Regulatory and legal mechanisms of internal audit in Ukraine: current state, challenges, and directions for improvement.

Abstract

The article is devoted to a comprehensive analysis of the regulatory and legal mechanisms of internal audit in the context of the current legislation of Ukraine and adaptation to the new Global Internal Audit Standards, which entered into force on 9 January 2025. The main idea of the study is to substantiate that the further development of internal audit in Ukraine requires a systemic renewal of the regulatory framework, since the ability of internal audit to perform not only a control function, but also a strategic, risk-oriented, and managerial-consulting function depends precisely on its integrity, consistency, and compliance with international standards. The relevance of the article is determined by the need to move from a predominantly formal control model to an internal audit model focused on improving management efficiency, transparency, accountability, and adding value to the activities of public sector institutions.
The study characterizes the structural and substantive features of the current regulatory framework for internal audit, carries out a comparative analysis of the degree of harmonization of national regulation with international requirements, and identifies the main challenges and prospects for the development of internal audit in Ukraine. The transformation of internal audit from a control-and-inspection model to a modern risk-based approach aimed at the strategic development of public institutions is examined.
It has been established that the current regulatory framework is characterized by fragmentation, terminological inconsistency, and incomplete implementation of certain provisions of the Global Internal Audit Standards, in particular with regard to ensuring the full independence of the audit function, strategic planning, integrated assurance, digitalization of audit processes, and resource support.
The necessity of moving from a predominantly controlling model of internal audit to a model of strategic assessment of management effectiveness and a risk-based approach is substantiated. The development of a comprehensive framework legal act is proposed, which would ensure the consolidation of existing provisions, the unification of terminology, the strengthening of the independence of internal auditors, and the improvement of the legal support of internal audit in the public sector. The scientific novelty lies in the systemic analysis of the regulatory and legal mechanism of internal audit in Ukraine in the context of adaptation to the Global Internal Audit Standards, the systematization of its structural components, and the identification of the main gaps, inconsistencies, and institutional limitations of the current legal regulation. The practical significance of the results lies in the possibility of their use in improving legislation, internal regulatory documents, and methodological support for internal audit in Ukraine.