The comparative analysis of organizational and methodological aspects of internal control in Ukraine and Western Europe.

In modern conditions, any company functions in heavy conditions of the competitive environment. Its activity should be directed at conquering and keeping the major part of the market, achieving dominancy over the competitors, that is provided to the most part by the efficient organization of the control system at the company.

The internal control system at the company has to be oriented at providing the main following parameters of functioning efficiency in the modern conditions: in the firm state of the company at the markets; in the modern adaptation of the production and organization of management systems to the dynamic outer environment (market conjuncture).

The basis of inner control system is being the informational provision of the control activity, which includes operational, planned, normative and inquiry information, classifiers of the technical and economic information, the systems of documentation (unified and special).

The key information for the inner control system is being the information of the control management object level, i.e., the information invisibility of this object in order to have the possibility of taking efficient management decisions (object management). The quality of information in the system of the inner control is determined by such criteria, as sufficiency, reality, timeliness, and analyticity.

These and many other tasks determine the creation of the efficient inner control system at the company. Besides, the organization of the inner control allows decreasing expenses for the outer audit. The most important place in the company management system is taken by the control of strategic decisions. This means the clarification of the fact, to which rate taking the decisions leads to achieving the aims of the company. Practically, this means forming the modern controlling system of management.

The word controlling derives from the English “to control” – to control, manage, which, in its turn, derives from the French word meaning the register, the check list. But ironically, in English sources, in Great Britain and the U.S.A., such term as “managerial accounting” or “management accounting” has been rooted; and the professional organization of controllers in the USA – the “Controllers Institute of America” was renamed in 1962 to the “Financial Executives Institute”. The word per word translation of these terms as “managerial accounting” is not quite correct, as the managerial accounting is being the basis for controlling.

The concept of controlling has been developed in the 80s years as the method for the active prevention of critical situations triggering the company to bankruptcy. The principle of this concept, which has got the name “managing by deviations”, is being the operational comparison of main planned (normative) and factual indicators with the goal of revealing deviations among them, and the determination of interrelation and dependencies of these deviations at the company with the aim of acting in the key normalization factors of activity.

The controlling presents the combination of methods of the operation and strategic management: the accounting, planning, analyzing and controlling, unified at the qualitatively new stages of market relations to the single system, the functioning of which has been subjected to the exact aim.

The synthesis of the financial and productive accounting and the information system allow at the first stage of management to take decisions, being oriented at the perspective; the possibility for the active realization and expenses’ management appear. The coordination of marketing, controlling, finances and information services allow creating the single management and information system with the goal of providing the long-term company existence.

In Ukrainian companies, the bigger incline to using the operational controlling dominates; it is oriented at achieving efficient short-term goals, and it controls such indicators, as: profitability, expenses, and productivity. And besides all, the main goal for building the controlling system abroad is being the increase of the company’s value in investors’ and auctioneers’ interests. The control role is not only to fix financial results and provide the management with the necessary information to ground managerial decisions, but as well to concentrate at long-term money flows, evaluate results of the company’s activity deriving from the cost indicators, from the viewpoint of investing money resources.

The characterizing feature of controlling in the European practice determines its following functions and tasks: а) consulting and coordinating the budget process; b) consulting and coordinating the strategic planning; c) consulting and coordinating the long-term planning; d) managing calculations of expenses/results; e) managing the inner information service; f) consulting and coordinating the investments’ planning; g) conducting the special economic surveys.

In the German management concept, “controlling” (as a more wider meaning) includes the “managerial accounting”, and in accordance with the American approach, the “managerial accounting” is being equal to the German “controlling” and includes its functions that concern developing the strategy of the company management. The managerial accounting, as it is known, - is, first of all, the strategic accounting related to producing the control indicators’ system and distribution of the responsibility among the accounting centers.

In the German model of controlling, the complex of tasks for planning and usage of the integrated system of planned and control calculations, basing on the managerial accounting system, has been made the primary one. That is why, in the European system, “controlling” – is exceptionally the inner accounting and reporting. While organizing the controlling and finance departments, the primary division of tasks at inner and outer ones is occurring. At the response of the controlling department, only the results’ oriented tasks of information provision, setting plans, control and inner accounting are left.

The European controlling, as well as the American one, foresees the execution of the additional services list. However, the bookkeeping accounting, the preparation of balance-sheet, tax and insurance accounting are not included to this list, as these tasks are performed by the finance department. Also, the German model of controlling does not foresee any revisions.

The controlling, as the tool for business management, has been recognized and used in all the developed countries of the world. In the conditions of the world economics globalization, the active transfer of stocks from one country to the other one is happening. For example, at the automobile markets with the Japanese stock located in the USA, the tools of controlling developed in Japan are actively used; and in EU, there are the tools that have proved their efficiency in the USA. As a result, the mutual beneficiation becomes the best in the region, though, to the full extent, the national differences, that are being the important factor of increasing the efficiency of its usage, are considered as well.

The results of the comparative analysis of international companies’ achievements show that the usage of the controlling potential increase the management performance, by the fact that the main part of the effect is provided in the sphere of production due to the innovations related to the implementation of controlling.