Committee Of Sponsoring Organizations Research Articles

The influence of factors in the internal control system on financial reporting quality at administrative and public service units in Vietnam

The objective of the project is to measure the influence of factors in the internal control system on financial reporting quality at administrative and public service units in Vietnam. The author inherits five internal control components from the Committee of Sponsoring Organization [COSO], 2013: control environment, risk assessment, communication information, and supervision that affect financial reporting quality. The author uses a mixed research method including qualitative and quantitative, with primary data collected through a survey of 400 units with 30 observed variables, resulting in 350 valid survey forms. From there, the study analyzed EFA exploratory factor analysis and multivariate regression analysis with support from SPSS 27.0 software. Research results show that the internal control system has an impact on administrative and public service units in Vietnam, with the level of influence of the components gradually decreasing: (1) information and communication, (2) control environment, (3) control activities, (4) risk assessment, (5) monitoring. With the results of this research, it helps administrative and public service units to improve and enhance the financial reporting quality while helping to reduce and eliminate weaknesses in the internal control implementation process, in order to strengthen the internal foundation and influence positive impact on governance.

THE IMPACT OF USING INTERNAL CONTROL UNDER THE ELECTRONIC OPERATING SYSTEM

Internal control tools constitute one of the modern frameworks approved by the Committee of Sponsoring Organizations (COSO). "And the one which takes into account setting the objectives first, then estimating the possibility of those objectives being exposed to threats, then internal control procedures are designed that reduce the risks, and at the same time provide reasonable guarantees for achieving the organization's objectives and introducing all modern developments into the system. The contemporary trend of internal control focuses on the integration between managing the risks to which the organization is exposed and the internal control frameworks (Enterprise Risk Management- Integrated Framework) and its abbreviation (ERM), which provides the organization Management in conditions of uncertainty related to risks and their probabilities to be able to create and preserve value. The continuous developments in internal control systems, on the one hand, and competition between economic units, on the other hand, have led to many challenges through the use of modern technology and the innovation of new methods of development, which required the development of all sub-systems of control, including internal control systems, and then review the internal control structure and the extent of its acceptance of this computer-based technology and the effectiveness of its devices in providing information that supports the system's ability to adopt it. Based on this, the research topic was divided into five sections. The first section dealt with the research methodology, the second section dealt with the theoretical framework of the internal control system, and the third section dealt with the problems and limits of using electronic computers. The fourth section was devoted to studying the impact of using computers. The electronic section focuses on the components of the internal control system, while the fifth section is dedicated to stating the most important conclusions and recommendations.

Internal Control System and Financial Performance of Saving and Credit Cooperatives

The study aims to assess the effect of the internal control system on the perceived financial performance of saving and credit cooperatives. Internal controls were measured using four elements (i.e. control environment, risk assessment, control activities, and information and communication) as prescribed by the Tedway Committee of Sponsoring Organizations (COSO) framework. Perceived financial performance has been measured through the increase in ROA, ROE, deposit and lending, liquidity and EPS. A descriptive and casual comparative research design was adopted to describe the relationship and effect between the elements of internal control system and financial performance. Out of 86 saving and credit cooperatives registered under the legislative area of Butwal Sub-Metropolitan city, only 38 has been considered as sample. A structured questionnaire on 5 point likert scale ranging from strongly disagree to strongly agree has been adopted. The findings of the study has revealed that the SACCOs (Shaving and Credit Co-operative enjoy a sound financial performance partly because of implementing and maintaining effective internal control system.

Analisis Sistem Pengendalian Intern Penjualan Kredit PT. Medisia Sainsindo Dengan Standar COSO

This research aims to determine the internal control system for credit sales implemented by PT. Medisia Sainsindo has fulfilled the components contained in the Committee of Sponsoring Organizations (COSO). Based on the research results, it can be seen that the internal control system for credit sales of PT. Medisia Sainsindo almost meets COSO standards. 93% of the environmental control component has been implemented. 80% of the risk assessment component has been carried out. 92% of the control activity components have been carried out effectively. The information and communication component has been implemented 100%. 83% of the monitoring component has been implemented.

