Economic sciences / 7. Accounting and Auditing

Anna Shavliuk, postgraduate

Kyiv national university of trade and economics, Ukraine

The criteria for effectiveness audit of the business partnership in trade

 

Considering the efficiency audit of business partnership the crucial component of verification is to determine the correct audit criteria. It reflects the normative criteria (desired) level of control for the unit to be audited and provide conditions for understanding the results of the audit.

The criteria reflect the qualitative description of the phenomenon (system) that is evaluated and serve as a measure of achievement goals. Indicators reflect different quantitative measuring of the test. The main objective of the criteria is to show that the result in the audited facility or activity check is evidence of effectiveness.           A. Mamyshev [1, p.44-45 ] offers the following criteria:

• local – criterion used in assessing the performance of individual chain system;

• integrated – criteria which is a combination (sum or product) of local criteria;

• universal – the only criterion is based on the ranking criteria which reflects the overall goal of the system.

Based on the specific characteristics of the efficiency audit of the business partnership we consider that the above criteria are not able to fully cover the subject of our study and we propose to apply a common classification criteria of efficiency audit of the business partnership :

• credit history and status of accounts payable,

• securities and other financial instruments,

• construction in progress,

• trademarks, marks and other "own" intangibles,

• goodwill,

• duration of operation activity in the market.

For better understanding the nature of the above criteria consider it appropriate to cite a classification based on the audit objectives :

1) the criteria that characterize the direct results of the test objects (credit history and status of accounts receivable, securities and other financial instruments, construction in progress, trademarks, signs and other "own" intangible assets)

2) criteria that reflect the final results of their social activities (business reputation and goodwill in the market operation duration).

The disclosure in the case of detailed data on receivables and payables, emphasis will be placed on accounts receivable, because the auditor will have to establish its nature and adequacy of the data presented in the financial statements. Information requiring disclosure, such as details of the company's credit history will be checked for service "Ukrainian Bureau of Credit Histories" [2] or in other ways available to the auditor within the law.

Expanding the criterion of securities and other financial instruments, the auditor has to assess the actual availability of tools and evaluate their compliance cost, compared with in the financial statements. Getting the right information confirming he/she will get by submitting a formal request in writing form to the National Commission on Securities and Stock Market [3] by the right to obtain information as a third part.

Information on construction in progress should be highlighted in the context of "a need - the costs incurred", so the money than had been spent should be analyzed according to three criteria of efficiency audit .

Analysis of the availability and cost estimation brands, trademarks and other intangible assets is intended to test and verify whether the company inflated the value of assets and help to understand the "price" of the company.

Criteria such as termes of functional operation in the market and goodwill, certainly in view of its cost equivalent are needed to understand the strategies of potential business partner in the market and its reliability in the socio-economic aspect.

If the actual performance areas audited and the audited object or activity are  responsible to the established criteria or exceed them, it means that the work is carried out with reasonable efficiency. These criteria also should be relevant, reliable, neutral, accurate and understandable.

The basis for the selection criteria are:

• standards developed by recognized professional organizations,

• generally accepted rules that govern the practice,

• standards set by organizations that are checked,

• tools created specifically for this test by adapting the criteria that were used in the similar checks or developed on the basis of standards and methods used by other organizations with similar activities,

• materials from previous audit.

For effective functioning and implementation of the above provisions efficiency audit of the business partnership the first need is to create the correct regulatory and methodological background.

Thus, the efficiency audit of the business partnership designed to provide reliable information on the effectiveness and appropriateness of the use of funds described by the extent to which the goals and methods of achieving and potential impact. Through the development of the above criteria and their application during this audit can be found problem areas in a financial resources management in future and at least to make it possible to minimize the risk of mistakes and find the optimal business partner.

 

Literature

1.                  Mamyshev A.V. Effectiveness of the audit: Stage performance // Financial control. – 2006. -– ¹ 3 (32). – p. 43-45.

2.                  International Bureau of Credit Histories (IBCH). – Resource Access: https://credithistory.com.ua/ru/

3.                  Official Site of the National Commission on Securities and Stock Market [electronic resource]. – Resource Access: http://www.nssmc.gov.ua/