The place of internal control in corporate governance

Within the framework of this study, the author proposes to consider the problem of forming an effective system of internal control and its place in corporate governance. Internal control is one of the key tools for managing a company of any size: from a small individual entrepreneur to a large corporation. In 2002, The United States Securities and Exchange Commission adopted the Sarbanes-Oxley Act (SOx), which establishes the basic requirements for organizations whose shares and securities are placed on the US stock exchanges. Based on the requirements of this law, all companies subject to its requirements are required to maintain an effective system of internal control over the preparation of financial statements. Moreover, since the American stock exchange is highly quoted and many large corporate structures from all over the world seek to list their companies’ shares there, as a result, they are also subject to this act, thus imposing the obligation to implement and maintain an effective internal control system in your organization, regardless of its location. In particular, in the Russian Federation, this issue has also become quite relevant recently and required an understanding of the methodological framework in the field of internal controls. The main purpose of this study is to review the main components of an effective internal control system in accordance with the Sarbanes-Oxley Act in order to form an understanding of the place of internal controls in corporate governance.