Analisis Sistem Pengendalian Internal Terhadap Proses Keluar – Masuk Barang PT. Global Transportindo Prima

The number of damaged and lost goods has increased, this is due to the lack of supervision carried out by the company in sorting goods that are easily broken or goods that are easily damaged by using packaging that is easily damaged, the lack of information system procedures in inputting data to prepare reports on incoming goods and out, causing an increase in the loss of goods to be sent, causing the company to have to provide compensation to customers who have lost goods and can cause a decrease in the quality of supervision of the company. Therefore, PT. Global Trasportindo Prima requires an effective and efficient information system so that it can adapt to demands to increase the speed of the process from receipt, storage, to final receipt. The research method was carried out using descriptive analysis method, this research was used to collect research data that would be obtained from PT. Global Transportindo Prima. The results of the study show that PT Global Transportindo Prima has been effective in its internal control over the incoming and outgoing goods process because it has complied with the internal control components of the COSO (committee of sponsoring organization). From the results of the above research it can be concluded: The loading and unloading process carried out at PT Global Transportindo Prima is in accordance with the procedures set by the company. Even though there were several processes that were not carried out because they were adjusted to the actual conditions that existed, overall they had complied with the existing procedures. PT Global Transportindo Prima still had not implemented a good information system so that manual recording would sometimes hamper and lack of manpower so that checking the stock of goods still uses physical files or even checks the items that are arranged. In the management of PT Global Transportindo Prima, there are many who make loans but forget to repay debts, this is due to the transfer of salaries that go to the bank.Keyword : Internal Control System

Compliance Risk of Sales and Services Tax 2.0 in Malaysian Environment: Perspectives of Tax Administrators

The objective of this study is to explore the internal and external compliance risks in the context of Sales and Services Tax 2.0 implemented in Malaysia. The foundation for this study is derived from Committee of Sponsoring Organization’s (COSO) Enterprise Risk Management (ERM) Integrated Framework, highlighting various forms of risks of organizations. Data was gathered through interviews with tax officers handling SST 2.0, and subsequently transcribed and analysed using thematic analysis. Findings indicate that organizational work culture, human resources, professionalism, and information technology makes up the internal risks while legislation, public opinion, and political influence forms the external risks. The findings provide meaningful insight for the tax authority in developing their risk management strategies in their effort to improve SST 2.0 compliance, and enhance their resilience to potential threats and challenges. Identification of risk management strategies based on the underlying risks would assist the tax authority to mitigate or eliminate negative risks while taking advantage of positive risks, and consequently improving tax compliance.

Rancangan Pengembangan Modul Penggajian pada Sistem Informasi Akuntansi Terintegrasi dengan Kerangka Kerja COSO

PT XYZ is a food and beverage trading company, in its business process it has implemented SIA for purchasing, sales, accounts payable, accounts receivable, bank cash, inventory and general ledger modules. The company has 200 employees, while the payroll system is still done manually, which can increase the risk of errors and fraud. The accounting cycle related to payroll is the HR/Payroll cycle. This study aims to determine the extent to which the current payroll system procedures are effective in terms of internal controls, identify weaknesses in internal control of payroll procedures and provide alternative solutions to correct existing weaknesses. The data analysis technique uses interactive analysis as standard for the Committee of Sponsoring Organizations (COSO) framework, then creates a new development plan for the payroll module in an integrated SIA based on COSO standards. This research uses an experimental method, its development uses the Object Oriented Analysis Design (OOAD) method, which is oriented towards model development using the Unified Model Language (UML) facility. The results of the study indicate that there are weaknesses in the form of errors in reporting, reporting takes a long time and payroll controls are still weak. Solving the problem to overcome these weaknesses requires improving the payroll system and developing a new computer-based payroll system that is integrated with the existing SIA, so that the developed system can be used efficiently and effectively.

Maturity Level of Fraud Risk Management in Tax Institutions in Indonesia

This study aims to determine the maturity level of fraud risk management in the tax payer compliance supervision function at the head office level run by VW and the XYZ units. The Enterprise Anti-Fraud Maturity Assessment Model was implemented to provide a clear picture of conditions and effectiveness, as well as the existing gaps between the implementation and ideal conditions based on the principles of COSO Fraud Risk Management. The descriptive qualitative research uses a case study approach by collecting data from semi-structured interviews with 12 informants involved in risk management and fraud risks handling, then all documents are analyzed. As for the data analysis technique, content analysis is selected. The purpose of this study is to provide a tool for DGT (The Directorate General of Taxes) to determine the role and level of fraud risk management in the taxpayer compliance supervision function. The results which are at level 2 (initial) indicate that there is still a lot of room for improvement in order to achieve the desired maturity level target. DGT, especially the VW unit and XYZ unit, are suggested to immediately integrate fraud risk management with the existing anti-fraud programs and strengthen the role of the units involved in accordance with the COSO (Committee of Sponsoring Organizations) Fraud Risk Management principles.

