IMPROVING THE INTERNAL AUDIT OF FINANCIAL ERRORS AND IRREGULARITIES IN BUDGET ORGANIZATIONS THROUGH A RISK-BASED APPROACH

Abstract

The article substantiates the application of a risk-based approach to the internal audit of financial errors and irregularities in budget organizations. The conceptual foundations of this approach are examined on the basis of the COSO ERM framework, the IIA Global Internal Audit Standards, and INTOSAI pronouncements, and the specific features of its application in the public sector are identified. The study demonstrates that periodic, calendar-based risk assessment can be further strengthened by incorporating continuously observable indicators, thereby enhancing the early detection of errors and irregularities. As a result, an integrated system of risk indicators is developed, serving both the early detection of financial errors and irregularities and the comprehensive assessment of risk levels in financial processes. The system covers five domains of budget operations, defines the calculation logic and threshold values for each indicator, and translates the aggregate score into an appropriate audit response.