Economic sciences / 7. Accounting and Auditing

Mariia Nezhyva, postgraduate

Kyiv national university of trade and economics, Ukraine

Specifics organization audit effectiveness of formation financial reserves

Market relations require new approaches to business management and trading business. During the last years the importance of audit is growing steadily, confirming orders and increased audits and increase their average value. Besides increasing professionalism of auditors, as evidenced by the use of effective tools fullness obtain audit evidence and formulate unbiased opinions. Similarly needs to change and improve the organization audit, including audit effectiveness of formation financial reserves of trade enterprises, compliance with the requirements the market economy, as well as audit effectiveness of formation financial reserves made in order to develop reasonable proposals to improve the effectiveness of formation financial reserves of trade enterprises.

Organization audit effectiveness of formation financial reserves of trade enterprises is a set of audit procedures at all stages of audit, that assess the activity of trade enterprise as a whole, and the formation financial reserves in particular, and formulate objective conclusions and recommendations.

Organization audit effectiveness of formation financial reserves involves determining goals, objectives and stages of the audit.

The purpose of audit effectiveness of formation financial reserves of trade enterprises is the assessment to achieve planned goals, identify problems in the task and proposals for improving the efficiency of formation financial reserves of trade enterprises.

The main task of audit effectiveness of formation financial reserves of trade enterprises:

· assessment the components of audit effectiveness of formation financial reserves;

· test the feasibility and legality of transactions with financial reserves and evaluation of the results;

· assurance on selected economic mechanism of formation financial reserves;

· recommendations for improving the management activities of trade enterprises to address shortcomings and irregularities in the process of financial reserves and develop more effective ways of their formation.

Stages of audit effectiveness of formation financial reserves provides: planning; the inspection; preparation of the report; control.

Planning of audit effectiveness of formation financial reserves is one of the essential steps consisting in determining the strategy and tactics, volume testing, and an overall plan and develop a program audit.

Audit effectiveness of formation financial reserves held usually continuous way, but given the complexity of this process, the customer may decide to conduct random checks auditor existing financial reserves. Finally, guided by the requirements of ISA 530 «Audit sampling» [1, p. 463-481], which examines the use by auditor non-statistic and statistical sampling in the design and selection of audit sampling, performing tests of controls and substantive testing, and evaluating the results.

ISA 320 «Materiality in planning and performing an audit» [1, p. 330] states that materiality is subject to the auditor's judgment and depends on understanding the needs of users of financial statements in the financial information.

Audit risk consists of inherent risk, control risk and detection risk. The higher the rating the internal risk and control risk, the more audit evidence the auditor has obtained. The issue of materiality and audit risk is closely related to the concepts of «error», «deception» and «fraud».

Step immediate of audit effectiveness of formation financial reserves includes:

· gathering information and evidence on the financial reserves to obtain audit evidence;

· systematization and development of audit evidence;

· design and ordering documents forming efficiency audit of financial reserves.

The purpose of this phase is to collect necessary data and evidence of financial reserves in accordance with the objectives of program and their evaluation in terms of compliance with certain requirements and criteria of legality, efficiency goals.

The next stage of audit effectiveness of formation financial reserves is to prepare the report. Report on the audit effectiveness of formation financial reserves is the final document, which outlines the main results of the control measures, along with the findings, suggestions, recommendations. An important feature of the audit report is the benefits that it brings to improve the management and decision-making, and to improve the utilization of funds.

Once all of the recommendations are checked their progress and preparing a report for the audit effectiveness of formation financial reserves, depending on the chosen form of inspection, the content of which may be different, and that displays not only identified deficiencies in implementing the recommendations, but also advantages.

Thus, the organization audit effectiveness of formation financial reserves is a set of audit procedures at all stages of the audit to assess the activity of trade enterprise as a whole, and the formation of financial stocks in particular, and formulate objective conclusions and recommendations. Prospects for further research is the development and improvement of audit effectiveness of formation financial reserves using information technology to facilitate the identification of existing deficiencies and develop measures to address them.

References:

1. Handbook of International Quality Control, Auditing, Review, Other Assurance and Related Services Pronouncements. Edition Part І. – New York: International Federation of Accountants, 2010 – 852 p.