Effective Internal Control System Research Articles

Assessing the of Effect of Risk Assessment on Detection and Prevention of Fraud in Banking Sector in Kenya

The banking sector in different parts of the world have challenges in detecting and preventing frauds due to weak controls. However, an effective system if well implemented an organization is capable of preventing and detecting fraudulent activities. The main purpose of this study was to evaluate the effect of internal control system on detection and prevention of frauds in banking sector in Kenya a case of Consolidated Bank of Kenya Ltd. This study was anchored under Attribution theory. The study adopted qualitative and quantitative methods, which assisted in collecting and analysing the data. This study also adopted a descriptive research design to investigate the study variables. Mean, percentages, frequencies and standard deviation were used in descriptive statistics analysis and inferential regression such as multiple regression and correlation were applied to analyse the relationship between the study variable and the significant of the variables respectively. The study targeted a population of 130 staff grouped in 4 subgroups. The outcomes of the research demonstrated that risk assessment had a positive and substantial link with fraud detection and prevention. According to the report, new techniques of improving fraud detection and prevention should be devised, and government rules should be reviewed. Additional study should be done using a cross-sectional research design that includes a questionnaire, an interview, and a secondary data schedule.

Evaluating the Effectiveness of Internal Control System in Government Offices: Evidence from Arsi Zone Public Offices, Arsi, Ethiopia

Evaluating the Effectiveness of Internal Control System in Government Offices: Evidence from Arsi Zone Public Offices, Arsi, Ethiopia

Internal Control System and Audit Opinion: Case from South Sulawesi in Indonesia

This research aims at testing the effect of internal control system on the audit opinion. The type of this research is quantitative. The sample of this research was local governments in South Sulawesi of Indonesia. The data were analyzed using ordinal logistic regression. The result of this research found that internal control system identified through weaknesses in the accounting and reporting system, the control system of the implementation of revenue and expenditure budget, and the internal control structure, have negative effects on the audit opinion of financial statements. The higher the weaknesses found in the internal control system, the more difficult the local governments to obtain unqualified opinion

The role of the audit committee to support the quality of financial reporting some lessons from Sox Act

The present study aims to demonstrate the effectiveness of the internal control system in large economic units as a result of the volume of business they practice. In light of the size of activity practiced by the General Company for the Distribution of Central Electricity through the distribution of electrical energy to six Iraqi provinces, there must be an important role for internal control in monitoring this activity. Hence, the present study focuses on evaluating the effectiveness of internal control in the company and its branches in light of the ethical code for senior officials contained in the Sarbanes- Oxley Act in addition to some other requirements that were dealt with by the law. The analysis of the data is based on some requirements in the law In addition to a questionnaire prepared for this purpose to measure the application of the code of ethical conduct for senior officials and to demonstrate the effectiveness of an efficient internal control system. 85 questionnaire forms were distributed to workers in the control, internal auditing, and accounting departments of the company and its branches. 74 forms were suitable for analysis. The present study concludes that there are indications that the internal control system is not independent in the provinces electricity distribution companies and the subsidiary companies. It is mentioned in the organizational structure of the company that the control and auditing department is subordinate to the director of the company and his/her assistants, and that it is not directly related to the official of the control and auditing department at the company's headquarters, which may cause conflict in Interests and lack of coordination in control procedures.

Mediation role of management commitment on improving fraud prevention in primary healthcare: Empirical evidence from Indonesia

Fraud in primary healthcare (PHC) is an important and relevant topic to study because of its impact on the state in terms of financial losses and a decrease in the quality of PHC. This study is also relevant because previous studies that formulate a model and measure fraud prevention comprehensively are still limited. It aims to examine the mediating role of management commitment on the effect of apparatus competence and internal control system on fraud prevention. The sample comprises 78 PHCs and 234 senior managers as respondents in Aceh Province, Indonesia. Data for this study were collected using questionnaires from March to July 2021. Structural equation modeling was used to examine a causal relationship between the variables. The result shows that apparatus competence and internal control system positively affect management commitment and fraud prevention with p-value 0.000 (p > 0.01). Likewise, management commitment has a positive effect on fraud prevention with p-value 0.000 (p > 0.01). The findings show that management commitment mediates the relationship between the internal control system and fraud prevention. At the same time, the apparatus competence does not directly affect fraud prevention. The practical significance of this study is the importance of implementing an effective internal control system and high management commitment as a mediating variable for fraud prevention. AcknowledgmentsThe authors are very thankful to the University of Muhammadiyah Aceh, which has supported this study, and all those who have contributed to this investigation.

