THE ROLE OF INTERNAL AUDIT IN PREPARING CONSOLIDATED FINANCIAL STATEMENTS AND SUSTAINABILITY REPORTING IN THE AGRO-INDUSTRIAL SECTOR

Abstract

In the modern business environment, where the importance of transparency and reliability of information is increasing, the process of internal auditing of consolidated financial statements and sustainability (ESG) reports is becoming a key element of managing agricultural holdings. Company management is increasingly striving to obtain high-quality and reliable information that not only complies with international standards but also helps build trust among stakeholders. Internal audit plays a crucial role in ensuring transparency and compliance of reporting with high standards, which is particularly relevant for agro-industrial complexes, whose activities are closely tied to environmental, social, and governance (ESG) aspects.

In the Russian Federation, consolidated financial statements prepared in accordance with International Financial Reporting Standards (IFRS) have long been mandatory for agricultural holdings. This requirement is enshrined in legislation and aims to ensure transparency and reliability of data, thereby fostering trust among investors and other stakeholders. However, to optimize costs and improve the quality of reporting, it is essential to organize preliminary checks by the internal audit function, which helps minimize risks and prepares the company for external audits.

This paper examines a unified approach to auditing the consolidated financial statements of agro-industrial complexes, based on the use of EPC diagrams for visualizing and analyzing business processes. The proposed internal audit model includes a sequence of steps aimed at enhancing the efficiency of audits and ensuring compliance of reporting with international standards. Particular attention is paid to the role of internal audit in preparing and evaluating sustainability (ESG) reports, which are becoming increasingly in demand amid growing interest in the environmental, social, and governance aspects of corporate activities. The importance of integrating internal and external audits, as well as the need to implement modern technologies such as blockchain for automating accounting and control processes, is emphasized. The proposed approaches and recommendations aim to improve the quality of reporting, strengthen stakeholder trust, and ensure the sustainable development of agro-industrial complexes in the long term.