Theoretical and Practical Problems Related to the Audit, Control and ...

fully operational at any point in time. A system
as a whole cannot be a hundred per cent
reliable when even just one of its sub-systems
is not dependable. It is impossible to disregard
the recognition by COSO:
"An internal control system, no matter
how well conceived and operated, can provide
only reasonable - not absolute -
assurance to management and the board
regarding achievement of an entity's objectives.
The likelihood of achievement is
affected by limitations inherent in all internal
control systems. These include the
realities that judgments in decision-making
can be faulty, and that breakdowns
can occur because of simple error or mistake.
Additionally, controls can be circumvented
by the collusion of two or more
people, and management has the ability to
override the system. Another limiting factor
is that the design of an internal control
system must reflect the fact that there are
resource constraints, and the benefits of
controls must be considered relative to
their costs." (COSO 2001)
Conclusions and Closing
Remarks
The objective of the present article is to introduce
the issue, calling the readers' attention
and thoughts to the significant aspects of
the wider context, general philosophical basis
and foundational principles for develop of an
optimal model of the ACSS of LOG. Does
exist a slight hope that the current article is
of help for scientists researching the subject
of the ACSS of LOG and for policy analysts,
politicians and officials in understanding the
foundational problems of the ACSS of LOG
and LOG units on a wider scale and in directing
their thoughts to even more thorough examination,
fruitful reflections, and further
actions in solving the tasks facing the society.
The author is hoping that this particular article
does give an adequate and appropriate
description of the current model of local governments'
audit, control and supervision
model of the Republic of Estonia and proposed
by him six foundational principles for
developing an optimal model of an audit, control
and supervision system of local government
are worthy to discuss and suitable for
implementing not only for the Estonia. Author
is of concluding opinion that does exist a possibility
to design, arrange and maintain theoretically
well founded and practically reasonably
functioning integral and coherent audit,
control and supervision system, but does not
exist possibility to offer uniform, standard
solution fitting to the municipal sector in general,
because different models do apply to
huge, big, middle-sized, small and tiny municipalities.
Although this article is based on
the context of the Estonia, the subject thereof
should offer sufficient ground for analogy and
comparison with smaller societies in the similar
development stage. The author estimates
the subject to be scientifically topical, especially
in the context of state sciences, in the
world, in the European Union and in the Estonia.
However, the topic is definitely important
in Estonia, as the Republic of Estonia is
in the sphere of influence and, simultaneously,
the influencer of three interactive processes:
1. integration with the European Union;
2. finding the model functional in the field of
audit, control and supervision in the European
Union, including local governments; 3.
formation of the situation following the expansion
of authority of the SAO. In a situation
where three very important processes
interlocking with the subject have started, it
is essential that the following could be done
at a very early stage: 1. An integral overview
is obtained of the legal-political and institutional
situation in the field of the ACSS of
LOG; 2. The main problems of the ACSS of
LOG are systemically identified; 3. the most
appropriate theoretical model of the ACS of
LOG is devised for the Estonia to ensure the
coverage of all fields and aspects but exclude
any unjustified duplication of institutional
activities by functions; 4. Based on the devised
model, requirements and recommendations
together with a schedule (position) are
devised in order to protect the interests of the
Republic of Estonia in the European Union,