Effective Internal Control System Research Articles

Enhancing Financial Statement Quality: The Moderating Role Of Coercive Pressure In Government Entities

Purpose: This study aims to examine the effect of human resource competence, accounting information system quality, and internal control systems on the financial statement quality of central government accounting entities, with coercive pressure as a moderating variable. Methodology/approach: Primary data was collected from 118 central government work units through questionnaire distribution. The data was analyzed using the Partial Least Square (PLS) statistical technique to examine the relationships between variables. Findings: Human resource competence, accounting information system quality, and internal control systems are proven to be factors that can affect financial statement quality. Coercive pressure can strengthen the effect of accounting information system quality on financial statement quality, but it cannot strengthen or weaken the effect of human resource competence and internal control systems. Practical implications: Enhancing the competence of financial statement preparers, utilizing accounting information systems, and implementing effective internal control systems should be encouraged to improve the quality of central government financial statements. Coercive pressure must be responded to properly by utilizing the advantages of accounting information systems. Originality/value: The examination of coercive pressure in moderating the factors affecting the financial statement quality is the novelty of this study.

Arranging internal financial control in public institutions: Obstacles and strategies to mitigate them

Subject. This article discusses the issues of arranging effective internal financial control in government institutions of the Russian Federation. Objectives. The article aims to identify the key problems of arranging internal control in government institutions and develop recommendations for its improvement. Methods. For the study, I used the methods of comprehensive and statistical analyses, and comparison. Results. The article finds that preliminary control has significant advantages in preventing budget violations. An analysis of the performance indicators of institutions demonstrates the availability of reserves for improving the quality of internal control. Conclusions. Based on the results of a comprehensive study, the article concludes that it is necessary to solve a number of problems in the field of personnel, technological and methodological support for arranging an effective system of internal financial control in public institutions. The implementation of the proposed measures will contribute to improving the effectiveness of the use of budget funds.

Management risk appetite, internal control and corporate financialization

This paper examines the impact of management risk appetite on corporate financialization among non-financial firms listed on the Chinese A-share market over the period 2009–2021. The empirical analysis shows that there is a significant positive relationship between management risk appetite and corporate financialization. In addition, the moderation effect results highlight that firms' internal controls play a negative moderating role between management risk appetite and financialization. These findings have far-reaching implications for regulators, standard setters and corporate governance bodies, as they highlight the need for effective internal control systems to ensure financial stability.

The influence of human resource competency, utilization of information technology, and understanding of financial accounting standards on the quality of financial reports with an internal control system as an intervening variable at the GMAHK Head Office of the Eastern Indonesian Conference Union

This study aims to examine the effect of human resource competency, utilization of information technology, and understanding of financial accounting standards on the quality of financial reports with an internal control system. This study uses primary data with 104 employees of the finance department at the Seventh-day Adventist Church (GMAHK) of the Eastern Indonesian Conference Union as respondents. This study uses path analysis for hypothesis testing. The findings show that human resource competence, understanding of accounting standards, and internal control systems have direct effect on quality of financial reports. In addition, the findings also show that human resource competence and a good understanding of accounting standards directly effect on the internal control system. In an indirect relationship, human resource competence and understanding of accounting standards are able to synergize with an effective internal control system in presenting quality financial reports. The findings of this study also indicate that information technology in GMAHK does not have a significant role in determining the quality of financial reports. The findings suggest that GMAHK needs to develop staff training, especially in mastering new information technology applications to ensure the continued quality of financial reports.

Nonlinear Internal Control System in Business

The purpose of the written study is to study the relationship between the qualifications of the CFO and the nonlinear system of the firm’s internal control system. We used three indicators of the competence of the CFO: financial education, accounting, seniority, and education. Using the model of Kazakhstan companies registered on the stock exchange in 2023. In the methodology of the internal control system, in which stimuli cause a reverse response, the internal control system should be recognized as a nonlinear approach that can have a high impact if it has little impact. The results of this study show a negative relationship between the financial, accounting experience of a CFO and work experience under a nonlinear system of internal control, which indicates that firms with high-quality CFO are facing a nonlinear internal control system in business. A business management team with a large number of employees is associated with an effective internal control system. In addition, the political preferences of senior management directly and indirectly affect the quality of financial statements through the internal control system. Several reliability tests confirm our main results. The results show that a capable CFO can effectively implement a suitable subsystem. The results of the study of a nonlinear system of internal control in business, in terms of improving individual elements of internal control in companies, can be used by members of audit firms.

