INTERACTION BETWEEN EXTERNAL AUDIT AND BANK TOP MANAGEMENT IN ENSURING FINANCIAL STABILITY AND TRANSPARENCY: CHALLENGES AND DEVELOPMENT PROSPECTS

Abstract The article examines the theoretical and practical aspects of interaction between external audit and bank top management in ensuring financial stability and transparency under conditions of digital transformation and macroeconomic instability. The research analyzes the regulatory framework for interaction, including requirements of the National Bank of Ukraine, international auditing standards, and Basel III principles. Key principles of effective interaction are identified: auditor independence, transparency of information exchange, professional communication, and timeliness of response to identified problems. The study reveals the structure and features of interaction mechanisms, including formal (regulated procedures, audit contracts), informational (management reporting, risk reports), and procedural (audit planning, working meetings) mechanisms. The role of the audit committee as a key coordination body between external auditors and bank management is emphasized. The research demonstrates that quality interaction is crucial for ensuring financial stability through timely risk identification, early detection of problem assets, independent assessment of credit risk reserves adequacy, and evaluation of internal control systems effectiveness. The impact of interaction on ensuring banking transparency through independent verification and confirmation of financial information reliability is analyzed. Special attention is given to the features of interaction under martial law conditions, including adaptation of audit procedures to crisis conditions, transformation of communication processes from face-to-face to online format, increased communication frequency, and heightened requirements for information timeliness and reliability. The study identifies main challenges: physical access restrictions to banking institutions, personnel and documentation evacuation, infrastructure damage, and increased uncertainty in asset and liability valuation. Practical recommendations are developed for improving interaction mechanisms, including implementation of digital communication platforms, standardized critical event reporting templates, joint working groups creation, early warning systems for potential problems, regular assessment of communication process quality, and training programs for crisis conditions work. The research confirms that effective interaction between external audit and bank top management is fundamental for maintaining trust in the financial system and ensuring its resilience under unprecedented challenges.