Internal Control Policies Research Articles

Efektivitas Pengendalian Internal dalam Mencegah Pembiayaan Macet pada BMT Al-Hijrah Bukittinggi

This research aims to examine the process of internal control policies in preventing bad financing at BMT Al-Hijrah Bukittinggi and to analyze the effectiveness of internal control in preventing bad financing at BMT Al-Hijrah Bukittinggi. The type of research used is qualitative research. The analysis techniques used are interview techniques, observation techniques, and documentation techniques. Bad financing is caused by payments that are not on time or not paying arrears that have been previously agreed. There are two causal factors, namely internal and external factors. The internal factor is the lack of supervision and checking carried out by BMT Al-Hijrah Bukittingi and forgetting to check receivables. Meanwhile, external factors are caused by customers and also not paying attention to the 5C principles when analyzing financing for prospective customers, resulting in bad financing.

ICSH review of internal quality control policy for blood cell counters.

This paper is a report of an ICSH review of policies and practices for internal quality control (IQC) policy for haematology cell counters among regulatory bodies, cell counter manufacturers and diagnostic laboratories. It includes a discussion of the study findings and links to separate ICSH guidance for such policies and practices. The application of internal quality control (IQC) methods is an essential pre-requisite for all clinical laboratory testing including the blood count (Full Blood Count, FBC, or Complete Blood Count, CBC). The ICSH has gathered information regarding the current state of practice through review of published guidance from regulatory bodies, a questionnaire to six major cell counter manufacturers (Abbott Diagnostics, Beckman Coulter, Horiba Medical Diagnostic Instruments & Systems, Mindray Medical International, Siemens Healthcare Diagnostics and Sysmex Corporation) and a survey issued to 191 diagnostic laboratories in four countries (China, Republic of Ireland, Spain and the United Kingdom) on their IQC practice and approach to use of commercial IQC materials. This has revealed diversity both in guidance and in practice around the world. There is diversity in guidance from regulatory organizations in regard to IQC methods each recommends, clinical levels to use and frequency to run commercial controls, and finally recommended sources of commercial controls. The diversity in practice among clinical laboratories spans the areas of IQC methods used, derivation of target values and action limits used with control materials, and frequency of running commercial controls materials. These findings and their implications for IQC Practice are discussed in this paper. They are used to inform a separate guidance document, which proposes a harmonized approach to address the issues faced by diagnostic laboratories.

ICSH guidance for internal quality control policy for blood cell counters.

This paper is a description of the ICSH guidance for internal quality control (IQC) policy for blood cell counters. It follows from and links to a separate ICSH review for such policies and practices. The ICSH has gathered information regarding the current state of practice through review of published guidance from regulatory bodies, a questionnaire to six major cell counter manufacturers and a survey issued to 191 diagnostic laboratories in four countries (China, the Republic of Ireland, Spain, and the United Kingdom) on their IQC practice and approach to the use of commercial IQC materials. This has revealed diversity both in guidance and in practice around the world. There is diversity in guidance from regulatory organizations in regard to IQC methods each recommends, clinical levels to use and frequency to run commercial controls, and finally recommended sources of commercial control materials. The diversity in practice among clinical laboratories spans the areas of IQC methods used, derivation of target values, and action limits used with commercial control materials, and frequency of running commercial controls materials. These findings and their implications for IQC Practice are addressed in this guidance document, which proposes a harmonized approach to address the issues faced by diagnostic laboratories.

ICSH review of internal quality control policy for blood cell counters

ICSH review of internal quality control policy for blood cell counters

내부통제와 미래이익에 대한 주가 정보성

Purpose - This study examines whether internal control has an effect on stock price informativeness about future earnings. High quality internal control provides continuous assurance for the quality of financial reports, and these future earnings-related information is accurately reflected in the current stock price.
 Design/methodology/approach - This study collected 12,862 data from 2006 to 2021 in China to make an empirical analysis using the future earnings response coefficient (FERC) and the multiple regression analysis were hired in order to analyze the data.
 Findings - We find that internal control strengthens the association between current returns and future earnings, indicating that more information about future earnings is reflected in current stock prices. This positive effect exists in both the main board market and the growth enterprise market of China's stock market, especially in the main board market after the implementation of the internal control policy. In addition, we find that the positive effect is weaker for firms that report internal control deficiencies or receives non unqualified internal control audit opinions. The results using earnings persistence yield similar findings, further supporting the results based on the FERC model.
 Research Implications or Originality - Our tests provide strong evidence that the quality of internal control affects FERC in China stock market.

