In international practice, internal control is understood as an integral part of the modern system of managing economic entities of any organizational and legal forms. The purpose of internal control is to ensure that all employees of the enterprise comply with their duties in accordance with the goals of the organization. Internal control, depending on the tasks being solved, is administrative.

Internal control, as a rule, is carried out:

-   Economic entity management bodies;

-   Audit Commission (Auditor) of an economic entity;

-   Chief accountant or other official of an economic entity responsible for maintaining accounting records (an individual or legal entity with whom the economic entity has concluded an agreement on providing accounting services);

-   Internal Auditor (Internal Audit Service) of an economic entity;

-   Special officials, a special unit of an economic entity responsible for compliance with the rules of internal control provided for by other laws;

-   Other personnel and divisions of the economic entity.

Internal audit is the most developed form of internal control.

Organization of internal control in the form of internal audit is present to large and some medium-sized organizations, which are characterized by:

-   Complex organizational structure;

-   Multiple branches and subsidiaries;

-   Variety of activities and the possibility of their cooperation;

-   Desire of management bodies to obtain a sufficiently objective and independent assessment of the actions of managers at all levels of management.

Internal audit – activities that contribute to increasing the value of business, consisting in systematic and sequential assessment of efficiency and development of recommendations for improving systems:

-   Internal control;

-   Risk management,

-   Corporate governance.

An internal audit, by definition, is designed to help the organization maintain an effective and adequate internal control system, but it should not replace other "linear" functions of internal control. The functionality of the Internal Audit Service depends on the company and the stage of its organizational development.

In general the functions of the Internal Audit Service include:

-   Control panel;

-   Information and analytical center;

-   Methodological support;

-   Consulting room.

The control function includes:

-  Study, assessment and monitoring of the adequacy and effectiveness of the internal control system, including in the field of application of control tools and procedures and analysis of the effectiveness of Applied tools and control procedures;

-  Checking compliance with the legal framework and internal regulations of the organization;

-  Implementation of subsequent control over the elimination of identified shortcomings;

-  Checking the availability and safety of assets, working with obligations;

-  Identification and implementation of reserves for improving the efficiency of financial and economic activities;

-  Interaction with external control.

As part of performing this function, internal auditors assess the effectiveness of the internal control system and risk management system, as well as check the completeness and reliability of accounting (financial) reports, the correctness of accounting and tax accounting, financial and economic operations, safety and efficiency the use of assets, the work of the organization, its branches and structural divisions, the course of eliminating identified shortcomings, etc. The control function is performed taking into account the significance of the risks inherent in the corresponding verification objects.

The information and analytical function can be successfully performed by the Internal Audit Service only if there are properly formed databases and a sufficient level of qualification of internal auditors.

It includes:

-  Informing the organization's owner and top management about identified

circumstances and trends;

-  Expertise of developed management decisions;

-  Analysis of the rationality of internal material flows;

-  Analysis of the implementation of plans and measures.

Databases provide for obtaining information in the context necessary for conducting information and analytical work using electronic computing tools.

Methodological and consulting functions are performed effectively only if there are highly qualified personnel in the Internal Audit Service, who regularly improve their qualifications. When implementing the methodological function internal audiences take part in the development:

-   modern methods of accounting and tax accounting and analysis of their application practices,

-   improving the management accounting system and analyzing the practice of its application;

-   projects to improve the internal control system.

The consulting function assumes that internal audiences take part in the accounting of an economic entity, consultations of management system employees on various financial and economic operations, on various aspects of the regulatory framework, on the development and implementation of programs to improve the qualification of personnel, and many other problems, arising as a result of the functioning of any economic entity.

For organizations that are at a developing stage, management does not monitor and does not independently evaluate the system of internal control and risk management in the organization, but takes actions to correct internal control deficiencies identified by independent divisions / organizations. In the presence of an internal audit, both violations are identified and individual control procedures are evaluated in key areas, and shortcomings of the internal control system are identified, including significant ones.

In companies with a well-established level of development, monitoring and evaluation of the internal control system is periodically carried out by the management, but is not documented. Internal audit uses a risk-based approach, tests control procedures, and provides recommendations for improving the internal control system. In this case, an external audit may rely on control procedures performed by internal auditors in certain areas of accounting, and this may reveal individual shortcomings in the internal control and risk management system.

The above functions are fixed in the regulations on the activities of the Internal Audit Service. The Internal Audit Service has good opportunities to provide consulting services to the board of directors due to its high professional standards, knowledge of the organization and its operations. Thus, the Internal Audit Service brings additional benefits to the organization when it performs both the functions of providing guarantees and consulting.