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International Accounting
 

Internal control of the business process – Financial Risk Management – in an insurance company

Vol. 23, Iss. 1, JANUARY 2020

Received: 23 November 2019

Received in revised form: 23 December 2019

Accepted: 30 December 2019

Available online: 16 January 2020

Subject Heading: AUDIT ACTIVITY

JEL Classification: G22, M41, М42, M49

Pages: 94–109

https://doi.org/10.24891/ia.23.1.94

Turgaeva A.A. Astrakhan State Technical University (ASTU), Astrakhan, Russian Federation
a_turgaeva@mail.ru

https://orcid.org/0000-0002-8374-1706

Subject Setting up the internal control mechanism is a multi-tiered process, which, if properly designed, will have a positive impact on the management efficiency, provided risks are not only identified, but also eliminated and prevented. Monitoring and control shape what activities should be undertaken to mitigate risks on the basis of current information, qualitative and quantitative analysis of risks.
Objectives The study substantiates the mechanism for internal control of financial risk in an insurance company. I also conduct the internal control of Rosgosstrakh Insurance Company, focusing on financial risk management.
Methods The study relies upon techniques and methods for economic analysis, statistical analysis, systems and comprehensive approaches to examining analyzable indicators.
Results I detected key types of risks the insurance company is exposed to, including the risk of public contracts with mala fide suppliers, default under a public contract, internal control of financial risk management. As part of research, I outlined an insurance company check program for financial resource management and prepared a check list so as to strictly pursue goals of the control and document findings.
Conclusions and Relevance Being a key business process in an insurance company, financial risk management is important, influencing the performance of the insurance company. Thus, proper and effective internal control of this activity requires a responsible approach and high professionalism. This will reveal the growth potential.

Keywords: internal control, insurance company, financial risk, audit, checklist, efficiency

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