Pengaruh Sistem Pengendalian Internal, Moralitas Manajemen, Tingkat Kepuasan Kerja Terhadap Fraud

Fraud has become a challenge in various sectors and has become the center of attention in Indonesia, Every act of fraud has its own motive behind it, and various ways are used by many parties to reduce fraud. This study was conducted to determine the effect of Internal Control Systems, Morality Management, Job Satisfaction on Fraud. The population in this study were Civil Servants at the Ministry of Environment and Forestry. This study used primary data, which is a collection of data from the answers of 100 respondents. The result of the study stated that the Internal Control System, Management Morality and Job Satisfaction had a positive effect against Fraud.

Internal Control and Performance of Commercial Banks in Kampala, Uganda: A Case Study of UBA Bank, Kansanga-Kampala, Uganda

This study explores the relationship between internal control mechanisms and the performance of commercial banks, focusing on UBA Bank located in Kansanga-Kampala, Uganda. The effectiveness of internal control systems is crucial for ensuring the stability and success of financial institutions, particularly in emerging economies like Uganda. By employing a case study methodology, data was collected through interviews, questionnaires, and document analysis to investigate the internal control practices implemented by UBA Bank and their impact on its performance indicators. The findings reveal a significant correlation between the strength of internal control measures and the financial performance of UBA Bank in Kampala. Through rigorous internal auditing, risk management, and compliance procedures, the bank has managed to mitigate operational risks, enhance transparency, and improve overall performance metrics such as profitability, asset quality, and operational efficiency. Moreover, the study identifies specific challenges and opportunities faced by UBA Bank in implementing effective internal control mechanisms within the unique context of the Ugandan banking sector. The study contributes to the existing literature by providing empirical insights into the role of internal control in shaping the performance of commercial banks in Uganda, particularly within the dynamic environment of Kampala. The findings underscore the importance of continuous evaluation and enhancement of internal control systems to adapt to evolving regulatory frameworks and emerging risks. Additionally, the study offers practical recommendations for UBA Bank and other commercial banks in Kampala to strengthen their internal control mechanisms and optimize performance outcomes in the competitive banking landscape of Uganda. Keywords: Commercial banks, UBA Bank, Kansanga-Kampala, SMEs

Efektivitas Pengendalian Internal Dalam Mencegah Fraud Guna Mendukung Terwujudnya GCG Pada Perumda Air Minum Mual Nauli Tapteng

The internal control system at Perumda Mual Tapteng Regency is implemented to find out whether the management system has been implemented well or not and to avoid cost leaks. What this research aims to achieve is to analyze the effectiveness of implementing an internal control system as an effort to control or even prevent incidents of fraud. Qualitative methods were applied in this research using data collection techniques carried out through observation and interviews (in depth interviews). The results of this research indicate that Perumda Mual Nauli, Central Tapanuli Regency has succeeded in implementing an effective internal control system.

Apparatus Competence, Internal Control System, Information Technology Utilization and Accountability of Village Fund Allocation Management

Purpose: This research aims to determine and analyze the influence of apparatus competency, internal control systems, and information technology on village government accountability in managing village fund allocations. Research Design and Methodology: The data analysis method that will be carried out consists of descriptive statistical analysis, validity test, reliability test, classical assumption test, and hypothesis testing through multiple linear regression analysis, t test and f test. Findings and Discussion: The research results show that apparatus competency has a negative and insignificant effect on village government accountability in managing village fund allocation. Meanwhile, the internal control system and information technology positively and significantly affect village government accountability in managing village fund allocations. Implications: The practical implication of the results of this research is the need for serious attention to increasing competence, implementing an effective internal control system, and optimizing the use of information technology in managing village funds.

The Influence Of Competence, Independence, Obedience Pressure, And Internal Control System On The Quality Of Internal Auditor Examination Results

This study aims to test and find empirical evidence of the effect of Competence, Independence, Obedience Pressure, and Internal Control Systems on the quality of internal auditor examination results. The population in this study were all civil servants (PNS) in the Inspectorate of Bengkulu Province, totaling 130 people. Sampling in this study uses non-probability sampling through purposive sampling, where all examiners who occupy the Auditor Functional Position (JFA) and P2UPD Functional Position at the Inspectorate of Bengkulu Province are used as a sample of 96 people. The data analysis model used in this research is multiple linear regression analysis using IBM SPSS version 25 software. The findings reveal that competence, independence, and the internal control system positively influence examination quality, while obedience pressure has a negative impact. The implication of this research is that it provides an opportunity for the inspectorate of the province of Bengkulu to pay more attention to factors that can improve the quality of examination results such as increasing auditor competence, strengthening auditor independence, how to overcome obedience pressure and strengthen and ensure an effective internal control system.

