should provide reasonable assurance about the reliability of financial statements and prevent fraudulent financial reporting. Therefore, internal control is equally important for both management and audit bodies. The subject of the paper will be an assessment of the quality of internal control, as the basic and most important form of control in a company, and its contribution to financial reporting. The main objective of the paper is to obtain relevant knowledge that will indicate the impact of internal control in increasing the quality of a company’s financial reporting. Controls will be analyzed for segregation of duties, controls to prevent access by unauthorized persons, ensuring double-checking of business operations, and all other prescribed measures, methods, and procedures, the aim of which is to ensure that daily operations are conducted in a manner that ensures compliance with the law, good business practices, as well as the prevention of errors, misconceptions, and dishonest intentions. The results of research into the role of internal control in improving corporate financial reporting will be presented, as well as the limitations of the research conducted and recommendations for improving internal controls.

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