The Role Of Control Environment In Developing Internal Control Efectiveness And Good Corporate Goverment

Abstract

Internal control and good corporate government are absolutely necessary in organizational life, including companies to achieve goals and the ability to maintain their survival. This study aims to investigate the role of the control environment on the effectiveness of the company's internal control and good corporate government (GCG). The study was conducted based on literate reviews and conducted investigations regarding the implementation of internal control which is the implementation of corporate governance at PT Bank Rakyat Indonesia, Tbk, (Bank BRI) which is one of the oldest and largest banks owned by the Government of Indonesia. The data was collected through investigations of various publications by the Bank and then a descriptive qualitative analysis was carried out in relation to corporate governance which depicts the implementation of internal control systems in these Banks. The results showed that BRI Bank has successfully implemented GCG, which includes internal control and its components. In addition, this study shows that there is a relationship between the control environment, internal control and corporate governance. The control environment is the most important and fundamental component in the internal control system. Therefore, in designing internal control in order to create GCG, it must be preceded by the design of a strong control environment because without it as good as the other control components, everything will not mean anything in achieving the objectives of internal control, good corporate governance and its culmination is the achievement of company goals overall.