Audit of consolidated financial statements of the government as a tool for ensuring state transparency

Slobodianyk Yuliia
Doctor of Economics, Professor of the Audit Department, Kyiv National Economic University named after Vadym Hetman, Kyiv, Ukraine, E-mail:slobodyanik.julia@kneu.edu.ua, ORCID ID: https://orcid.org/0000-0002-5838-2342

Cite this article:

Slobodianyk Yu. (2024) Audit of consolidated financial statements of the government as a tool for ensuring state transparency. Ed.: V.V. Kovalenko (ed.-in-ch.) and others [Audyt konsolidovanoi finansovoi zvitnosti uriadu yak instrument zabezpechennia prozorosti derzhavy; za red.: V.V. Kovalenko (gol. red.)], Scientific Bulletin of the Odesa National Economic University (ISSN 2313-4569), Odesa National Economics University, Odesa, No. 10 (323), pp. 36-44.

Abstract

The purpose of the article is to study the current state and prospects for the implementation of the audit of the government's consolidated financial statements to ensure its transparency. The research methodology is based on the application of a systemic approach using content analysis, induction, deduction, comparison, and generalization. It is determined that the government's consolidated financial statements combine financial information about all government institutions, agencies, and organizations, allowing a holistic view of the state's financial condition and operational results. The audit of such reporting serves as an objective verification mechanism that contributes to increasing the trust of citizens, investors, and international partners. In the course of the study, problems related to the lack of unified consolidated financial reporting at the government level were identified. Consolidated financial reporting at the state level is still fragmented and does not disclose complete information about the government's financial condition and performance, which is contrary to the requirements of standards and best practices. The Accounting Chamber has a well-developed methodology for conducting financial audits of consolidated financial statements but little experience in conducting financial audits according to the methodology of INTOSAI standards. As a result, recommendations have been substantiated, and the implementation of these will speed up the process of introducing the audit of government consolidated financial statements. From a practical point of view, the implementation of these recommendations will allow the government to organize the process of preparing the consolidated financial statements according to the requirements of international standards. Financial auditing of such reporting by the Accounting Chamber in accordance with the requirements of the INTOSAI Framework of Professional Pronouncements, as well as its subsequent publication, together with the audit report, will significantly increase the transparency of the public administration system.

Keywords

consolidated financial reporting, public sector entities, public finance management system, audit, Accounting Chamber,trust, transparency.

JEL classification: M420; М480; DOI: https://doi.org/10.32680/2409-9260-2024-10-323-36-44

UD classification: 657.6

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