Contemporary Problems of Social Work
Ways of improving efficiency audit in modern circumstances
Автор/Author: Boboshko I.V.
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Modernisation of state financial control objectively depends on the condition and potency of state financial control, which is currently oriented on one hand towards increasing control efficiency (i.e. efficiency of action, taken by state control officials) and on the other hand towards increasing efficiency of control after the use of financial resources and actions of government bodies. The question of increasing efficiency of state financial control is complex, the answer to which depends on a variety of factors, influencing efficiency: economy, productivity and fecundity. Attention should be paid to fecundity of state financial control, which is viewed just as efficiency of control in two aspects: fecundity of the use of government financial resources and fecundity of control bodies’ actions. It is worth noting that the fecundity component of state financial control, unlike all other components significantly influences the condition of state finances, and therefore it is quite important to review the tendencies of state financial control development in the aspect of increasing its fecundity. 
Activity of state financial control bodies should be aimed not only at control of the legality of managing state resources but also at valuation of rationality and efficiency of budget spending, valuing fecundity of state investment.
This way, implementation and widespread use in activities of control bodies of Russian Federation in efficiency audit will serve improving management efficiency.
Government sector of economics has an array of features, affecting efficiency audit, therefore it is crucial to improve the method of its operation. There is a large number of publications of both Russian and foreign authors about methodology of audit. Authors such as M.A. Azarskaya, O.A. Mironova, V.I. Petrova, R. Adams, A. Arens and others, as well as works, which research the place and importance of efficiency audit as an independent type or as one of the goals of auditing and possibilities of its application during state financial control of such authors as M.V. Melnik, E.I. Ivanova, V.S. Stepashin, etc. Therefore, nowadays it is important to study and use, while adapting to the Russian reality, accumulated experience of state management in budgeting, aimed at results as well as implementing external financial control efficiency audit.
At a modern stage it is crucial to offer objectiveness of control, undertaken in terms of efficiency audit, since the threat of forming subjective valuations and primarily political could be of detriment to all the positive results of current type of control.
As shown by international experience, efficiency audit is a prerogative of government bodies of external financial control, which is why its implementation into the practice of state of financial control requires development of a rigid and objective system of bodies of state financial control with legislative definition of bodies of internal and external control.
Legally, the term “external state financial control” is determined by Federal Law from 07.02.2011 №6 «About general principles of organisation and actions of controlling bodies of Russian Federation and municipal forms”. Division of control between internal and external is a fairly common occurrence in foreign governments, especially in regards to organizing state financial control. The new law about improving state financial control and the responsibility for breaking budgeting laws, signed by the president of Russian Federation, Vladimir Putin, which became active since January 1st 2014, changed Russian Budget Codex and introduced the terms of internal and external financial control. Federal subjects and control bodies on a municipal level and internal – by main redistributors of budget means, Federal Treasury and Russian Financial Supervision, will administer external financial control, according to the new law. Objects of this control are financial bodies, government corporations, government companies, economic entities, and companies with public organisations as their shareholders as well as commercial companies with such organisations as their shareholders. This way, bodies of state financial control conduct external state financial control in Russian Federation in the legal system, with granted authority and necessary organisational and functional independence. Thus the law is granted control bodies with competence required to administer external financial control, including the right to analyse efficiency of the use of budget means, efficiency of the budget decisions, made by executive bodies. The rights of officials from state financial control bodies that couldn’t be determined by regional legal system were cemented. Also the law defines the basis of interaction of control bodies on all levels of public affairs. Other factors in increasing fecundity include solving existing problems in standartisation of control, strengthening the effectiveness of financial sanctions, implementing and actively using technology, as well as separate types of state financial control such as efficiency audit and strategic audit. An important feature of state financial control development in modern circumstances is implementation and determining the meaning and place of state audit in it. It should be said that there are different points of view and positions of representatives of the scientific society regarding the equality of these matters, nevertheless formation of state audit is a step towards improving state financial control to achieve goals of modernizing state finances, set in order to increase fecundity of use of budget means. State financial control is a lot broader in organization and methodology in conducting state audit, which doesn't necessarily include all the elements of state financial control. According to the new law about state financial control and responsibility for breaking budget laws (from Jul 2nd 2013) authority of efficiency audit of the use of state finances is held by the Accounting Chamber and control bodies. This way, state audit differs from state financial control because the emphasis is shifted towards efficiency audit of the use of budget means and state property. In a certain way the increase in fecundity of control depends on the types of carried out financial control measures, one of which, potentially greatly important, is efficiency audit.
