Yekaterina Radchenko

postgraduate of Kyiv National Taras Shevchenko University

CONCEPT AND IMPORTANCE OF ECONOMIC CONTROL

Control - is one of the functions of management in all spheres of human activity. L. Dikan believes that control should be considered as a system of relations organized for systematic supervision and checking progress of a certain entity of a social, industrial or another process by control authorities, institutions and authorized persons to determine the differences of the controlled entity from the set parameters (Dikan, 2004). M. Belukha notes that control should be considered as a function of social processes management in the sphere of social control, political leadership, democracy and rule- of- law state. " Control is a system of supervision and testing of managerial process of the entity through administrative decisions, result fixing of managerial influence on the managed entity, differences made during implementation of these decisions" (M. Belukha, 1999).

In economics, control is called economic control. Economic control extends to the development of the economy – industries and enterprises. It involves the systematic observation of financial condition and competitiveness of its products in domestic and world market. Thus, the content of economic control is a system of specific measures aimed at sustainable economic enterprises of different ownership forms in conditions of market relationships.

A. Goncharuk and V. Rudnitsky define economic control as a dynamic system, which aims "to identify and eliminate negative phenomena in the development of productive forces and production relations in order to control them in a timely expanded reproduction of a socially necessary product" (Goncharuk, 2007).

Classification of economic control is a prerequisite for rational and effective methods of its realization. Types of economic control are classified by factors such as: 1) source control data, 2) time of the conducted control, 3) subjects under control (organizational forms).

Depending on the source of control data it is advisable to identify such types of control as documentary, factual and mixed. A documentary one is a control which is done with a purpose of establishing the legality, validity and appropriateness of business operations and management decisions based on verification of documentary media economic information (primary documents and registers of accounting, financial, statistical, operational, technical, internal and other reporting forms, plans, objectives, balance, administrative and other documents).

The factual control is understood as a test to the real quantitative and qualitative state of the object that is checked in its kind (examination, inspection, measurement, conversion, weighing, laboratory analysis, expertise, etc.).

However, due to the lack of totally required information effective control can not be completely self-sufficient. For example, any property or inventory control measurement of the works finishes in comparing actual data with the accounts.

That is why an integrated and complete control over the economic activity of an enterprise is impossible without sharing the documentary and factual types of economic control.

In order to eliminate uncertainty concerning the division of economic control into documentary and factual, in our opinion, it is necessary to provide the following classification features as a source of reference data. It is another type of control - a mixed one. It includes methods which equally contain features of both documentary and factual types of control.

If to classify economic control according to time of its conducting, it distinguishes into the preliminary one, which is carried out before performing business transactions, and current, which is conducted in the process of their implementation and the next – when the process is completed.

Another criterion by which it is necessary to classify the types of economic control is its subjects. Features of the activities, duties, tasks and functions of various agencies that carry out control leads to organizational forms of control. The following types of economic control of the subjects (or organizational forms) can be distinguished as state, municipal, public, independent and the control of the owner (internal control). The development of the theory of economic control through specification of its kinds for the designed classification features improves the efficiency of the control process in operation and is a prerequisite for further improvement of its organization and methods.

Scientists, economists are not unambiguous in the approach to the interpretation of the essence of internal control. Internal control, except for a kind of economic control, is viewed as a form of a feedback, monitoring, oversight function, the system of controlled procedures, process, independent assessment of compliance of the company stated objectives, controlling activities, methods and procedures. However, all scientists unequivocally confirm the importance of internal control of the enterprises.

Even in 1979, Mr. Murashko wrote that internal control plays an important role in the operational management of economic activity of organizations and enterprises which is conducted by the supervisor, chief (senior) accountant and specialists to improve efficiency and profitability of business activities, compliance with the regime of economy, strengthening economic calculation of the proper use of cash and inventory. Internal control has comprehensive coverage of both the nature of business transactions and processes, and the time of its implementation. The peculiarity of this control is the fact that it acts at the time of implementation and execution of business transactions, which allows you to detect flaws in the work and implement measures to eliminate them. In addition, internal control facilitates rapid response to operations, allowing foreseeing the dynamics of the economy, estimating the tension of the plan in time, revealing the results of individual parts of an enterprise and checking certain performers (Murashko, 1979).

Ya. Goncharuk states that internal control is a managerial function, the system of supervision and testing of managerial process of the entity to administrative decisions, result fixing of managerial influence on the managed entity, drawing out differences made during implementation of these decisions (Goncharuk, 2002).

Yuri Maidanevych states that internal control is a kind of foundation that enables effective decision-making (Maidanevych, 2007).

If you pay attention to the definition given by I. Drozd, we can see that she defines internal control of the process which contributes to the objective of the objectives set now, through the implementation of administrative decisions (Drozd, 2007).

T. Ostapchuk argues that internal control is understood as a set of methods and procedures used by control subjects for regulation and effective implementation of economic activities through the timely detection of defects and errors in management and elimination of the causes (Ostapchuk, 2004).

This ambiguous interpretation of internal control is described by the production cycle of each object managing different particular characteristics and it requires different managerial influence to achieve pre-set target.

However, the characteristic features of internal controls are: 1) implementation of controlling functions by persons who are the representatives of this company and represent its interests, 2) thorough systematic inspection of industrial and financial-economic activity, and 3) provided communication among departments of the enterprise, the object and the authority of control.

Thus, internal control is a feature of management, aimed at checking the object controlled by persons who represent the interests of the company.

Economic control is an integral part of the management of any entity that provides its effective operation. Economic control as the system formally operates at every enterprise. Truly to say, only some of them carry out this control according to its basic canons, which provides an increase in activity, responsibility and discipline at all levels of management at such enterprises.

Literature

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2. Гончарук Я.А. (2007). Аудит: навч. посібник. - 3-тє вид., перероб. і доп. / Я.А.Гончарук, В.С.Рудницький. - К.: Знання, 443 с.

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