Analysis of Hexagon Fraud Model, the S.C.C.O.R.E Model Influencing Fraudulent Financial Reporting on State-Owned Companies of Indonesia

Abstract This research aims to analyze the influence of each Hexagon Fraud factor that causes fraudulent financial reporting, namely Pressure, Opportunity, Rationalization, Arrogance, Capability and Collusion based on respondents’ perceptions of the content. The research methodology used is a quantitative method, sample determination was carried out using a purposive sampling method with certain criteria. The questionnaire was distributed to 3 leaders and 3 officials based on the selected sample. Primary data was obtained to test 6 research hypotheses based on the answers of 96 respondents from 16 State-Owned Enterprises (SOEs) from the selected sample. Data processing uses Smart PLS version 3.00 to test validity and reliability and test research hypotheses. The results of research on hexagon fraud theory show that Opportunity, Arrogance and Capability have a positive and significant effect on Fraudulent Financial Reporting, while Pressure, Rationalization and Collusion do not have a significant effect on Fraudulent Financial Reporting. Research findings reveal that fraud perpetrators are parties who have a deep understanding of the company’s internal control policies, especially knowledge about the effectiveness or ineffectiveness of internal controls, both from within and from outside SOEs. Fraud perpetrators may come from leaders or officials who are knowledgeable about the organizational structure and governance of officials in strategic positions.

Research on the Transformation of Enterprise Management from Financial Accounting to Management under the Digital EnvironmentTake HUAWEI as an Example

With the continuous development of technology, the updating and iteration of scientific and technological achievements are accelerating. Under the background of the increasing popularization of information technology and network technology, the era of big data is gradually coming. In recent years, Chinese private enterprises led by Huawei have developed rapidly and gained popularity in the world. Meanwhile, Huawei is also an important technology-oriented and research-oriented enterprise in China. With continuous innovation, Huawei has made outstanding contributions to China's chip technology development and 5G development. Huawei is committed to bringing the digital world into all fields, building a smart world where everything is connected, and making all industries and organizations agile, efficient and vibrant thanks to a powerful digital platform. The success of the external market cannot be separated from the effective and orderly internal control management of the enterprise. This paper analyzes the strengths and weaknesses of Huawei's internal control management by comparing the internal control policies and practices of other types of enterprises, and puts forward relevant suggestions. This paper uses the literature research method to conduct the study. Finally, this paper finds that Huawei's transition from financial accounting to management accounting is at the forefront of the industry in terms of ideas, technology and actions, which is worth learning from many other enterprises.

Effect of Month End Close Practices on the Financial Performance of International Non-Governmental Organizations in Rwanda (2020-2021)

Purpose: Month-End Close Practices are tasks performed by finance department every month (or accounting period) prior to and following the closedown of the relevant books of accounts. It is good practice to closedown financial systems for each accounting period to allow the institution to compile its management accounts (e.g. showing the actual expenditure versus budget) to assess its financial position. Therefore, month-end procedures involves running reports to check transactions and balances, as well as preparing management accounts to assess the financial position of the organization. This study focused on the evaluation on Month-End Close Practices on the Financial Performance of International Non-Governmental Organizations in Rwanda. It aimed to finding out whether the Month-End Close Practices were effective and whether they really have effect on Financial Performance of International Non-Governmental Organizations in Rwanda especially in the selected NGOs over the period of 2020-2021. Methodology: The design of this study was a quantitative and qualitative descriptive in nature. The study enrolled 20 respondents senior finance staff from the selected NGOs. Quantitative data were collected using data collection sheet while qualitative data were collected using interviews, focus groups and observation. Quantitative data were analyzed using statistical package for social sciences (SPSS) version 20 and qualitative data were to look for emerging themes then further distilled to identify any abstract themes that could be understood holistically. Findings: The study findings revealed that Month-End Close Practices have a significant effect on the Performance of International Non-Governmental Organizations. The study found a strong positive correlation between moth end practices and financial performance. Recommendation: International Non-government organizations (NGOs) should maintain internal control system and policies related to the month-end close practices as it showed the high standard of compliance and financial performance.