Efficiency audit is a relatively new form of audit, it's a sector of science, the form of which is constantly changing and has great potential. Efficiency audit (along with traditional financial audit) must hold a dominant position in the structure of management in terms of state control system, because its goal is to give assurance to the effective use of state resources.
Since the beginning of 1960s the role of this kind of audit, aimed at achieving economy, effectiveness and fecundity of operations in companies, focus on the most important and high-risk industries, has a mostly predicative (not reactive) character, is constantly increasing, and now it is much more regarded in terms of conducted audits.
The appearance of efficiency audit as a special form of control could be traced back to 1970s, when the term “audit efficiency” first appears in the Lima Declaration of Guidelines on Auditing Precepts of state financial control. The declaration notes that aside from financial audit (checking the assigned spending of means and financial statements), the importance of which is obvious, there’s another form of control (its goal is different) to determine how effective and frugal the expenditure of state finances is. This form of control not only includes the specific aspects of management, but also the whole management activity, including “organizational and management system”. Institutionalisation (theoretical and practical) of the new kind of control actions is connected with the tendencies of improving the role of state finances in the economy of developing countries; with developing systems of state financial control, when control solely after the distribution and accounting of state expenditure doesn't answer the needs of efficient government management, and lastly with the necessity of increasing the efficiency of control systems, especially internal.
In the general picture of efficiency audit the use of resources presents itself as a transparent, legitimate review of the action of economic subjects in terms of the use of different means. A special form of audit of efficiency is efficiency audit of state expenditure, oriented at the control of budget processes at both the stage of distribution and delivery of state funds to its users and the valuation of efficiency, expedience and fecundity of state expenditure. Thus, the control of economic decisions (separate aspects of financial policies) is conducted, with regard to their fecundity.
Audit of efficiency is different from targeted checks of government expenditure. Current form of control doesn’t include just the analysis of government projects and programs. There should be a complex and inclusive analysis of reasons of ineffective use of government funds based on recommendations on improving the budgeting process, active legislation and the whole economic policy of the government.
The budget system, ideally should be oriented not only to overview government funds, but also to achieve a certain, determined result; all while the current system includes the convergence of provision with resources of the budget organization and the results of its actions.
In order to yield results from efficiency audit, the following is necessary:
an adequate and modern requirements from the system of accounting, including the parameters of statements of government bodies about efficient use of government funds.
Objective conditions of switching to efficiency audit (legal base, authorisation of control bodies, methodology and qualified specialists)
At the same time while developing certain measures in creating opportunities of efficiency audit applications there are reasons, which halt its implementation. Particularly:
insignificance of the functioning period of market mechanisms in regulation and corresponding mechanisms of state control;
a significant amount of financial violations in the use of government expenditure, which predetermines the solution of these problems;
absence of legally sound system of state financial control, with an accurate definition of functions and authority of control bodies.
This way reasons, explaining the role and significance of efficiency audit in terms of improving fecundity consist first and foremost in the fact that the object of current type of state financial control is not only the use of budget means, but the valuation of how economically, productively used were the financial resources of the government:
Positives of a widespread implementation of efficiency audit include:
introducing the best management tools and new management systems that help manage costs more efficiently and economically;
introducing new systems and mechanisms, helping improve functions of income collection;
increasing cost efficiency through changes in mechanisms of supply for government needs;
improving current instructions and manuals;
decreasing the amount of wasteful spending, inefficiencies and corruption;
increasing the responsibility for the use of public funds;
distribution of good management practices.
Nowadays Accountancy Chamber of Russian Federation and control bodies administers efficiency audit. Significant problems in the realizing and conducting efficiency audit on a modern stage are as follows: firstly, the underdevelopment of valuation methods of efficiency criteria, second, the question of practical solvency of violations and following recommendations, formed due to efficiency audit measures. Just as important is the problem that the control bodies of Russian Federation, are attempting to implement elements of efficiency audit, which is obvious from the most used names of control activities, such as control of targeted and efficient use of funds, during which there is no development of efficiency criteria. The approach, based on the possibility of gradual implementation of efficiency audit elements is questionable, due to the fact that efficiency audit presents itself as a wholesome model with according necessary components.