| Abstract [eng] |
Scientific sources indicate that in institutions whose primary activity is customer service through the initiation of transactions, the distinctiveness and consistency of the internal control structures must be ensured in daily operations. However, electronic money institutions and payment institutions challenges related to the completion of Bank of Lithuania reports EM007 and EM008. On the Bank of Lithuania’s website, in the section dedicated “Enforcement Measures” for financial market participants, information is publicly available regarding violations such as unaudited reports or reports submitted late, failure to ensure capital adequacy, and other breaches. This is closely related to the assurance of internal controls, which improves the quality of financial statements and ensures operational efficiency. However, limited research have been conducted on the impact of the internal control system itself on compliance outcomes, which can help manage risks and avoid penalties. The object of the research is the internal control and compliance assurance systems of electronic money institutions and payment institutions, which are related to the quality of reports submitted to the Bank of Lithuania and the reliability of operational indicators. The aim of the research is to analyze what types of internal control and compliance assurance systems are used by electronic money and payment institutions, and how these systems ensure the quality of reports submitted to the Bank of Lithuania and the reliability of operational indicators. Research objectives: 1. to analyze the legal and institutional regulation of the activities of electronic money institutions and payment institutions, as well as the role of internal control systems and compliance assurance in the reporting process; 2. to evaluate the relationship between the governance of electronic money institutions and payment institutions and effective internal control and compliance assurance systems, their relationship with ensuring the quality and reliability of reports submitted to the Bank of Lithuania, and the requirements imposed by the Bank of Lithuania on reporting and control mechanisms, and based on this, to develop a conceptual model; 3. to develop a research methodology enabling the identification of the internal control and compliance assurance systems used by companies and their relationship with the quality of reports submitted to the Bank of Lithuania and the reliability of operational indicators; 4. following the analysis of empirical data and the evaluation of the relationship between internal control and compliance systems and the quality of Bank of Lithuania reports, as well as the assurance of capital adequacy and profitability ratios, to provide conclusions and recommendations regarding the practical application of internal control and compliance assurance systems, in order to improve the quality and reliability of reporting. In the first part of the thesis, after analyzing the issues related to fines and warnings imposed on electronic money and payment institutions, it was determined that the implementation and maintenance of internal controls are essential, and that internal control policies must be reviewed in response to changing legislation. One of the objectives of internal control is to ensure compliance, primarily by ensuring adherence to laws and regulations and thereby managing risks. This directly affects the quality of financial statements and one of the most important indicators for these companies – the capital adequacy ratio. Without accurate data, companies cannot ensure the quality of reports submitted to the Bank of Lithuania. In the second part of the thesis, after examining the theoretical aspects of internal control and compliance, it was observed that the elements of the COSO framework and compliance functions are associated with the quality of financial statements and, accordingly, with the assurance of operational indicators. Furthermore, changes in regulation have also influenced governance systems, which are closely linked to internal control and compliance. Based on this, a conceptual model was developed, allowing for investigation of the interactions between all components of the conceptual model and the identification of emerging issues. In the third part of the thesis, an empirical research methodology was developed for assessing the quality and reliability of reports submitted by electronic money institutions and payment institutions to the Bank of Lithuania, based on a qualitative research strategy. The chosen research method was semi-structured interviews with experts and company representatives. Based on the conceptual model, two separate questionnaires were developed – one for experts and one for companies – while maintaining the structure of the conceptual model. A total of 11 respondents participated in the interviews: 7 experts and 4 representatives of electronic money / payment institutions. Data analysis was conducted using the content analysis method. In the fourth part of the thesis, after examining the proposed conceptual model empirically, it was noted that internal control elements and compliance functions effect the quality of financial statements and indicators in different ways. The results revealed certain challenges faced within the financial services sector. |