Does Enterprise Internal Control Improve Environmental Performance—Empirical Evidence from China

Enterprises are key actors in green governance. Many studies have analyzed the factors that affect corporate environmental performance, but the impact of internal control on environmental performance has not been investigated yet. China’s innovative internal control policies make this issue more meaningful for research. Unlike the general practices of developed market economy countries or regions which require enterprises to evaluate and disclose the effectiveness of internal control over financial reporting, China’s policy focuses on multi-objective internal control. Using the instrumental variables regression method, this paper employs a moderated mediation model to study the relationship between internal control and environmental performance. This paper takes listed companies on the Shanghai and Shenzhen Stock Exchanges from 2013 to 2021 as the sample. Empirical results show that high-quality internal control is conducive to enhancing environmental performance, while the level of enterprise digitalization plays a mediating role in the relationship between the two, and ownership type moderates the effects of internal control on environmental performance. The conclusion indicates that China’s internal control policy is of great significance for the green development of enterprises. Our study contributes to the literature on both the factors affecting environmental performance and the economic consequences of internal control. The study findings can be beneficial for managers in corporations, internal control policymakers and environmental regulators.

Influence of Internal Control Systems on Governance among Parastatals in Taiwan

The study sought to examine the influence of internal control systems on governance among parastatals in Taiwan. The research used the descriptive research design. The target population were 15 parastatals in Songshan District, Taiwan. The study picked 20 respondents from each of the parastatals yielding to sample size of 300. Questionnaires were used to collect data and reliability and validity of the research instruments were conducted. SPSS was used to do the analysis of the data. The findings of the study indicated that internal control systems have a positive effect on governance among parastatals in Taiwan. Internal control systems also contribute to the efficient and effective use of resources in parastatals. By implementing controls for financial management, budgeting, and resource allocation, these systems promote prudent and responsible use of resources. Effective resource utilization allows parastatals to optimize their performance, deliver public services more efficiently, and achieve their objectives effectively. Furthermore, internal control systems enhance risk management within parastatals. To enhance the influence of internal control systems on governance among parastatals in Taiwan, several recommendations can be made. Firstly, it is crucial to establish comprehensive internal control policies and procedures tailored specifically to the needs of parastatals, outlining control objectives and responsibilities. Secondly, regular training programs should be implemented to enhance the knowledge and skills of employees involved in governance and internal controls. Continuous monitoring and evaluation of internal control systems are important, along with reporting and addressing control deficiencies. Collaboration and information sharing among parastatals can promote best practices, while fostering a culture of ethics and integrity through a code of conduct is essential. These recommendations aim to strengthen governance practices, ensure consistency, and promote transparency and accountability within parastatals. Keywords: Internal Control Systems, Governance, Parastatals, Taiwan

Internal Control System and Financial Statement Fraud of Quoted Banks in Nigeria

The menace of financial statement fraud which has sent notable and reputable corporate entities to their unimaginable early grave soon after the publication of juicy profits has continuing posing catastrophic threats and bleeding the global economy into a state of comma. This dreaded phenomenon around the globe may be demystified through effective internal control system to provide managers with the means to increase accountability for their programs and to obtain reasonable assurance that the programs they direct meet established goals and objectives. Intuitively, an effective system is not only restricted to a digital one but to one that is able to deter, prevent and detect fraudulent activities frontally. The main aim of this study is to develop an internal control system that will help in reducing financial statement fraud of quoted banks in Nigeria through not only its deterrent, predictive and detective properties; but also, the recommended internal control procedures and policies which the accounting profession should adopt. Deterrent control mechanism, and preventive control mechanism were the proxies of internal control system while improper revenue recognition, overstatement of assets were the sub-constructs of the financial statements fraud. The researchers adopted correlational survey design for the study and used primary data via structured questionnaire. The null hypotheses test and other data were analyzed by Pearson Product Moment Correlation and simple linear regression tools with the aid of Statistical Packages for the Social Sciences version 25. The study found that all the internal control system proxies; deterrent control mechanism, and preventive control mechanism positively and significantly related to improper revenue recognition and overstatement of assets of quoted banks in Nigeria in the period of this study. The study concludes that internal control system effectively and significantly related with the financial statement fraud. Based on the empirical findings, the study recommends the need for banks as a matter of necessity to continue to reinvigorate and maintain the tone at the top culture with effective risk management, energizes segregation of duties and job rotation with mandatory annual leave policies for the purposes of rooting out financial statement fraud in Nigeria banks.

Global transmission of COVID-19 — A gravity model approach

This paper aims to describe the spatiotemporal transmission of COVID-19 and examine how various factors influence the global spread of COVID-19 using a modified gravity model. Log-linearizing the model, we run a negative binomial regression with observational data from 22 January 2020 to 31 December 2020. In the first model, population size and GDP per capita are positively related to the sum of newly confirmed COVID-19 cases within a 10-day window; the values for both variables are statistically significant throughout the study period. However, the significance of geographic distance varies. When a single geographic source exits in the early stage, the value is statistically significant. In the intermediate stage, when disease transmission is explosive between countries, the distance loses its statistical significance due to the emergence of multiple geographic transmission sources. In the containment stage, when the spread of disease is more likely to occur within a country, distance becomes statistically significant. According to the second model, the government’s internal movement control and nonpharmaceutical intervention policy, percentage of the population over 70 years old, and population-weighted density are statistically significant and are positively related to the incidence of COVID-19. By contrast, average monthly temperature, international travel restriction policies, and political regimes are statistically significant and negatively associated with the dependent variable.