РАЗВИТИЕ КРИТЕРИЕВ ОЦЕНКИ ЭФФЕКТИВНОСТИ СИСТЕМ ВНУТРЕННЕГО КОНТРОЛЯ В СОВРЕМЕННЫХ УСЛОВИЯХ

The relevance of the study is due to the need to improve the effectiveness of internal control systems in a rapidly changing external environment and increasing requirements for transparency and reliability of the organization’s activities. The authors of the article emphasize the importance of the problems of determining the criteria for the effectiveness of internal control, which have become the object of research by many domestic and foreign scientists, due to the need to improve this tool for managing economic activity. The article examines the approaches of various authors to the definition of criteria for evaluating the effectiveness of internal control systems. Based on the analysis, interpretations of the content of the most frequently used criteria for evaluating the effectiveness of the internal control system (effectiveness, efficiency, cost-effectiveness, expediency, timeliness) are formulated. The author conducts a study of criteria defined by leading international professional organizations (COSO, the Basel Committee on Banking Supervision, the Institute of Internal Auditors, the Association of Audit and Control of Information Systems). According to the author, the criteria for the effectiveness of the internal control system should not only reflect the current state of the internal control system, but also serve as a basis for its further development and improvement. As a result of the study, a systematization of the criteria for the effectiveness of the internal control system was proposed, which includes five groups involving an assessment of the level of organization of the internal control system; the level of human resources involved in the internal control system; the level of information, technical, technological and financial support for the internal control system; the state of the environment of the internal control system; the level of quality of internal control measures control within the framework of the internal control system. The proposed systematization of the criteria for the effectiveness of the internal control system allows for a deeper understanding of the essence and content of internal control and can become an effective management tool and contribute to the achievement of the tasks set. The systematization proposed by the author of the study can serve as a basis for the development and improvement of internal control systems in organizations. The results of the study can be useful for managers and specialists in the field of risk management, audit and control, as well as for anyone interested in improving the efficiency of organizations.

ОРГАНІЗАЦІЙНО-МЕТОДИЧНІ АСПЕКТИ ПОБУДОВИ СИСТЕМИ ВНУТРІШНЬОГО КОНТРОЛЮ ПІДПРИЄМСТВ СТРАХОВОЇ ДІЯЛЬНОСТІ

The article examines the importance of internal control in the insurance sector and its impact on financial stability and customer confidence. Various approaches to the organization of internal control are considered, such as internal audit, control services and outsourcing. The effectiveness of these approaches and their influence on the financial indicators of insurance companies were studied. The results of the analysis confirm that the implementation of an effective internal control system contributes to ensuring financial stability and customer trust, which is critically important for the successful operation of insurance companies. The development and implementation of an effective system of internal control in insurance companies are key aspects of ensuring their stability and reliability in a constantly changing business environment. This system allows not only to minimize the risks of financial losses through effective management of resources and assets, but also ensures compliance with legal requirements and standards. Various methods were used in the research process, such as logical analysis for the evaluation of scientific works, an analytical approach for analyzing the costs and effectiveness of system implementation, as well as a graphic representation of the process of building a controlling system. Therefore, this article highlights the importance of internal control for insurance companies and provides recommendations for optimizing this process. The implementation of an effective internal control system can become a decisive factor for ensuring the sustainability and success of insurance companies in the modern competitive environment. This analysis points to the need for further research in this direction, in particular, the development of new methods of internal control, evaluation of their effectiveness, and the introduction of innovative approaches to the insurance business. Such studies can contribute to the further increase of competitiveness and stability of insurance companies in the conditions of constant changes in the market.

Determinants of Factors that Affect Accounting Fraud in Local Government Financial Management

This study aims to determine the effect of internal control systems, compliance with human resource regulations and competencies on accounting fraud in the regional financial management of the Gianyar Regency in Indonesia. The research method uses quantitative and data analysis techniques, including multiple regression and analysis of a questionnaire answered by the staff of the regional work unit in Gianyar Regency. Sampling in this study uses Non-Probability sampling with a Purposive Sampling technique, while the number of research samples is 144 questionnaires. The results of the study suggest that the internal control system has a negative effect on accounting fraud, regulatory compliance also negatively affects accounting fraud, and human resource competence has a negative effect on accounting fraud in the Regional Work Unit in Gianyar Regency.