A Study on the Effectiveness of Internal Control System on Commercial Banks Risk Minimization in Zambia

Banks are in business of risk management and not risk avoidance. As such, risk management should be their core competency. To survive in this highly uncertain world, financial institutions must manage risk effectively. It is in this light that internal control systems are put in place in the banking sector to assist minimize risk. The purpose of this study was to investigate the effectiveness of internal control system on commercial bank risk minimization in Zambia. The study adopted a quantitative research approach, and the study population was all auditors, internal control, and risk management personnel in Zambian commercial banks. Committee of Sponsoring Organization (COSO) internal control framework was used to identify the components of an internal control system and its effectiveness. This framework was adopted because it is a model that has generally been accepted for its prescribed model on internal control appraising. Results indicated that there is a positive and significant relationship between an internal control system and risk reduction of commercial banks at 5% significance level (p=0.00 <0.05). The study results also indicated that the internal control system present in Zambian commercial banks is effective in reducing risk.

The (COSO) Framework: Implications of Internal Control Components on the Performance Manufacturing Companies

The study examines the implications of internal control components on risk assessment using the Committee of Sponsoring Organizations (COSO) framework on manufacturing companies in Erbil, Kurdistan. A multivariate analysis was applied on 250 responses in modelling the individual effects of internal control components (control environment, risk assessment, control activities, information and communication, and monitoring) on risk assessment. The results of the study indicated that the integrated internal control environment, risk assessment, control activities and monitoring components have significant positive effects on organisational performance compared to information and communications. The present study advances the literature on internal control as corporate governance and performance-enhancing tool. Additionally, it also advances internal control’s conceptual framework on organisational performance. Lastly, the results of this study advance construct and item development involving internal control components and organisational performance while testing relationships to uncover the significance of their implications in enhancing organisational performance

Essential internal control: evidence from the executive branch of the State of Ceará

PurposeThis article aims to identify management practices that evidence how internal control have been considered essential, from the edition of the State Constitutional Amendment no. 75 of 2012, within the public administration of the executive branch of the State of Ceará, during the period 2012–2021.Design/methodology/approachThe study relates the identified management practices to COSO (The Committee of Sponsoring Organizations) methodology “Internal Environment” component categories. The research is classified as basic, exploratory and bibliographic, on the theme of internal control in scientific articles published between 2015 and 2021, and documental, carried out through official documents, including the 27 Brazilian constitutions.FindingsExistence of management practices that corroborate the essentiality of internal control in Ceará.Research limitations/implicationsThe study is limited to evidencing the control practices implemented in Ceará, not evaluating them as to their quality.Practical implicationsContributions on control on constitutional-legal bases for other Brazilian Federation States.Social implicationsPossibility of introducing the research theme into various branches of scientific knowledge, such as political science and contributing to public organizations to implement policies with the proper application of resources for the benefit of society.Originality/valueThe originality of the research is in demonstrating the essentiality of internal control in the State of Ceará, from the edition of management acts performed by the executive branch, based on Constitutional Amendment 75 of 2012, which did not become a dead letter of the law, enabling other states of the federation to do the same.

Accounting Information System And Prevention Of Fraudulent Drug Supply At The Kardinah Tegal General Hospital

This study aims to determine the application of accounting information systems, internal control, factors causing stock outs, and prevention of fraud in drug supplies at Kardinah Tegal Hospital. Data collection methods used in this study were observation, interviews, and documentation. The data used consists of primary data and secondary data. The data analysis technique used is descriptive qualitative method. The results of the study explain that the application of the accounting information system for drug supplies as a whole is good, including: 1) Kardinah Hospital Tegal has operated a Pharmacy Hospital Management Information System (SIMRS) as an information system and efficient management of medicines starting from planning, procurement, receipt , distribution, and administration of invoice payments, 2) There are SOPs related to the logistics management of pharmaceutical supplies, out-of-stock handling procedures that aim to improve optimal prescription services but in practice there are inconsistencies with SOPs so it is recommended for SOP revisions, 3) The current internal control has been appropriate and has implemented internal control standards according to the Committee of Sponsoring Organization (COSO), and 4) The factors causing the scarcity of medicine supplies include vacancies at distributors, delays in delivery of goods, late payments to partners, and na available is not sufficient. To prevent fraud, Kardinah Tegal Hospital must implement healthy practices to minimize fraud, both internally and externally.

