Factors of the integrated risk management system and external audit of dairy industry enterprises

The modern competitive environment characteristic of the dairy industry market encourages enterprises to enhance management efficiency and minimize potential risks associated with key business processes. The article examines aspects of risk management systems and internal control of dairy industry enterprises in relation to external audits. Using the example of end-to-end business processes such as “from potential opportunity to payment”, “taxation” and “asset management”, the main risk indicators, risk events, and control procedures aimed at addressing the prerequisites for distortion of financial (accounting) reporting are studied.

In this research, within the “from potential opportunity to payment” business process, risks are identified in accordance with ISO 31000/2019 at every stage of the business process, which allows minimizing the probability of cash gaps and issues with the recovery of accounts receivable. Risks related to violations of tax legislation and the significance of the internal control system for minimizing potential risks of dairy industry enterprises are analyzed within the end-to-end business process of taxation. Management of non-current assets is considered in the context of potential distortions in balance sheet value, depreciation assessment, impairments, and control over the physical existence of assets.

The importance of external auditing is emphasized, as it provides an independent assessment of the design and operational effectiveness of control procedures in these business processes. Modern practices in the field of auditing and management of dairy industry enterprises are summarized. The study conclusions confirm the need for a comprehensive systematic approach to managing these processes in order to ensure sustainable development of enterprises in the long term.

1. Berezina A., Grundel L. Analysis of Tax Risks in the Formation of an Organization Tax Strategy // Russian Economic Bulletin. – 2022. – № 3(5). – P. 200–203.

2. Ovcharova E. Tax Compliance in Russia: Problems of the Correlation Between Administrative Enforcement Measures and Incentives // Law. Journal of the Higher School of Economics. – 2019. – № 1. – P. 89–111.

3. Gatzert N., Martin M. Determinants and value of enterprise risk management: Empirical evidence from the literature // Risk Management and Insurance Review. – Vol. 1, Is. 18. – 2015. – P. 29–53.

4. He F., Ding C., Yue W., Liu G. 2023. ESG performance and corporate risk-taking: Evidence from China // International Review of Financial Analysis. – Vol. 87.

5. Lundqvist S.A. Why firms implement risk governance: Stepping beyond traditional risk management to enterprise risk management // Journal of Accounting and Public Policy. – Vol. 5, Is. 34. – 2015. – P. 441–466.

6. McShane M.K., Nair A., Rustambekov E. Does enterprise risk management increase firm value? // Journal of Accounting, Auditing and Finance. – Vol. 26, Is. 4. – 2016. – P. 641–658.

7. Stein V., Wiedemann A. Risk governance: Conceptualization, tasks, and research agenda // Journal of Business Economics. – Vol. 86, Is. 8. – 2016. – P. 813–836.

8. Wang T., Yang B. Corporate social responsibility, stakeholders’ governance and idiosyncratic risk // Finance Research Letters. – Vol. 57. – 2016.

9. Wu T., Huang S., Chiu A., Yen D. IT governance and IT controls: Analysis from an internal auditing perspective // International Journal of Accounting Information Systems. – Vol. 52. – 2024.

10. Yingzhao N., Wenjie D., Donghui L., Lu X. Internal information asymmetry and power distance // Research in International Business and Finance. – Vol. 71. – 2024