KEBIJAKAN PENGAWASAN PEMERINTAH TERHADAP AKUNTABILITAS PENGELOLAAN KEUANGAN NEGARA DALAM PENANGANAN PANDEMI COVID-19

This study aims to find out how the government's control policy is on accountability of state financial management in handling the Covid-19 pandemic. This writing uses a normative or doctrinal legal method, using a statutory and conceptual approach that is perspective. The data collection technique was carried out by literature study techniques and the data analysis technique used was the deductive method. Based on the results of the study, it was found that the impact of the Covid-19 pandemic on the economic sector triggered a spike in the poverty rate. The government provides a number of aids to increase people's purchasing power. The allocation of funds for handling Covid-19 is a sector prone to corruption. Therefore, it is necessary to have an internal control policy of the Government in preventing corrupt practices by irresponsible parties for the realization of a professional, reliable and competent state administration. One of the policies issued is the Instruction of the Minister of Home Affairs Number 1 of 2020 at the sixth diktu. In the instruction, the Government Internal Supervisory Apparatus (APIP) is mandated to carry out guidance and supervision of the implementation of Domestic Instructions by identifying risk points in the process of handling the Covid-19 pandemic disaster and ensuring the effectiveness of existing controls, carrying out monitoring activities related to compliance and effectiveness, improve governance, risk, control, and use of technology to support the implementation of effective internal control.

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.

The Role of Internal Audit in Internal Controls of a Public University in Ghana

Internal control is an important audit function used to examine the effectiveness and efficiency of control systems designed to ensure an orderly working environment. Currently, many academic institutions are facing several financial challenges and therefore internal controls are necessary, more than before, to help streamline operations and ensure proper use of resources. This paper presents a study conducted in the University of Mines and Technology (UMaT) to access the role of the Internal Audit in internal control. Questionnaire administration, interviews and policy documents and procedures were the main tools utilized in the study. It was found that policies and procedures such as Statutes, Financial Administration Act 2003 (Act 654), Financial and Stores Regulations, and Public Procurement Act 2003 (Act 663) exist in the University as regulatory frameworks to permit and maintain accountability for assets and to ensure that decisions are made with appropriate approvals. Documentation was a key control measure and supporting documents include Goods Receipt Voucher, Pro-forma invoice, Local Purchase Order, Pay-in Slips, Receipts, honour certificate and covering letters. Over 90% respondents agreed that transactions in the institution are supported by documents, accuracy of figures is ascertained, and policies and procedures are complied with. Above 80% also indicated that the Internal Audit Unit draws attention to internal controls, recommendations made by Audit Unit are accepted and implemented, payment vouchers are pre-audited, duties are segregated and revenues collected are checked. Thus, UMaT has put in place proper internal control measures which ensure an efficient, economic and effective use of its resources. It is recommended that control policies and manuals on policies and procedures be communicated to all the staff of the University as 70% of respondents indicated that these internal control policies are not communicated to all the staff.

ANALYSIS OF REGULATORY LAW REGARDING GOVERNANCE AND INTERNAL CONTROL SYSTEMS IN PUBLIC SERVICE AGENCY IN RELATION TO THE IMPLEMENTATION OF A FRAUD CONTROL SYSTEM

This study aims to analyze governance policies and internal control systems in Public Service Agency (hereinafter referred to in Indonesia as BadanLayananUmum / BLU) by looking at aspects of fraud control systems. The flexibility and authority granted to the BLU has given flexibility in financial management and service performance. However, the potential for fraud is very likely to occur in the operation of the BLU business. Therefore, the question in this study is whether the BLU governance policies have considered aspects of the fraud control system. After conducting research on governance policies and internal control systems, it was found that there were internal control pillars that had not been regulated in the BLU's governance and internal control policies.

Internal control: strengthening policy enging in non-profit organizations

The purpose of this research is to determine the strengthening that non-profit organizations obtain through the application of internal control policies, that is to say the internal control of the institutions will be analyzed, because it is an indispensable tool for the development of administrative management, financial and accounting, allowing reasonable security for the fulfillment of institutional goals. A research study was carried out using the descriptive methodology, so the reading of scientific articles and the bibliographic review was carried out, obtaining information on the strengthening and importance of internal control policies in non-profit organizations. On the basis of the research carried out, it was found that many of the organizations do not have a specific control policy, and this would result in inefficiency and inefficiency in the operations they carry out causing them weaknesses. With a good internal control system, it helps them to develop guidelines and compliance standards so that procedures and activities are carried out efficiently and effectively, allowing no errors and fraud to be reported.

