INTERNAL CONTROL AT ENTERPRISES IN THE ANTI-FRAUD SYSTEM: DEVELOPMENT OF A CONCEPTUAL MODE

Abstract

The conducted research highlights the necessity of forming an effective internal control system as a powerful tool for detecting and preventing fraud. It is established that financial fraud in the business environment exists in various forms and affects the financial security, stability, and overall value of the enterprise. Financial losses from fraud constitute a significant amount, and their impact on business reputation, which is difficult to restore, is substantial. Three main categories of fraud are outlined: asset misappropriation, falsification of financial reporting, and corruption. In global practice, the most costly is fraud related to financial reporting. In Ukraine, corruption and bribery remain the main types of economic crimes. The analyzed statistics of fraudulent schemes underscore the widespread prevalence of financial fraud and its growth in Ukraine and globally. Modern tools and measures aimed at detecting and preventing financial fraud have been investigated, including internal control, auditing, information security, ethical codes, monitoring, expert engagement, establishment of violation reporting channels, regulatory frameworks, legal support, education, and the development of corporate culture. The research proposes the use of a conceptual model of internal control in the fraud detection system, which includes components that contribute to the creation of an effective control system within the enterprise. These components encompass defining the purpose and objectives of control, formulating fundamental control principles, selecting control indicators, establishing a hierarchy of control levels, determining methods for measuring goal achievement, as well as shaping internal regulatory documents and provisions. To enhance the methodology of internal control, it is proposed to employ a methodical-organizational model of internal control, which helps systematize and organize internal control methods for the effective detection and prevention of financial fraud. The conducted research has led to the conclusion about the importance of internal control as an effective tool for identifying, assessing, and preventing financial fraud in enterprises, as well as the formation of a comprehensive system of internal control. In this context, a concept of internal control is proposed. The study outlines perspectives for further research, including the effectiveness of implementing internal control concepts in various types of enterprises, the use of information technologies and their role in internal control, the relationship between internal control and financial fraud risks, and the development of recommendations for optimizing internal control systems in enterprises.