INVENTORIES AS OBJECT OF INTERNAL CONTROL (EVIDENCE FROM THE ENTERPRISES OF CONSUMER COOPERATION)

Abstract

Inventory management as an administrative process is based on the accounting and analytical maintaining for
the stocks’ movement. Such information is important to monitor the compliance of relevant internal and external regula-
tions. National and international practice of internal control of inventory is analyzed in case of consumer cooperatives in
this research. Methodological and organizational approaches of internal control are revealed as the information base for
internal audit of effectiveness the operations. Format of accounting and analytical providing for the operations of invento-
ries within statutory activity of consumer societies with the requirements as to balance their business activities is studied.
Accounting and analytical maintaining of the operations with stocks is offered to use like a knowledge base for internal
control and internal audit in accordance to the stages of movement the inventories. Relevant to International Standard on
Auditing ISA 315, internal control isn’t an identification or form of internal audit, it functions as a specific component of
this audit. The article recommends using sufficiently transparent, simple and detailed sequence of stages of internal control
like defining objectives to control, assessment of controls, procedures of control and tests for confirmation of study. Interna-
tional auditing standards define the internal audit following to the areas of internal control. However, the key word in this
meaning is evaluation: the evaluation of effectiveness business’ management; the evaluation of legitimacy and reliability of
financial reports; the evaluation of accounting accuracy (financial audit); the evaluation of regulations compliance (compli-
ance audit). The problem of internal audit operations is revealed in the work by the example of operations with inventories.