EVALUASI PENGENDALIAN INTERNAL SISTEM PENJUALAN TUNAI MENGGUNAKAN METODE CONTROL MATRIX

Cash sales are one of the important activities in a company to ensure the continuity of the company's business. For this reason, an internal control system is needed that can make cash sales activities more effective and efficient. The purpose of this study is to determine the implementation and evaluation of the cash sales internal control system at the Sana Farma 2 Pharmacy. The method used is a qualitative method. The technique used in data collection is interviews, observation, and documentation which is strengthened by a questionnaire. The data analysis tool used is the control matrix based on the COSO (Committee of Sponsoring Organizations) framework. The results of the research show that the implementation of the cash sales internal control system at the Sana Farma 2 Pharmacy has fulfilled several internal control objectives, although it is not optimal because there are still several elements that have not been implemented. We recommend that Apotek Sana Farma 2 correct the shortcomings of the internal control system for more effective inventory management.
 Keywords: Internal control system, cash sales, control matrix, COSO.

Assessing the efficacy of employee training and internal control system on financial management of small and medium scale enterprises in Nigeria

PurposeThe study assesses the efficacy of employee training and internal control system on financial management of small and medium scale enterprises (SMEs) in Abuja.Design/methodology/approachThe study adopted a quantitative approach using a structured questionnaire to sample respondents selected through stratified proportionate sampling, data were collected from managers/owners of SMEs in Abuja.FindingsThe result shows that employee training, control environment, information and communication and risk assessment have a significant and positive effect on financial management of SMEs. Control activities have a positive and insignificant effect on financial management of SMEs while monitoring activities has a negative and significant effect on financial management of SMEs.Practical implicationsThe findings of this study will assist government and owner/managers to identify strategies relevant to SMEs financial management. More importantly, the empirical shreds of evidence revealed that employee training needs to be employed by SMEs' owners/managers to integrate, build, modify and reconfigure their internal control system towards achieving effective financial management.Originality/valueCurrently, no study has been found in the literature, which had been conducted on the relationships between these predictors (employee training and internal control system) on SMEs financial management. Similarly, no study has been conducted on the effects of an internal control system using the five dimensions of committee of sponsoring organization (COSO) altogether on financial management based on the currently available literature. Precisely, the study is designed to fill the aforementioned gaps.

Internal audit planning using spherical fuzzy ELECTRE

Internal audit is an independent and objective assurance and consulting activity that aims to improve the operations of an organization and add value to them. Planning internal audit by prioritizing the units to be audit is critical in terms of effective use of available audit and financial resources. In this paper, a new ELimination and Choice Translating Reality (ELECTRE) based decision support model is developed for addressing an internal audit prioritization problem. Spherical fuzzy sets are used for modeling the uncertainty in the nature of the problem and three different approaches are proposed within the study. The first approach is constructed with gradual concordance and discordance sets by comparing spherical fuzzy membership, non-membership, and hesitancy degrees of alternatives; the second approach is developed based on a single type of outranking relation obtained by utilizing score and accuracy functions of spherical fuzzy sets, and the third approach provides an increased fuzziness modeling capacity by using interval-valued spherical fuzzy sets. In the application part of the study, the units of an organization are prioritized for internal audit activity based on five components of the internationally recognized Committee of Sponsoring Organizations (COSO) framework. Sensitivity analyses for decision-maker and criterion weights and a comparative analysis with six other state-of-the-art multi-criteria decision making (MCDM) models are also presented to analyze the consistency and validity of the proposed spherical fuzzy ELECTRE model.

Evaluation of the cause-and-effect relationship of internal controls on financial reporting in the Ministry of Health and Social Services, Namibia

This article evaluates the effect of the internal control environment on the quality of financial reporting in the Ministry of Health and Social Services (MOHSS) in Namibia. The Internal Control- Integrated Conceptual Framework of the Committee of Sponsoring Organizations (COSO) of the Treadway Commission was applied as the standard of measurement against the variable internal control, and the Conceptual Framework for Financial Reporting of the International Financial Reporting Standards (IFRS) was used to measure the qualitative characteristics of the financial reporting process. A mixed research method was used to evaluate the cause and effect relationship between the key variables and to measure the perceptions of the respondents on the quality of the financial report. Probability sampling techniques were used on the 269 staff members of the MOHSS, and data were analysed using both descriptive and inferential statistics, using the SPSS software programme. The validity and reliability of data were computed using Cronbach’s Alpha. The results of the study indicated that there is a positive relationship between the key variables although it is weak. Therefore, the study recommends the strengthening of governance systems to improve the safeguarding of financial resources.

