ORGANIZATIONAL AND METHODOLOGICAL ASPECTS OF INTERNAL AUDIT IN PUBLIC ADMINISTRATION

Resumo

Background: This article traces the transformation of internal financial audits into internal audits within public organizations in the Russian Federation. The need for such a transformation became apparent after Russia’s higher external audit bodies assessed the achievements of federal executive authorities in internal financial auditing and its impact on the efficiency and effectiveness of budgetary funding. Objective: The study aims to examine both organizational and methodological aspects of this transformation. The study focuses on establishing a comprehensive model integrating internal financial audit, internal financial control, departmental control, and founder’s control systems within the framework of sustainable development concepts. Methods: The research presents the architecture of the internal audit system in public organizations and emphasizes a wide range of activities to ensure its continuous improvement. This approach is based on the principles of cyclicality and ongoing development. The model considers the subject of internal audit to encompass not only the financial activities of public sector entities and assessment of internal control systems but also the achievement of current and strategic development goals, minimization of financial crime risks, and risk-laden business processes under uncertain external and internal conditions. Results: The study introduces a comprehensive model that proposes to harmonize the systems of internal financial audit systems, internal financial control, departmental control, and founder’s control. It extends the scope of internal audit beyond financial analysis to include evaluating the achievement of operational and strategic objectives, minimizing financial risks, and managing risky business processes amid uncertainties. Conclusions: The research conclusions could be useful for public organizations in developing an effective internal audit system. The proposed model not only enhances financial auditing and control but also aligns these processes with the broader objectives of sustainable development and strategic risk management.