Internal control and audit system in the Ministry of Defense and Serbian Armed Forces

Abstract

Internal audit is an independent activity that provides an objective professional opinion of advisory character (recommendations on how to improve the functioning of the system), with the purpose of contributing to the improvement of the organization's business. It assists the organization in achieving its goals by systematically and disciplinedly assessing and evaluating risk management, existing controls and management of the organization. Also, internal audit is one of the three key components of the public sector internal financial control framework, and is defined as a "functionally independent and decentralized internal audit" that reviews the effectiveness of internal controls. Internal audit provides support to the organization in achieving management goals through auditing financial management and control systems, and enhances business value through good recommendations. Internal audit is not the same as inspection! Internal audit does not penalize or sanction! The introduction of an adequate system of internal controls and audits into the defense system achieves and ensures the efficient and rational use of funds to finance defense expenditures, on the one hand, and on the other hand significantly narrows the space for significant irregularities, frauds, corruption and the appearance of various forms organized crime. The audit function assists management insomuch as it indicates what is wrong with the entity's business and provides recommendations on how to create the preconditions for a better business. The role of the audit is that it represents: 1) the management controlling instrument used by the management of the organization to determine where the organization's failures are located; 2) the control over the functioning of the Accounting and Internal Financial Control system. This form of control involves the organization, policies and procedures used by budget users to ensure that the tasks entrusted to them are performed. It verifies that the resources used in the execution of tasks within the competence of the budgetary beneficiary have been used in accordance with the set goals.