AUDIT AS A TOOL FOR MANAGING FINANCIAL RISKS IN DEBT OBLIGATIONS OF AN ENTERPRISE

Abstract

The article explores the role of auditing as a crucial tool in managing financial risks that arise in the process of fulfilling a company’s debt obligations. Particular attention is paid to the importance of auditing debt settlements, its capacity to identify potential financial risks, and its role in developing effective management strategies. A comprehensive audit of financial transactions enables businesses to minimize insolvency risks by detecting weaknesses in settlements with creditors and counterparties. The study highlights the role of audit procedures in enhancing financial discipline, ensuring compliance with contractual obligations, and strengthening adherence to regulatory requirements. A well-structured audit process helps companies gain a clearer understanding of their financial position and make informed decisions to mitigate risks. The article examines various approaches to assessing a company's financial condition, identifying deviations in debt management policies, and detecting early indicators of liquidity shortages or financial instability. Special emphasis is placed on the significance of audit procedures in formulating data-driven managerial decisions regarding debt restructuring, optimizing cash flow distribution, and improving internal financial control. The study also investigates the role of both internal and external audits in strengthening corporate governance and fostering a proactive risk management culture within organizations. By implementing systematic audit procedures, businesses can enhance the transparency of financial activities, minimize errors in financial reporting, and improve the accuracy of risk assessments. Additionally, the article discusses how audits contribute to increasing investor confidence and strengthening relationships with financial institutions and business partners. A transparent and well-documented audit process reassures stakeholders that the company is financially stable and capable of meeting its debt obligations. Practical recommendations are provided for integrating auditing mechanisms into financial strategies to enhance financial sustainability, ensure long-term stability, and successfully navigate dynamic economic conditions. The role of technological advancements in modern auditing practices is also briefly considered, with a focus on how automation and data analytics can improve audit accuracy and efficiency.