Risk assessment as a component of the internal control system of the enterprise

Starenka Olha
Lecturer of Accounting and Auditing Department, Odessa National Economic University, E-mail:starenkajaolga@gmail.com, ORCID ID: http://orcid.org/0000-0003-4098-9872

Cite this article:

Starenka O. (2019). Risk assessment as a component of the internal control system of the enterprise. Ed.: D.V. Zavadska (ed.-in-ch.) and others [Otsinka ryzykiv yak komponent systemy vnutrishnioho kontroliu pidpryiemstva; za red.: D. V. Zavadskoi (gol. red.)], Scientific Bulletin of the Odessa National Economic University, No. 9-10 (272-273), pp. 127–145.

Abstract

The article has proved that the current state of enterprise development in Ukraine is characterized by a high level of uncertainty, dependence on internal and external factors, and increased influence of risks on their effective operation. It has been substantiated that this fact necessitates the consideration of new approaches to the organization of a risk management system and the establishment of an effective internal control system for the enterprise as a means of risk identification. The research has analyzed different views of scientists on the risk essence, its influence on the activity of the enterprise and emphasizes that the opinions of researchers have been generated in different approaches to its interpretation and developed towards detailing certain types of risks. The concept of risk assessment has been formulated. It has been noted that risk assessment creates the basis for identifying how risks can be managed. It has been substantiated that determining risks in the system of internal control is of great importance, in particular, it is important for operational control as a form of its organization, influencing the efficiency of economic processes, evaluating their operation and establishing an operational control system so that it is able to reduce the impact of risks on the enterprise performance. The nature of internal and external risks has been clarified. It has been proved that the operational control system should be focused on identifying and assessing internal risks in terms of their impact and likelihood of occurrence. To achieve this, the criteria of risk assessment by directions of influence on the enterprise activity have been developed. Risk assessment based on the criteria of probability of their occurrence and influence on the operational control subjects’ ability to realize the operational goals according to the risk assessment matrix has been proposed. It has been substantiated that to improve the reliability of accounting and reporting information it is necessary to timely predict the risks of displaying business transactions, identify weaknesses in the enterprise management process as well as diagnose manipulations with reporting that can be possible only when creating an effective operational control system that will be able to detect all types of risks and ensure the successful development and stability of enterprises in a competitive environment. The development and implementation of an effective risk management system will enable the enterprise to function steadily in the market and gain competitive advantages despite significant political, economic and social influences.

Keywords

risk, type of risk, risk assessment, internal control system, risk management, operational.

JEL classification: М420; DOI: 10.32680/2409-9260-2019-9-10-272-273-127-145

UD classification: 657.633

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