The Need for Internal Control over Wage System in the Context of Economic Stabilization in Ukraine

Abstract

The problem addressed in the study is critical for Ukraine, as the wage system at company level calls for compromise of interests of many stakeholders (a company, an employee, a tax inspection etc.), with each of them regarding the wage system as a highly important aspect of company management. The objective of the study is to analyze indicators of labor and wage system in Ukraine, to justify the need for the internal control over wage system in the context of stabilization of the Ukrainian economy, and to outline the problems faced when setting up control over wage system at national and corporate level.

The analysis of key socio-economic indicators for Ukraine shows that in spite the slightly declined registered unemployment in Ukraine, the official data give no indication of an improvement in the socio-economic conditions of Ukrainian population: while the reported average monthly wage was falling, the consumer price index was growing. The problem, therefore, needs to be addressed by balancing labor costs, wages and consumer spending of households. An important component in its solution is the effective internal control over wage system at company level. The objectives of the internal control are outlined as a company management function; the importance of properly organized internal control over wage system for the company performance enhancement is highlighted. The problems of internal control over wage system are systematized, their solutions are proposed.