A Comprehensive Study on Blockchain Technology and its Prospects to Create an Effective Internal Control System

This paper explores the revolutionary impact of blockchain technology on internal control systems in organizations. In today’s interconnected and rapidly changing corporate landscape, businesses must establish efficient administrative control systems to mitigate risks and meet legal obligations. Blockchain technology, with its decentralized record-keeping and cryptographic security features, addresses many contemporary issues related to transparency, security, and efficiency. This study delves into how blockchain affects internal control frameworks by ensuring immutable transaction trails, improving traceability, and enhancing security, all while automating processes through smart contracts. Additionally, challenges such as scalability, interoperability, and regulatory compliance are discussed. The conclusion emphasizes that while blockchain is not a replacement for internal control systems, it acts as a powerful complement, strengthening overall system efficiency and effectiveness.

Key determinants of internal control system effectiveness in Ho Chi Minh City financial firms

Key determinants of internal control system effectiveness in Ho Chi Minh City financial firms

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.

The Influence of Internal Control Quality on Corporate Financial Performance: An Empirical Analysis based on Panel Quantile Regression Model

This study delves into the relationship between internal control quality and the financial performance of Chinese-listed corporations. Employing a distinctive research approach featuring panel quantile regression, this study meticulously examines data spanning the period from 2011 to 2020, encompassing 953 Chinese-listed entities. The analysis, in comparison to conventional methods such as ordinary least squares (OLS) regression and fixed-effects models, consistently reveals a robust and statistically significant positive correlation between internal control quality and corporate financial performance. Notably, the findings of the panel quantile regression bring to the forefront a nuanced perspective, elucidating an enhancing effect of internal control quality on Return on Assets. Nevertheless, this effect diminishes as one ascends the quantile distribution, elucidating varying degrees of influence contingent upon the internal control quality spectrum. These findings underscore the pivotal role of effective internal control systems in augmenting financial performance, with implications for corporate governance. Furthermore, this research underscores the evolving nature of internal control frameworks, particularly in the context of digitalization, thus delineating an imperative area for prospective scholarly exploration.

A case study of village credit institution: Does Tri Hita Karana moderates the effect of internal control system on the quality of financial statements?

This study aims to determine the effect of the internal control system on the quality of financial statements with Tri Hita Karana Culture as a moderator. The population in this study were all Village Credit Institutions in Tabanan District, Indonesia. Sampling using purposive sampling method. The number of samples in this study were 71 respondents consisting of Panureksa, Pamucuk, Penyarikan, and Patengen. Data analysis using is Moderated Regression Analysis (MRA). The findings in this study are that the internal control system affects the quality of financial statements. Tri Hita Karana culture can strengthen the influence of the internal control system on the quality of financial statements. This research has theoretical implications, namely that the more adequate the internal control system carried out will cause the quality of financial reports to increase, especially in Village Credit Institutions that have implemented the Tri Hita Karana Culture as well as practical implications for improving the quality of financial reports and for future researchers.

Pengaruh Kualitas Sumber Daya Manusia,Sistem Pengendalian Internal, dan Partisipasi Anggota terhadap Kinerja Koperasi pada Koperasi Pegawai Negeri Kabupaten Buleleng

This study aims to (1) determine the effect of the quality of human resources on the performance of cooperatives in civil servant cooperatives in Buleleng Regency. (2) Knowing the Effect of Internal Control Systems on Cooperative Performance in Cooperative Civil Servants of Buleleng Regency. (3) Knowing the Effect of Member Participation on Cooperative Performance in Cooperative Civil Servants of Buleleng Regency. The research that will be used in this research is quantitative research. Data collection was carried out by distributing questionnaires and then the data was processed using the SPSS application. The collected data will be tested by descriptive statistical analysis, instrument test, classical assumption test and hypothesis test. The results of this study found that (1) The quality of human resources has a positive and significant effect on the performance of the Buleleng Regency civil servant cooperatives (2) Internal control has a positive and significant effect on the performance of the Buleleng Regency civil servant cooperatives (3) Member participation has a positive and significant effect on the performance of the Buleleng Regency civil servant cooperatives. significantly to the performance of civil servant cooperatives in Buleleng Regency.

Determinants of the quality of financial reports in regional government: A literature review

Government financial reports act as an essential tool for accountability and transparency of financial performance to the public, but their quality is still a big concern in Indonesia. This research aims to dive deeper into these crucial factors and their impact on the quality of financial reports, providing in-depth insights into their relationships and providing guidance for further research in the context of financial management. The method used in this research is a systematic review of related articles from the SINTA database. The results show that implementing an effective internal control system is critical in minimizing errors in financial reports and increasing their credibility. Human Resource Competency, especially related to government accounting principles, is also a determining factor in ensuring the integrity and reliability of financial information. A high level of commitment from employees and management is essential to provide better accounting information. In addition, using information technology through government websites is crucial in strengthening the management process of regional government financial reports.