What question did this study set out to answer?

The research aims to explore effective financial controlling methods to prevent fraud in small and medium-sized enterprises within Kyrgyzstan.

April 16, 2026Open Access

Methods and approaches of financial controlling for the prevention of fraud in small and medium-sized businesses of Kyrgyzstan

Key Points

The research aims to explore effective financial controlling methods to prevent fraud in small and medium-sized enterprises within Kyrgyzstan.
Theoretical-analytical approaches were used to assess financial controlling methods.
Comparative analyses were conducted to highlight differences in fraud prevention practices.
Content analysis helped evaluate institutional and legal frameworks influencing financial control.
Structural-functional approaches facilitated the understanding of controls within SMEs.
Financial controlling is identified as a crucial integrated system for managing fraud risks.
Only 13.3% of SMEs use structured internal control mechanisms, indicating gaps in fraud prevention.
Factors such as high cash transactions and low financial literacy increase vulnerability to fraud.

Abstract

The purpose of the study was to examine methods and instruments of financial controlling that ensure the detection and prevention of fraudulent activities in the small and medium-sized business (SME) sector of Kyrgyzstan. The research methods included theoretical-analytical, comparative-analytical, comparative-legal, and structural-functional approaches, as well as the content analysis method, which ensured a comprehensive assessment of the institutional, legal, and managerial aspects of financial controlling. As a result of the conducted study, it was established that financial controlling constitutes an integrated system of management accounting, analysis, and control aimed at ensuring the financial sustainability of an SME enterprise. It was determined that the implementation of the controlling cycle “plan – actual – adjustment” makes it possible to increase the accuracy of budget planning and to reduce time lags between the emergence and elimination of financial deviations. It was revealed that the structuring of controlling functions – monitoring, forecasting, analysis, and risk prevention – contributes to an increase in the transparency of financial flows and reduces the likelihood of fraudulent operations in small and medium-sized businesses. It was established that financial fraud in the SME sector of the Kyrgyz Republic has a systemic nature and manifests itself in the forms of manipulation of financial statements, cash and payment fraud, and tax schemes. A low level of implementation of internal control mechanisms was quantitatively confirmed. It was established that only 13.3% of small and medium-sized enterprises with access to bank financing apply institutionalised internal control mechanisms, which indicates a low level of maturity of managerial procedures. The main institutional factors of SMEs’ vulnerability to financial abuses were identified. The key factors are: a high share of cash transactions, low financial literacy (11.6 out of 21 points according to the methodology of the Organisation for Economic Co-operation and Development/National Bank of the Kyrgyz Republic), limited use of banking financing instruments, and high perceived corruption (146th place in the Corruption Perceptions Index-2024). As a result of the study, an approach to the implementation of financial controlling in small and medium-sized businesses of the Kyrgyz Republic was developed, based on the integration of organisational, analytical, and technological methods. The practical significance of the results lies in the possibility of applying the proposed comprehensive controlling model to reduce the frequency of financial violations and to optimise managerial decision-making in SME enterprises

Ask AI

Mark Helpful

Bookmark

Relay

View Full Paper