№ 1/2020

Fìnansi Ukr. 2020 (1): 114–128https://doi.org/10.33763/finukr2020.01.114

SCIENTIFIC DISCUSSIONS

CHUMAKOVA Iryna ¹

¹SESE “The Academy of Financial Management”
OrcID ID : https://orcid.org/0000-0003-3432-3177

Updating transparency and accountability mechanisms for utility companies under decentralization

The object of the research is oversight and audit mechanisms of utility companies and the improvement of these mechanisms as part of the decentralization reform in Ukraine. One of the most problematic issues is the application by local authorities of the norms of legislation recently adopted in connection with reforms in the course of decision-making on the formation of supervisory boards in utilities and the appointment of an independent auditor to audit their annual financial statements. A research was made on the basis of the state of communal property management by the newly formed amalgamation of territorial communities, the amount of which is now at their disposal due to decentralization processes is steadily increasing. During the research, an approach was taken to identify key risks and problems in this area, taking into account the need for Ukraine to implement measures to implement the Association Agreement with the EU and apply the provisions of this document in local practice regarding local government, accounting and auditing. There are no studies of these problems in the modern economic literature in the context of a combination of these two areas of reform – adapting updated legislation on accounting and auditing of financial statements with requirements for the disclosure of socially necessary information managed by utility companies. This made it possible to formulate suggestions on the criteria for mandatory creation of supervisory boards in utility companies and to develop practical recommendations for local authorities regarding the procedure for selection by the supervisory boards of independent auditors (audit companies) for the mandatory audit of the utility companies’ annual financial statements. The suggested recommendations will bring the activities of utility companies in Ukraine closer to international standards of transparency and accountability and ensure further adaptation of domestic legislation in the field of oversight and audit in the communal sector to European directives and best practices.

Keywords:utility companies, supervisory board, audit, transparency, accountability, amalgamation of territorial communities

JEL: H72, M42

CHUMAKOVA I. . Updating transparency and accountability mechanisms for utility companies under decentralization / I. . CHUMAKOVA // Фінанси України. - 2020. - № 1. - C. 114-128.

Article original in English (pp. 114 - 128)

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