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Internal control in ensuring reliability and minimization of risk of misstatement in financial statements

Vol. 19, Iss. 24, DECEMBER 2016

Received: 25 July 2016

Received in revised form: 2 September 2016

Accepted: 20 September 2016

Available online: 23 December 2016

Subject Heading: ACCOUNTING SYSTEMS ADAPTING

JEL Classification: M41

Pages: 50-64

Kos’ke M.S. Plekhanov Russian University of Economics, Orenburg Branch, Orenburg, Russian Federation
koske@mail.ru

Voyutskaya I.V. Plekhanov Russian University of Economics, Orenburg Branch, Orenburg, Russian Federation
voyutckayaIV@mail.ru

Mishuchkova Yu.G. Plekhanov Russian University of Economics, Orenburg Branch, Orenburg, Russian Federation
mishuchkova@mail.ru

Subject The basic determinants in the internal control system’s organization are ensuring reliability and mitigating the risk of misstatement in financial statements. A system of internal control should rely on existing achievements in the theory and practice of accounting and the best domestic and foreign practices of management in general.
Objectives The aim of the study is to systematize approaches to the organizational aspects of internal controls focused on providing reliability of financial statements by means of mitigating the risk of misstatement.
Methods The methodological basis of the research is scientific publications of domestic and foreign scholars on internal control, financial accounting and reporting. The study employs general scientific and special methods, including abstraction, specification, comparison, analogy, typology and content analysis.
Results We provide a schematic generalization of legal, information and methodological support to the system of internal control. The paper offers our own definition of reliability of financial statements term, and an integration model to mitigate risks affecting the reliability of financial statements. The findings may be useful for developing the local regulations on internal control at the level of economic actors.
Conclusions The offered integration model to mitigate risks affecting the reliability of financial statements by means of internal controls rests on the synthesis of provisions of national professional standards and ISO requirements.

Keywords: internal control, reliability, minimization, risk, financial statements

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