Prevention, Detection and Control of Fraud by Pension Fund Administrators (PFA) and Pension Fund Custodians (PFC) Under the Pension Reform Acts 2004 And 2014

This paper examines the challenges of prevention, detection and control of fraud by Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs) under the Pension Reform Acts, 2004 and 2014. It holds the view that since the activities of the PFAs and PFCs are critical to the attainment of the objectives of the Acts, their prescribed roles must be sufficiently monitored for compliance. The paper examines the concept of fraud, the roles of PFAs and PFCs and suggests some of the following control measures against fraud in pension fund management: installation of an effective accounting and internal control systems, ensuring that employees understand relevant codes of conduct, establishment of virile internal audit and appointment of audit committee among others. The paper concludes by recommending some for reaching steps to prevent and control fraud in pension funds management. These include; monitoring of RSA opening by senior staff, strengthening of pay procedure, and recruitment of right caliber of staff etc. Keywords: Internal Control, Compliance, Pension Fund Administrator, Pension Fund Custodians 1. INTRODUCTION

THE EFFECT OF GOOD GOVERNANCE IMPLEMENTATION, GOVERNMENT ACCOUNTING STANDARDS, EFFECTIVENESS OF INTERNAL CONTROL SYSTEM AND HUMAN RESOURCE QUALITY ON THE QUALITY OF REGIONAL TASK FORCE FINANCIAL STATEMENTS

The purpose of this research is examine the effect of implementation of Good Governance, Government Accounting Standards, Effectiveness of Internal Control System and Quality of Human Resources to the Quality of Financial Statements in the local municipality and regency (SKPD) Ambon, Maluku province. The population are 90 SKPD in the province of Maluku and each sample represented by one respondent. This research using quantitative approach, and data collection was done directly by using the questionnaire. Data were analyzed using Partial Least Square Equational Structural Models (PLS-SEM) with SmartPLS program. The results showed that the implementation of good governance, Government Accounting Standards, Quality of Human Resources positive significantly affect the Quality of Financial Statements Municipal area and the regency of Ambon, Maluku. Effectiveness of Internal Control System is not significant to the Quality of the Financial Statements in the local municipality and regency Ambon, Maluku.

Effect of Internal Control Systems on Financial Performance of Selected Commercial Banks in Selected Counties in Kenya

Effect of Internal Control Systems on Financial Performance of Selected Commercial Banks in Selected Counties in Kenya

Factors Influencing the Effectiveness of Internal Control Systems: A Case Study of Commercial Banks in Ghana

This study examines the factors influencing the effectiveness of internal control systems in the banking industry in Ghana. The study adopted the quantitative approach using the survey design to obtain data from 130 participants from selected Commercial banks in Ghana. For data analysis, Statistical Package for the Social Sciences (SPSS version 24) was utilized. A number of descriptive statistical tests and in a combination of Exploration Factor Analysis (EFA) and Confirmation Factor Analysis (CFA) was used. The statistical tools used include mean, standard deviation, frequency and Ordinary Least squares (OLS) regression. The study found critical factors driving Internal Control system (ICS) within the banking sector in Ghana to include the environment control, risk assessment, control activities, information communication technology (ICT), and monitoring activities. The study discovered that some of the ways required to improve ICS include consistent revision of policies and procedures as well as provision of adequate training and communication on ICS to staff. It is also recommended that employees should be involved in the development of control mechanisms to make them own the system which will promote its enforcement to influence operational efficiency.

Internal Control System and Fraud Prevention of Quoted Financial Services Firms in Nigeria: A Smart PLS-SEM Approach

Fraud prevention involves the integration of all efforts that may be used to reduce or limit the opportunities to commit fraud in an organization. It is tool for protecting the collapse of business activities and it is widely use in the corporate world to manage business challenges. The internal control system is use manage risk and to prevent fraud and errors in order to prevent business losses and liquidation of business. On this basis, the study seeks to examine the effect of internal control system on fraud prevention of financial services firms in Nigeria. The population is 284 respondents from the listed financial services firms in Nigeria. A cluster sampling technique was adopted for the study. The data was sources through the primary sources and a structure questionnaire were administered to the respondents through the use of five-point Liker scale system, and the SMART-PLS-3-SEM was used to analyze the fitness of the data and test the research hypothesis. A constructive reliability and validity, the discriminant validity measure and cross loadings were used to test the fitness of the model. Path coefficient, predictive relevance of exogenous. Findings from the study revealed that control environment and monitoring were found to have a positive and significant effect on fraud prevention, while the information and communication has a negative and significant effect on fraud prevention. Risk assessment show an insignificant positive effect on fraud prevention while control activities is negative and insignificant effect on fraud prevention of the listed financial services firms in Nigeria. In conclusion, the study found that internal control system has a significant influence on fraud prevention. It is recommended among others that the management of financial services firms should maintain the used in control environment, monitoring system because they play a greater in effect on fraud prevention. Also, regulator agency such as CBN, EFCC and ICPC should develop an internal control framework and policy that will guide the financial services firm in Nigeria.

STUDI LITERATUR: PERAN AUDIT INTERNAL DALAM UPAYA MENCEGAH DAN MENDETEKSI KECURANGAN (FRAUD)

This research is a literature review that aims to determine the role of internal audit in preventing and detecting fraud in universities. An effective internal control system is an organization’s best protection against fraud prevention. The role of internal audit is very necessary to detect and prevent fraud in universities. Internal audit must be able to help universities in implementing effective control through evaluation of effectiveness and efficiency as well as encouraging universities to make continuous improvements. Internal audit plays a role in assisting universities in achieving their goals by taking an approach to design, evaluate, and improve risk management, university governance processes, and university control effectiveness. Internal audit at universities also acts as a supervisor to prevent and detect fraudulent acts.

PENGARUH SISTEM PENGENDALIAN INTERNAL, PERILAKU TIDAK ETIS DAN BUDAYA ORGANISASI TERHADAP KECENDRUNGAN KECURANGAN (FRAUD) PADA LEMBAGA PEKREDITAN DESA (LPD) SE-KECAMATAN SUSUT

Fraud is a deliberate fraud that causes losses to other parties and provides benefits to the perpetrator of the fraud and / or his group. This study aims to determine the effect of internal control systems, unethical behavior, and organizational culture on the (fraud) tendency to cheat. This research was conducted at the Village Credit Institution (LPD) in Susut District. The sample in this study were 167 LPD employees. The sampling method used is proposive sampling. The data analysis technique used in this research is descriptive statistics, validity test, reliability test, classical assumption test, multiple linear regression, coefficient of determination, F test, and t test. From the results of this study that the internal control system variable has no effect on the tendency of fraud. The variable of unethical behavior has a positive and significant effect on the (fraud) tendency to cheat. Organizational culture variables have a negative and significant effect on the (fraud) tendency to cheat.

Nexus between the COSO framework and the effectiveness of internal control systems: public universities' perspectives

Nexus between the COSO framework and the effectiveness of internal control systems: public universities' perspectives

Effectiveness of Internal Control System as Early Detection Tool in Fraud Prevention of Village Fund Management

Effectiveness of Internal Control System as Early Detection Tool in Fraud Prevention of Village Fund Management

The role of the audit committee and employee well-being in controlling employee fraud

Fraud is still a problem in the banking industry. Association of Certified Fraud Examiners (ACFE) reported that banks experienced the highest number of fraud cases compared to other types of businesses. This study aimed to demonstrate the effect of the audit committee’s size, gender, expertise, independence, and employee well-being on employee fraud. The study on fraud uses questionnaire data to identify employee fraud (Fathi, Ghani, Said, & Puspitasari, 2017; Nawawi & Salin, 2018). We complement the previous study by using the number of cases as an indicator of employee fraud. Using a sample of 14 Islamic banks, we find that audit committee members’ accounting expertise and employee well-being can influence employees’ willingness to commit fraud. After overcoming the problem of endogeneity and robustness tests, the results of our study were consistent. The number of audit committee members, gender, and independence have not impacted fraud control. The expertise of the audit committee and employee well-being can be an effective internal control system in reducing fraud. This study adds to previous studies that have explained fraud by using employee perceptions and financial ratio indicators to detect director fraud. This study uses the number of employee fraud cases reported by the bank.

The role of internal control in fraud prevention and detection

An effective internal control system should be able to provide managers with increased accountability for their plans and reasonably ensure that the plans they guide reach the set goals. However, effective systems are not limited to digital systems but also systems that can prevent and detect fraudulent activities. The overall goal of this research is to analyze the impact of internal control systems on fraud detection and prevention. It is necessary to set an appropriate tone at the top, and top management should encourage ethical behaviour in a transparent manner. A risk assessment process needs to be set up, and the risk of fraud can be assessed by brainstorming to deceive the organization. It is necessary to create report and the investigation process. Thus, this work attempted to review and analyze 20 articles among different countries to reveal the importance of internal control system in preventing and detecting fraud in commercial companies. It is discovered that it has a significant role in fraud prevention.

