Kyiv, Ukraine, October 23, 2008—A
survey by IFC, a member of the World Bank Group, has found that 71 percent
of Ukrainian respondent companies are not aware of official guidelines
on the use of internal audits, indicating a strong need for internal audit
The survey, conducted in the spring of 2008 with the assistance of the
National Bank of Ukraine and the All-Ukraine Institute of Internal Auditors,
also found that 79 percent of companies did not know whether Ukrainian
guidelines for internal control practices were in line with international
The low level of awareness was reflected
in company practices, with only 39 percent of real-sector respondents having
an internal control department and only 48 percent having an internal audit
department. Ukraine’s banking sector showed greater awareness, because
the National Bank of Ukraine has issued clear guidelines for internal audit
Internal control is essential for improving
a company’s corporate governance. It provides reasonable assurance regarding
the achievement of objectives in effectiveness and efficiency of operations,
reliability of financial reporting, and compliance with applicable laws
and regulations. Internal auditing also plays an important role in evaluating
the effectiveness of control systems, and contributes to a company’s effectiveness.
The survey results show a growing demand
for internal audit and internal control services. Sixty percent of companies
surveyed believe strong internal control systems will improve their ability
to attract external financing, and 67 percent plan to invest in improving
their systems in the next two years. Investors operating in Ukraine also
view internal control and internal audit as important to their investment
decisions, with almost 50 percent indicating that adequate audit and control
systems reduce investment risk.
IFC hopes to launch full-scale program
in Ukraine in the coming months to help companies improve their internal
audit and control systems.
A full electronic version of the survey report can be downloaded from IFC
Web site: http://www.ifc.org/ifcext/eca.nsf/AttachmentsByTitle/IAIC_StudyFinal_Eng.pdf/$FILE/IAIC_StudyFinal_Eng.pdf.
Ukraine has been a shareholder and a
member of IFC since 1993. As of June 30, 2008, IFC had invested around
$988 million in 42 projects in the country. IFC’s investment program focuses
on Ukraine’s financial, agribusiness, energy efficiency and cleaner production,
and infrastructure sectors. IFC also offers advisory programs in Ukraine
on leasing, agribusiness, mortgage finance, energy efficiency, and improving
the business environment. For more information, visit www.ifc.org/ukraine.
IFC, a member of the World Bank Group, creates opportunity for people
to escape poverty and improve their lives. We foster sustainable economic
growth in developing countries by supporting private sector development,
mobilizing private capital, and providing advisory and risk mitigation
services to businesses and governments. Our new investments totaled $16.2
billion in fiscal 2008, a 34 percent increase over the previous year. For
more information, visit www.ifc.org.