Pengendalian Internal Pada Perusahaan Start Up

Internal Control System is one of the tools for management to control all operational activities in line to achieve ultimate goals. As a start-up company, internal control is a must. This research conduct to analyzes internal control systems in handling inventory of vegetables and fruit-based on COSO (Committee of Sponsoring Organization) theory. This type of research is a qualitative descriptive approach. Data is obtained through interviews with informants. The results showed that the company has largely implemented internal controls on vegetable and fruit inventory that according to internal control standards according to COSO. But, it is not fully implemented for environmental control and supervision activities.

SISTEM PENGENDALIAN INTERNAL PENERIMAAN KAS (Studi Kasus Pada Cv Sekartika Jati Rencana)

The aim of this study was to assess the effectiveness of the internal cash control system conducted by CV Sekartika Jati Rencana. Internal control system is a procedure used by management as a monitoring tool that every policy has been carried out by all employees. The internal control system of cash receipts is used to maintain the company's wealth, especially cash. This study analyzes the internal control system of cash receipts applied by CV Sekartika Jati Rencana and compared with the theory of internal control systems proposed by the Committee of Sponsoring Organizations (COSO). The results of this study are all internal cash control systems implemented by the CV Sekartika Jati Rencana have been effectively proven by the form that has been numbered printed, each sales document has been printed in duplicate and checking periodically. But there are some internal control systems for cash receipts that are still not effective

Tauhid and Taqwa: The Soul in the COSO-ERM Framework -An Imaginary Research Dialogue-

This research is an imaginary dialogue between two internal auditors of a state university. They are called as a religious senior auditor and a junior auditor. The imaginary dialogue used spirituality in order to avoid misunderstanding and heartache of each other. Both of them discuss current issues in regard to internal control as a soul and foundation to achieve the organization's objectives. This research is to discuss the concept of internal control built by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), whether is it enough to be the guardian system or is there missing elements that should be discovered? They will use the COSO-ERM (Entreprises Risk Management) as the modification of COSO, as the internal control world considers risk management is the key to prevent an organization from failure nowadays. Finally, this research offer a deconstruction of the COSO-ERM framework to become The Tauhid Taqwa-COSO-ERM Framework with Tauhid and Taqwa as the most foundation of all things in the framework especially for the human as the operator in all level.Keywords: tauhid, taqwa, COSO-ERM, and internal control

THE ROLE OF INTERNAL AUDIT IN THE FIGHT AGAINST CYBER CRIME

The internet is constantly changing the way we live and conduct business. Global business surroundings impose all organizations across to have a secure digital infrastructure for fighting against cybercrime. Cyber crime is on the raise in this decade. Cyber crime is a criminal activity that is focused against compromising security of information systems in enterprises, in order to acquire certain profits, or to incur damage, theft or loss. Types of cyber crime include theft, evasion, or using information in order to unlawfully obtain profits from them. This paper will present certain information about cyber crime and most common types of it. According to international standards for internal audits, internal auditors are authorized for fight against fraud, which means authorization for fight against cyber crime. Main purpose of this paper is to find model for organizing internal audit for purpose of fighting cyber crime. Therefore, it is necessary to determine: internal audit standards that your organization must adhere to in fight against cybercrime, identify security requirements for standards, determine the goals, risks and security policy of the organization, raise employee awareness of the dangers of cybercrime, involve top management in the orbit against cybercrime, conduct employee training on data security and the like. Cyber security is basically about managing future risk, and requires insight into current and future vulnerabilities and how to prevent or reduce them, the likelihood of threats and costs associated with potential outcomes, and how to mitigate them. Internal auditors must be aware of impending regulatory changes based on IIA standards (The International Standards for the Professional Practice of Internal Auditing) related to computer security. Internal auditors should understand the impact of cyber threats on the organization. In particular, they should include this in their internal audit plan based on the risk of cybercrime. Internal auditors should have a strong partnership with the CIO (Chief Information Officer) and CISO (Chief Information Security Officer), for the sake of a trusted advisor in the fight against cybercrime. Internal auditors should provide an independent overview of the cyber security strategy. Modal will be based on COSO (The Committee of Sponsoring Organizations of the Treadway Commission’s) Internal Control — Integrated Framework and will feature five core principles: 1) creating control environment for fighting against cyber crime, 2) risk assessment for cyber crime, 3) projecting and implementing activities for fighting against cyber crime, and 5) monitoring activities. Research results will show new scientific facts and knowledge about methods for fighting cyber crime worldwide. Managers and internal auditors will have practical benefit from research results for implementing cyber crime prevention programs.