Financial Statement Audit and Internal Audit in the Accounting Systems of Small Entities: The Area of Operating Costs

This article contributes to research on identifying potential areas for improving accounting, audit and review systems, which can support managers in enhancing cost efficiency and the quality of financial statements. The discussion is divided into three main parts: theoretical, methodological and empirical. The first part presents the theoretical foundations of financial audit, outlines the conceptual assumptions of internal audit, and discusses the relationships between financial audit and internal audit. Subsequently, operating activity costs are examined as a key area of financial audit and internal audit in the functioning of a small entity. In this context, the aim of the study is to investigate the degree of difficulty small entities face in the proper identification and valuation of operating activity costs, according to the opinions of statutory auditors, and to assess the role of internal audit in eliminating cost errors before conducting the financial audit. The considerations are based on empirical research using statistical analysis of survey data with Pearson correlation, which made it possible to examine the relationships between the perceived level of difficulty small entities experience in identifying and valuing operating activity costs and the assessment of the role of internal audit in eliminating these errors. Our findings suggest that combining the perspectives of financial audit and internal audit in the analysis of operating activity costs can effectively reduce the risk of errors and irregularities, particularly in the accounting of small entities. The topic of financial audit and internal audit in the accounting of small entities is important and timely, as it enables a better understanding of the complementarity of both audit functions and enhances the quality of financial information in enterprise management.