Fuzzy Governance Model

This article aims to analyze the functions of corporate governance agents as a key part of the study and evaluation of the internal control by the independent auditor to propose a governance fuzzy model based on legality. This is a descriptive–hermeneutical study based on mercantile-securities law, the code of best practice of corporate governance, and auditing standards. The research design is cross-sectional and uses fuzzy logic theory as an alternative tool in contrast to classical mathematical models. The results suggest that corporate governance agents strongly influence the application of a management system. Evidence is given regarding the positive relationship between the functions of corporate governance agents as a management system. Additionally, the importance of an internal control management system as an inherent mechanism for governance is proven. The scientific value of this work lies in showing how the interaction between the application of mathematical models based on fuzzy set theory and the qualitative attributes of internal control policies and practices. It is a tool to evaluate governance as a management system for decision making. This work emphasizes that a model based on fuzzy sets is useful to evaluate a management system of internal control policies and procedures necessary to improve corporate governance.

Examining the Trainability and Transferability of Working-Memory Gating Policies

Internal working memory (WM) gating control policies have been suggested to constitute a critical component of task-sets that can be learned and transferred to very similar task contexts (Bhandari and Badre (Cognition, 172, 33–43, 2018). Here, we attempt to expand these findings, examining whether such control policies can be also trained and transferred to other untrained cognitive control tasks, namely to task switching and AX-CPT. To this end, a context-processing WM task was used for training, allowing to manipulate either input (i.e., top-down selective entry of information into WM) or output (i.e., bottom-up selective retrieval of WM) gating control policies by employing either a context-first (CF) or context-last (CL) task structure, respectively. In this task, two contextual cues were each associated with two different stimuli. In CF condition, each trial began with a contextual cue, determining which of the two subsequent stimuli is target relevant. In contrast, in the CL condition the contextual cue appeared last, preceded by a target and non-target stimulus successively. Participants completed a task switching baseline assessment, followed by one practice and six training blocks with the WM context-processing training task. After completing training, task-switching and AX-CPT transfer blocks were administrated, respectively. As hypothesized, compared to CL training condition, CF training led to improved task-switching performance. However, contrary to our predictions, training type did not influence AX-CPT performance. Taken together, the current results provide further evidence that internal control policies are (1) inherent element of task-sets, also in task switching and (2) independent of S-R mappings. However, these results need to be cautiously interpreted due to baseline differences in task-switching performance between the conditions (overall slower RTs in the CF condition). Importantly though, our results open a new venue for the realm of cognitive enhancement, pointing here for the first time to the potential of control policies training in promoting wider transfer effects.

Do Small and Medium Enterprises Optimally Utilize Computerized Accounting Systems Internal Controls? An Empirical Study

This research aimed to identify the computerized accounting systems employed by Nigerian SMEs, examine the extent to which Nigerian SMEs utilize the built-in internal control features in their computerized accounting systems, as well as explore the perceived reasons for the underutilization of any of the computerized accounting systems internal control features. The researcher employed the survey methodology in the conduct of the study, and data was collected using questionnaire administered to the an accounting officer in each of the 370 firms randomly selected from the population of SMEs in the south-south region of Nigeria. The research data was analyzed using frequencies, mean, standard deviation, and the one-sample T-test statistics. The results of the study indicate that Nigerian SMEs employ various accounting software in the performance of their accounting function, with QuickBooks, Peachtree (Sage 50), and MS-Navision being the most used. The study also indicate that Nigerian SMEs optimally utilize the built-in internal control features in their computerized accounting systems. The reasons for the underutilization of a few of the internal control features by firms are indicated in the study to include lack of awareness of the availability of the internal control features in their accounting systems, limited number of accounting staff, and lack of formal internal control policies. This study extends the body of knowledge in accounting, and its results would be useful to those in the academia, management and accounting personnel of SMEs, and other practitioners. Areas for further research have been suggested to confirm and extend the outcome of this study. Keywords: Accounting information systems, Computerized accounting systems, Access controls, Accounting software, Accuracy checks, Audit trail, Internal controls, Segregation of duties, Security controls, Small and medium enterprises DOI: 10.7176/RJFA/11-17-03 Publication date: October 31 st 2020