Accounting of Liabilities and Internal Audit In Higher Education Institutions

Financial governance in higher education institutions (HEIs) is increasingly recognized as a cornerstone of institutional stability and academic excellence. Accurate liability accounting and effective internal audits ensure transparency, optimize expenditures, and mitigate financial risks. In Uzbekistan, HEIs are undergoing significant financial reforms that necessitate enhanced accountability mechanisms, particularly in the management of liabilities and the implementation of internal audit systems. Despite regulatory frameworks, many HEIs continue to face discrepancies in liability documentation and audit practices, largely due to outdated manual systems and a lack of qualified personnel skilled in digital accounting technologies. This study investigates current practices in liability accounting and internal auditing across public and private HEIs in Uzbekistan, identifies the underlying challenges, and proposes practical solutions based on international best practices. Analysis from 2022–2024 revealed up to a 25% error rate in liability reporting among public HEIs and demonstrated that institutions using digital platforms like QuickBooks reduced financial risks by 20% and improved budget execution by 12%. The study also found that most internal audits remained procedural, lacking predictive risk analysis. The article introduces a model integrating digital financial tools, risk-based audit frameworks, and ERP systems to modernize liability tracking and strengthen institutional accountability. These insights call for policy-driven reforms focusing on technological integration, digital capacity building, and structural enhancement of audit mechanisms to elevate the financial efficiency and governance quality of HEIs in Uzbekistan.