Evaluation of the Effectiveness of Internal Control Systems in Reducing Accounting Fraud in Financial Sector Companies
Article Sidebar
Main Article Content
Abstract
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.
Article Details
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
References
S. Mulyani, E. Kasim, W. Yadiati, and H. Umar, “Influence of accounting information systems and internal audit on fraudulent financial reporting,” Opción Rev. Ciencias Humanas y Soc., no. 21, pp. 323–338, 2019.
F. K. Adeyemi and O. M. Olarewaju, “Internal Control System and Financial Accountability: An Investigation of Nigerian South-Western Public Sector.,” Acta Univ. Danubius Oeconomica, vol. 15, no. 1, 2019.
E. Wahyuanto, “Pembaruan Regulasi Pos Dalam Upaya Modernisasi dan Optimalisasi Layanan Pos Indonesia,” Syntax Lit. J. Ilm. Indones., vol. 7, no. 2, pp. 2391–2397, 2022.
B. R. M. Handoyo and B. I. Bayunitri, “The influence of internal audit and internal control toward fraud prevention,” Int. J. Financ. Accounting, Manag., vol. 3, no. 1, pp. 45–64, 2021.
E. Wahyuanto and K. G. Marwan, “The Impact of Digital Leadership, Compensation and Work Motivation on Educator Performance at Sekolah Tinggi Multimedia" MMTC" Yogyakarta,” Remit. Rev., vol. 8, no. 4, 2023.
A. J. Al-Waeli, R. N. Hanoon, H. A. Ageeb, and H. Z. Idan, “Impact of accounting information system on financial performance with the moderating role of internal control in Iraqi industrial companies: An analytical study,” Jour Adv Res. Dyn. Control Syst., vol. 12, no. 8, pp. 246–261, 2020.
O. K. Adeleke, I. B. Segun, and A. I. C. Olaoye, “Impact of internal control on fraud prevention in deposit money banks in Nigeria,” Niger. Stud. Econ. Manag. Sci., vol. 2, no. 1, pp. 42–51, 2019.
E. Wahyuanto, “Kinerja Dosen Ditinjau Dari Kepemimpinan, Kompensasi Dan Motivasi Kerja Pada Sekolah Tinggi Multi Media ‘Mmtc’yogyakarta.” Universitas Negeri Jakarta, 2023.
S. O. Ahmed and P. Nganga, “Internal control practices and financial performance of county governments in the coastal region of Kenya,” Int. J. Curr. Asp., vol. 3, no. 5, pp. 28–41, 2019.
A. M. Ahmed and A. A. Muhammed, “Internal control systems & its relationships with the financial performance in telecommunication companies―a case study of Asiacell‖,” Int. J. Sci. Technol. Res., vol. 7, no. 11, pp. 82–88, 2018.
Sugiyono, “Metodelogi Penelitian Kuantitatif, Kualitatif Dan R&D. (Bandung: ALFABETA),” 2013.
S. Ujkani and N. B. Vokshi, “An overview on the development of internal control in public sector entities: evidence from Kosovo,” 2019.
E. A. Abiodun, “Internal control procedures and firm’s performance,” Int. J. Sci. Technol. Res., vol. 9, no. 2, pp. 6407–6415, 2020.
H. Umar and M. U. Dikko, “The effect of internal control on performance of commercial banks in Nigeria,” Int. J. Manag. Res., vol. 8, no. 6, pp. 13–32, 2018.
G. A. Kisanyanya, “Internal control systems and financial performance of public institutions of higher learning in Vihiga county, Kenya.” Doctoral dissertation, Kenyatta University, 2018.
F. Fernandhytia and M. Muslichah, “The effect of internal control, individual morality and ethical value on accounting fraud tendency,” Media Ekon. Dan Manaj., vol. 35, no. 1, pp. 112–127, 2020.
I. H. Napitupulu, “Internal Control, Manager’s Competency, Management Accounting Information Systems and Good Corporate Governance: Evidence from Rural Banks in Indonesia,” Glob. Bus. Rev., vol. 24, no. 3, pp. 563–585, May 2020, doi: 10.1177/0972150920919845.
M. Eton, C. Murezi, F. Mwosi, and P. B. Ogwel, “Internal control systems and financial accountability in Uganda: A case of selected districts in western Uganda,” Int. J. Commer. Manag. Res., vol. 4, no. 4, pp. 106–111, 2018.
E. Wahyuanto, E. Giantoro, J. D. T. Widodo, and R. Yuniar, “The Application of Brainstorming Method in Developing Ideas in The Production of Television Documentary Side of Life Episode Not The Same,” Tech. Educ. Humanit., vol. 7, pp. 54–65, 2024.
M. Yusuf and L. Kanji, “Effect of internal audit and accounting information system on the effectiveness of internal control,” ATESTASI J. Ilm. Akunt., vol. 3, no. 2, pp. 120–125, 2020.
A. G. Koutoupis and T. Malisiovas, “The effects of the internal control system on the risk, profitability, and compliance of the US banking sector: A quantitative approach,” Int. J. Financ. Econ., vol. 28, no. 2, pp. 1638–1652, 2023.
T. T. Ha Le and M. D. Tran, “The effect of internal control on asset misappropriation: The case of Vietnam,” Bus. Econ. Horizons, vol. 14, no. 4, pp. 941–953, 2018.
W. Agbenyo, Y. Jiang, and P. K. Cobblah, “Assessment of government internal control systems on financial reporting quality in Ghana: A case study of Ghana revenue authority,” Int. J. Econ. Financ., vol. 10, no. 11, pp. 40–50, 2018.
E. I. Bakhtigozina, E. Efremova, E. A. