Effective Internal Control System Research Articles

The Effect of the Government Internal Control System on the Performance of Government Agencies

This study aims to analyze the impact of the Government Internal Control System, budget, and organizational commitment on the performance of government agencies in Bogor City. Using a descriptive survey method, this study involves 36 Regional Government Organizations, with 10 Regional Government Organizations purposively selected as the sample. Data were collected through questionnaires, and results were analyzed using multiple linear regression to test the hypotheses. The findings indicate that Internal Control System, budget, and organizational commitment significantly influence government agency performance, both overall and partially. The combined influence of these three variables on the performance of government agencies in Bogor City reaches 44.5%. These findings highlight the importance of effective Internal Control System implementation, adequate budget allocation, and strong organizational commitment in improving government performance. This study contributes by providing insights for policymakers in Bogor City to strengthen these aspects to achieve more optimal governmental performance.

Factors affecting the effectiveness of internal control systems in small and medium enterprises operating in the trade and service sector in Binh Duong Province

This study aims to identify the factors affecting the effectiveness of internal control systems (ICS) in small and medium-sized enterprises (SMEs) operating in the trade and service sector in Binh Duong Province, Vietnam. The key factors examined include risk assessment, control environment, information and communication, control activities, and monitoring. The survey of 155 samples and multivariate regression analysis indicate that four main factors influence ICS effectiveness: risk assessment, control environment, control activities, and monitoring, with the control environment being the most impactful. Based on these findings, the study proposes management implications to enhance ICS for SMEs, including the development and implementation of appropriate ICS systems. This contributes to improved management efficiency and aids SMEs in achieving their operational, reporting, and compliance objectives. Keywords: Internal Control Systems, Trade Enterprises, Effectiveness, And Binh Duong

IMPORTANCE OF INTERNAL CONTROL SYSTEMS ON DETECTION AND PREVENTION OF FRAUD IN COMMERCIAL BANKS OF NEPAL

This research aims to study the importance of internal control systems to detection and prevention of fraud in commercial banks in Nepal. Advanced authentication techniques, vigilant monitoring for questionable activity, frequent staff education and awareness campaigns, and robust encryption for confidential information are all part of the process of identifying and preventing fraud. Effective internal control mechanisms are essential to the identification and aberrance of fraud in financial organizations. This study used descriptive research design to interpret the data. Using simple random sampling Ten commercial banks were selected as sample out of total Twenty commercial banks. Three level staff officer, manager, and executive were chosen on the study. Structured questionnaire was distributed to Fifty respondents but only 48 were collected and used in the study. Chi square test was applied to analyze the data. Findings of this study found that fraud in the organization is done by concealed hand and inefficient allocation of duties and authorities can not detect and prevent the fraud in commercial banks in Nepal. To detect and prevent the fraud the commercial banks need to apply effective internal control systems, allocate the duties and authorities in systematic way.

Integrity as a Moderator of the Influence of the Internal Control System on Accounting Fraud

Organizations in the financial sector, like the Village Credit Institution (LPD) in Bali, are highly prone to accounting fraud. Despite their importance, fraudulent actions by LPD managers are still common. To reduce fraud, an effective internal control system is essential. Motivated by inconsistent results in previous studies, this research introduces individual integrity as a moderating variable. The study focuses on LPDs in Badung Regency, using purposive sampling to select participants based on specific criteria. The criteria used as the basis for selecting sample members in this study were LPDs with healthy and fairly healthy categories, totaling 71 LPDs. Meanwhile, the respondents to the study in each LPD were the Head of LPD, LPD Treasurer and Credit Division, while the number of respondents was 213 research respondents. The data analysis technique in this study uses the structural equation modeling (SEM) method based on partial least square (PLS). The statistical test results obtained the results that the internal control system variable has a significant negative effect on the tendency of accounting fraud. While the individual integrity level variable strengthens the influence of the internal control system on the tendency of accounting fraud.

Internal Controls: Tool for the company’s success

This project is about analyzing the role and importance of the internal control system over the organization’s effectiveness and efficiency. For the research purposes, the impact and the commitment of the control environment are discussed over the following topics: a) corporate governance, b) reporting system, c) fraud risk and other unlawful acts. The research was conducted in developing countries, with a specific focus on Georgia, where the significance of internal controls is a relatively new and emerging concept in the market. The primary research was done by using the qualitative methodology by referring to the purposive sampling. The data obtained through the primary research were analyzed and presented mainly by the frequency tables and pie charts. The study shows that the investment in implementing and/or improving the internal controls are paid off by the creation of the transparent and sound business entity. But there were found a number of areas that need to be considered by the company’s management in order to reap all the benefits that could be achieved by creating the effective internal control system.

Analysis of factors affecting on local government’s financial losses in North Sulawesi

This study intends to examine if internal control effectivity, audit findings, audit opinion, completion of follow up audit results and characteristics of regional head have impacts on local government’s financial losses. The study will use district and city local governments in North Sulawesi province as a case study to examine this relationship. Using a sample of 80 respondents in the year 2024, this study draws on primary sources to examine all of the local governments in North Sulawesi Province. Multiple linear regression analysis was processed by Smart PLS version 3.0 software program in order to analyze data and evaluate hypothesis. This study demonstrate that: (1) effectiveness of internal control system has a negative and significant effect on local government’s financial losses; (2) audit findings has negative and significant effect on local government’s financial losses; (3) audit opinion has negative and significant effect on local government’s financial losses; (4) completion of follow up audit results has negative and significant effect on local government’s financial losses; and (5) characteristics of regional heads has negative and significant effect on local government’s financial losses.

ASSESSMENT OF COMPONENTS OF THE INTERNAL CONTROL SYSTEM FOR THE PURPOSE OF RISK MANAGEMENT OF ORGANIZATIONS

An effective internal control system is closely related to the risk management of the organization, namely, it reduces the risks of failure to achieve the set goals and, according to the COSO concept, provides reasonable assurance of their achievement. The subject of the study is the assessment of the components of the internal control system for the purpose of risk management of organizations. The object of the study is the internal control system of the organization. The article raises the problem of developing a methodology for assessing the formation of all components of the ICS in accordance with the COSO model. The problem lies in the insufficient number of studies on the systematization of control procedures for each component of the ICS in the context of assessing the system, describing standard and non-standard situations that must be responded to promptly and how to assess such situations in the context of internal control and risk management through qualitative indicators that are not measurable. Model. To substantiate the methodology for assessing the formation of all components of the ICS in accordance with the COSO model, the criterion for assessing and measuring non-financial indicators of financial stability of organizations is presented. The study uses the grouping method, which allows studying the interrelations of phenomena, as well as their interdependencies, to identify the influence of certain factors and trends. The article uses the comparative method as the most common method of analysis, as well as the methods of induction and synthesis. Conclusions. The methodology for assessing the formation of ICS components in accordance with the COSO model in organizations is of theoretical significance in terms of developing scientific and theoretical provisions concerning the construction of internal control and improving the effectiveness of ICS, as well as practical significance in the context of applying the developed package of documents. Practical significance. As a result, the methodology for assessing the formation of all ICS components in accordance with the COSO model was substantiated, a number of documents were developed that systematized the indicators for assessing the ICS components, including non-financial indicators. It is proposed to form a map of typical situations: standard and non-standard, as well as situations with increased complexity, allowing you to create new algorithms for action to reduce risk. Originality. The author's contribution is to develop a methodology for assessing the formation of all ICS components in accordance with the COSO model.

Exploring the Role of Internal Control Systems in Financial Statement Quality under Coercive Pressure in Government Entities

Objective - This study examines the influence of coercive pressure on financial statement quality and the mediating role of internal control systems in central government accounting entities of ministries/institutions partnering with the State Treasury Service Office of Malang (KPPN Malang).Design/Methodology - The research sample was collected by purposive sampling questionnaire with an 84.38% return rate. It comprised 216 respondents of staff and managers responsible for preparing financial statements in central government work units of ministries/institutions partnering with KPPN Malang. Research data were analyzed using the Partial Least Squares (PLS) technique to predict the relationships between coercive pressure, financial statement quality, and the mediating role of internal control systems.Results - It was found that coercive pressure positively influences financial statement quality. Coercive pressure has a positive effect on internal control systems, and internal control systems have a positive impact on financial statement quality. Meanwhile, internal control systems can mediate the relationship between coercive pressure and financial statement quality.Research limitations/implications - The research findings have practical implications that suggest coercive pressures from stakeholders demanding high-quality financial statements should be responded to by implementing effective internal control systems to ensure the quality of presented financial statements.Novelty/Originality - The novelty of this research lies in examining the mediating role of internal control systems in the relationship between coercive pressure and financial statement quality, which has not been discussed in existing studies.

Exploring the dynamics of internal audit effectiveness: Unravelling the mediating effect of internal auditors’ ethical conduct

The research investigates the dynamics of internal audit effectiveness and the mediating effect of internal auditors’ ethical conduct. The impact of internal auditors' ethical conduct on the management's support for the internal audit department and the effective internal control system monitoring is examined, extending the ideas of the agency and policeman theories. One hundred sixty-six responses from the chief and deputy chief internal auditors of Kano state MDAs were used as a sample group in this quantitative study, and they included cross-sectional and correlational methods. Partial Least Squares Structural Equation Modelling (PLS-SEM) was used to analyze the sample data. The internal auditors' ethical conduct served as a mediator in the internal audit effectiveness model, as supported by the data. The study failed to support the previous findings regarding the direct effects of management support for internal audit departments and effective monitoring of internal control systems on internal audit effectiveness. Still, the results validated the hypothesis that the mediating effect of internal auditors’ ethical conduct on the effectiveness of internal audits on all predictors. The analysis confirmed that conducting internal audits should be a strategic priority for professional associations and legislators.

PENGARUH SISTEM PENGENDALIAN INTERNAL DAN KEJELASAN SASARAN ANGGARAN TERHADAP KINERJA MANAJERIAL DI PERUMDA TIRTA HIDAYAH KOTA BENGKULU

Manager participation in budget preparation and clarity of budget targets can influence performance with an effective internal control system. Research objectives (1) to determine the effect of the internal control system on managerial performance (2) to determine the effect of clarity of budget targets on managerial performance, (3) to determine the effect of the internal control system and clarity of budget targets on managerial performance. The research was carried out at Perumda Tirta Hidayah, Bengkulu City. Respondents were all 47 managerial people. Data collection used a Google Form questionnaire, shared online via WhatsApp messages. Data analysis uses multiple linear regression models and is processed with SPSS software. The results of the research that has been carried out show that partially the internal control system variables have a positive effect on the managerial performance of Perumda Tirta Hidayah, Bengkulu City. Partially, clarity of budget targets has a positive effect on the managerial performance of Perumda Tirta Hidayah, Bengkulu City. Simultaneously, the variables of the internal control system and clarity of budget targets have a positive effect on the managerial performance of Perumda Tirta Hidayah, Bengkulu City Keywords: Internal Control System, Clarity of Budget Targets, Managerial Performance

Analisis sistem pengendalian internal prosedur pengeluaran kas: COSO ICIF 2013

Financial management plays a crucial role in the survival and growth of companies. Cash disbursement is a common transaction in companies, necessitating effective internal control systems to prevent fraud or misappropriation. This study aims to analyze the internal control system and evaluate the internal control system over cash disbursements at PT WE, a mining consulting company in Yogyakarta. The research method used is descriptive-evaluative with a qualitative approach. Data were collected through direct observation and interviews with relevant staff. Evaluation was conducted based on the 17 principles within the five main components of the COSO Internal Control—Integrated Framework 2013. The results indicate that PT WE has implemented some internal control principles effectively, but there are still weaknesses in interdepartmental coordination, risk identification, and cash disbursement procedures. Based on the findings, it is recommended that PT WE improve coordination and communication between departments, systematically identify risks, and enhance cash disbursement procedures by establishing clear protocols, segregating related tasks, and periodically evaluating the internal control system.

Analysis Of The Effectiveness Of The Internal Control System For Cash Receipts And Disbursements At The Modern Entreprenur Darul Musthofa Islamic Boarding School 2021-2022

This research aims to investigate the effectiveness of the internal control system for cash receipts and disbursements at entrepreneurial modern boarding school darul musthofa. The research employs a qualitative descriptive approach with the research subject is the Entrepreneurial Modern Boarding School Darul Musthofa. Data collection techniques including interviews, observations, and documentation. The findings indicate that the Modern Entrepreneurial Boarding School Darul Musthofa has successfully implemented an effective internal control system for cash inflow and outflow in line with accounting principles. The organizational structure, which segregates duties and responsibilities in cash handling, enhances accountability. Concrete steps such as digitization of records, regular monitoring, and authorization by the treasurer and head of the boarding school ensure accuracy, transparency, and efficiency in financial record-keeping. Structural separation, authorization, detailed recording, and risk monitoring through online financial transactions reflect the boarding school's commitment to modern financial management. The alignment of the internal control system with financial principles demonstrates sound practices. The treasurer's crucial role in ensuring the accuracy of financial records and the implementation of online financial transactions highlights the boarding school's innovative approach. Overall, the Modern Entrepreneurial Boarding School Darul Musthofa serves as a best practice example in financial management.

Effect of internal control systems, implementation of good governance and employee competence on financial management performance

Effect of internal control systems, implementation of good governance and employee competence on financial management performance

Effect of Internal Control System on Financial Performance of Transport Companies in Rwanda. A Case of Rwanda Interlink Transport Company Limited

Effect of Internal Control System on Financial Performance of Transport Companies in Rwanda. A Case of Rwanda Interlink Transport Company Limited

The Effect of Internal Control System Towards Sustainable Quality Governance in A State University: Basis for Establishing a Sustainable Quality Governance in State University

The Effect of Internal Control System Towards Sustainable Quality Governance in A State University: Basis for Establishing a Sustainable Quality Governance in State University

Pengaruh Tata Kelola Perusahaan, Komite Audit, Dan Kualitas Audit Terhadap Kinerja Perusahaan

Corporate governance, audit committee, and audit quality are important factors that can influence company performance. Good corporate governance can create an effective internal control system, increase transparency and maintain company accountability. The audit committee, as part of corporate governance, plays a role in overseeing the financial reporting process, evaluating the internal control system, and monitoring external audit performance. High audit quality can increase stakeholder confidence in the company's financial reports and provide guarantees for the accuracy and reliability of financial information. This research aims to analyze the influence of corporate governance, audit committee, and audit quality on company performance. Corporate governance variables are measured using corporate governance scores, while audit committee variables are evaluated based on the characteristics and effectiveness of the audit committee. Audit quality is assessed by the reputation and experience of the external auditor. Meanwhile, company performance is measured using financial ratios such as return on assets (ROA) and return on equity (ROE). This research uses data from companies listed on the Indonesia Stock Exchange (BEI) during a certain period. Data analysis was carried out using the multiple linear regression method to test the influence of independent variables on the dependent variable. It is hoped that the findings of this research will contribute to the development of corporate governance practices, audit committee management, and improvement of audit quality in Indonesia, as well as provide insight for companies in efforts to improve their financial and operational performance.

Effect of Internal Control Systems on Financial Reporting Lag among Listed Companies in the Nairobi Securities Exchange.

The timeliness of audited financial reporting has been a concern for various stakeholders, including shareholders, managers, and regulators, as well as internal and external auditors. In the Kenyan perspective timeliness of audited financial statements is prescribed by the Company Act, 2015 as six months or approximately one hundred and eighty days. The general objective of the study was to evaluate the effect of internal control systems on financial reporting lag among listed companies in the Nairobi Securities Exchange. The specific objectives were; to investigate the effect of corrective controls, preventive controls, detective controls and finally monitoring controls on the on financial reporting lag among listed companies in the Nairobi Securities Exchange. The study was anchored on the following theories; agency theory, stewardship theory, attribution theory and systems theory. The method of study adopted in this study was descriptive research design. The target population of this study l comprised companies listed at NSE. Specifically, the units of analysis will be the four departments of finance, human resources, companies listed at NSE. This study used Purposive stratified sampling method to get the sample size which will sample a suitable number of respondents from the different strata from the NSE companies which operate though board of management. The study used both primary and secondary data to gather information needed to respond to the research objectives. The Panel Data Analysis model was used to determine the significance of each independent variable in affecting the financial performance of companies. Qualitative data as analyzed using content analysis, through developing a thematic framework from the key issues, concepts and themes emanating from the open-ended questions. The study adopted several diagnostic tests that included multicollinearity test, test for fixed or random effects and multicollinearity test. Regarding corrective controls, the study established that corrective controls had a significant and negative effect on the financial reporting lag among listed companies in the Nairobi Securities Exchange. The study also established that preventive controls had a significant and negative effect on the financial reporting lag among listed companies in the Nairobi Securities Exchange. The study further established that detective controls had significant and a negative e effect on the financial reporting lag among listed companies in the Nairobi Securities Exchange. The value of the coefficient is also negative. The study finally established that monitoring controls on had significant and a negative effect on the financial reporting lag among listed companies in the Nairobi Securities Exchange. The value of the coefficient is also negative.

Evaluation of the Effectiveness of Internal Control Systems in Reducing Accounting Fraud in Financial Sector Companies

This research aims to evaluate the effectiveness of internal control systems (ICS) in reducing accounting fraud in the financial sector companies. The literature review method is used to analyze various sources of information related to the research topic. Findings indicate that ICS plays a crucial role in safeguarding the integrity and reliability of financial information of companies. Factors such as management commitment, organizational culture, implementation consistency, and external factors influence the effectiveness of ICS. We recommend companies to enhance management commitment to ICS, strengthen a culture that prioritizes integrity, maintain consistency in ICS implementation, and take proactive steps in addressing challenges and leveraging opportunities.

Analisis Penerapan Sistem Informasi Akuntansi Dalam Menunjang Efektivitas Pengendalian Internal Pemberian Kredit Pada Bank Pembangunan Daerah Jawa Barat Dan Banten, Tbk KCP Jampang Kulon

This study aims to find out 1) know the application of accounting information systems, 2) know the application of accounting information systems for lending 3) know the application of effective internal control systems at PT. Regional Development Bank of West Java and Banten, Tbk KCP Jampang Kulon. The type of research used is a descriptive qualitative method, where this research data is obtained from direct observation and interviews with Bank BJB and obtained from documents related to this study. The results of this study show that the accounting information system at Bank BJB KCP Jampang Kulon has been implemented and most of them are good enough according to the provisions at Bank BJB and have fulfilled the elements of the accounting information system components. However, there are weaknesses in the system used, namely there are still problems that occur such as errors and also the sharing of accounts with other users so that it can result in errors in transactions and the blame party is the owner of the account. As for the accounting information system for lending, it has also been implemented in accordance with the lending procedure at Bank BJB KCP Jampang. In addition, the internal control system of Bank BJB KCP Jampang Kulon has also been implemented and most of them are effective and have fulfilled the internal control components according to COSO. In practice, the components that are run are effective, but the LMS system used is still not effective because there are still errors and there are still sharing SLIK accounts with other KCPs so that it can hamper the SLIK submission process.

The Effect of Internal Control System, Information Asymmetry, and Suitability of Compensation on the Tendency of Accounting Fraud (Fraud) in Denpasar City (Opd)

This research aims to determine the influence of internal control systems, information asymmetry, and suitability of compensation on the tendency of accounting fraud in regional organizations in Denpasar City. The population used in this research was 21 Regional Apparatus Organizations in Denpasar City using a saturated sampling technique. The respondents used in this research were 42 respondents. This research uses several data analysis techniques. The data analysis techniques used in this research are the Instrument Test, Classical Assumption Test, Multiple Linear Regression Analysis, Coefficient of Determination Analysis (Adjusted R Square), F Test, and t-test. Based on the results of the analysis that has been carried out, it can be seen that the results of this research are that the Internal Control System has a significant negative effect, Information Asymmetry has a significant positive effect, and Compensation Suitability has a significant negative effect. Its Influence on Accounting Fraud Tendencies in Denpasar City Regional Organizations.