Risk-Based Approach to Improving the Quality of Internal Audit

The main goal of this study is to identify the most relevant directions of transforming the internal audit competencies to improve its quality and ensure sustainable and efficient risk management at enterprises. An online survey of heads of enterprises in Kazakhstan held in 2019-2020 was the main method of the research. The experts were asked to complete a questionnaire developed based on the Global Internal Audit Common Body of Knowledge - CBOK questionnaire. The results of the survey have allowed identifying the degree of formal risk management and to position the internal audit as part of risk management at enterprises in Kazakhstan. The responsibilities of internal audit for risk management are reviewed in the study, with particular emphasis made on its responsibilities for providing guarantees. The results of the study have shown that certain success was achieved in risk management at enterprises in Kazakhstan, and the role of internal audit continues to develop. Nevertheless, the trend of a decreasing level of auditors' qualification persists in the audit industry, and most of the internal audit departments do not comply with international professional standards related to the quality of internal audits. At the same time, the study has shown that internal auditors have multiple opportunities to transform internal audit functions in order to efficiently address risk issues identified at the enterprises of Kazakhstan. On the one hand, this is a set of techniques for implementing innovative models for attracting specialists and methods for dynamic analysis and predictive modeling, implementing advanced methods for managing data and generalizing data. On the other hand, the authors provide specific recommendations relevant for enterprises in Kazakhstan, the application of which can significantly improve the quality of internal audits to combat the risk of fraud.