EFFECTIVENESS OF PUBLIC OVERSIGHT OF AUDIT ACTIVITIES: EUROPEAN PRINCIPLES AND DIRECTIONS FOR DEVELOPMENT IN UKRAINE
Abstract
The article examines the effectiveness of public oversight of audit activities in the context of the European audit regulatory model. To achieve the research objective, systemic, comparative and regulatory analyses, a structural and logical approach, and generalisation were applied. The relationship between the institutional independence and professional capacity of the public oversight body is examined as a prerequisite for the appropriate quality of oversight decisions. Risk-based approach and proportionality are considered as interrelated principles determining the prioritisation, focus and intensity of oversight procedures. It is demonstrated that the assessment of an auditor’s professional judgement should be based on the sufficiency of the grounds on which it was formed rather than on its consistency with an alternative judgement of an inspector. It is proposed that the effectiveness of public oversight should be assessed not by the number of oversight activities performed or deficiencies identified, but by taking into account the system’s ability to identify risks to audit quality, determine the causes and systemic nature of deficiencies, assess the risk of their recurrence, and evaluate the effectiveness of corrective actions. Root cause analysis and the generalisation of inspection findings are identified as components of preventive regulatory impact. Five groups of criteria for assessing the effectiveness of public oversight are proposed: institutional capacity, quality of the oversight process, regulatory outcomes, market outcomes, and societal outcomes. The directions for the further development of the Ukrainian public oversight system are identified, focusing on improving the quality of the oversight process, strengthening its preventive effect, and deepening European integration. The practical value of the findings lies in their potential use for improving approaches to assessing the effectiveness of public oversight and developing risk-based oversight activities