Legal mechanisms for improving the efficiency of accounting in the social security sector: Analysis of the regulatory environment and recommendations for improvement

Abstract

The purpose of this study was to analyse legal accounting instruments, with a focus on the social security sector, by identifying and assessing the key problems affecting the effectiveness of their use. The study analysed Ukrainian legislation governing accounting and taxation and compared it with the legal systems of Germany, the UK, and the US. The study examined the harmonisation of national standards with international ones, specifically focusing on the challenges faced by small and medium-sized enterprises due to inadequate government support and the inconsistency of tax legislation with international requirements. The findings of the study showed that small and medium-sized enterprises in Ukraine are falling behind in the implementation of international standards because of the lack of financial and technical resources. It was also found that many enterprises have no access to qualified personnel capable of working with international standards, which further complicates their transition to international reporting standards. Statistics show that only 35% of medium-sized and 20% of small enterprises in Ukraine have implemented international financial reporting standards, which is significantly lower than in Germany, the UK, and the US, where this rate is much higher due to better legislation and government support. Furthermore, insufficient automation of accounting processes and unified reporting requirements in the social security sector complicate the management of pension payments and other social obligations. The study found that insufficient control by government agencies over compliance with international standards reduces the transparency of financial reporting, which leads to a general setback in the competitiveness of Ukrainian enterprises in international markets. The study found a lack of coordination between enterprises and social funds, which increases the risk of delays in payments and reporting errors and requires improved accounting processes to increase the transparency and stability of the social security system. The findings underscore the necessity of reforming legislation to harmonise national standards with international ones and improve accounting efficiency, which will help attract foreign investment and increase the competitiveness of Ukrainian enterprises