ВНУТРЕННИЙ КОНТРОЛЬ И ЕГО ПОТЕНЦИАЛ В ВЫЯВЛЕНИИ РИСКОВ ИСКАЖЕНИЯ БУХГАЛТЕРСКОЙ ОТЧЕТНОСТИ

Building an effective internal control system contributes to obtaining complete and reliable information necessary for business owners and partners to make current, strategic management decisions and ensure business continuity. In order to increase the effectiveness of internal control in the modern economic realities, it is preferable to focus on timely identification and prevention of potential risks of misrepresentation of financial statements and manipulation of their data due to fraudulent actions. The purpose of the study is to substantiate approaches to the development of an effective internal control design as a factor of increasing the level of development of its potential in identifying the risks of manipulation of financial data. In the course of the study, general scientific methods of analysis, synthesis, systematization, data processing, comparison and generalization have been applied. The authors investigate the challenges and threats of misrepresentation of reporting data, signaling the loss of resources as a result of fraudulent actions. The article reveals a conceptual approach to the construction of an effective internal control design aimed at neutralizing the growing risks of fraud and manipulation of financial statements data on assets, capital and other information arising during communication. The results of the research presented in the article are of theoretical and practical significance, and can be of major use for companies when designing an internal control system, as well as in the educational process when teaching accounting and control disciplines.

The Zeitgeist of "Financial Reporting Quality" Predictors: An Empirical Study among Local Governments (Districts) in Indonesia

The research investigated the relationship among FRQ, ICS, RPM, and COR as moderating variables. The research recommends that local governments should improve in the field of financial management and implement an effective internal control system. Aligning the research problem and objectives, this research adopted the agency theory for local government. This theory includes information asymmetry, where the agent has more information and understands more about the actual financial position than the principal. Modern democracies are based on a series of principal-agent relationships, which may lead to problems in the public sector. In this research, 257 qualified questionnaires were collected from local governments in Indonesia, using self-administered surveys. Furthermore, Partial Least Square-Structural Equation Modelling (PLS-SEM) technique was used for data analysis. The results showed that ICS, COR, and RPM have a positive relationship with FRQ, while the hypothesis that COR strengthens the effect of ICS on FRQ was rejected. High COR does not significantly improve the FRQ without being supported by a good ICS. With a high or low COR, the ICS will continue to be carried out properly by leaders and superiors. Therefore, a good COR does not significantly moderate the effect of the ICS on the FRQ. The quality of financial reports is the result of accounting activities that can provide financial information which can be understood by users and be used for decision-making in the future.

ОРГАНИЗАЦИЯ КОНТРОЛЬНЫХ ПРОВЕРОК ПОРЯДКА ПРОВЕДЕНИЯ ИНВЕНТАРИЗАЦИИ НА ПРОМЫШЛЕННЫХ ПРЕДПРИЯТИЯХ

An effective management system of an enterprise directly depends on the current system of internal control and risk management. One of the elements of the internal control system is the systematic conduct of inspections of the correctness of the inventory in order to minimize the risks of theft of property, false accounting and reporting data. Documentary verification and control recalculation are used as methods of conducting control procedures. Currently, when optimizing the company's management system, more and more attention is paid to building an effective internal control system and responding promptly to risks.

УЧЁТНАЯ ПОЛИТИКА: ИНСТРУМЕНТ КОНТРОЛЯ ФАКТОВ ХОЗЯЙСТВЕННОЙ ЖИЗНИ

One of the most significant directions in modern conditions of increasing the productivity and effectiveness of the organization's functioning is the optimization of the process of accounting data formation. The heads of large companies begin to understand that business success can be achieved only thanks to a competently built and efficiently functioning accounting data system. This requires, first of all, the formation of adequate methodological tools that contribute to the development of an effective organizational mechanism for creating useful, objective and adequate accounting data. The accounting system is a key component of internal control. Control is an objectively necessary component of the activity of any economic entity. Unfortunately, in most Russian enterprises and organizations, the internal control system is either not created at all, or is ineffective. This is one of the reasons for the large number of economic crimes. The whole range of internal control tools ensures that the organization achieves its goals and objectives. With the correct application of control mechanisms and methods, the risk of losses is minimized. The issues of competent organization of an effective internal control system are relevant for every modern enterprise and organization, regardless of the type and areas of activity. The article discusses the issues of building an internal control system. The theoretical aspects of the formation of tools contributing to the control of each fact of economic activity in the organization are investigated. Its formulation should be carried out taking into account the current requirements when building an internal control system, which involve reducing the negative impact of various factors on the efficiency of enterprise management. One of the instruments of internal control is the accounting policy of the organization, certain provisions of which affect the achievement of the objectives of the control-oriented accounting system.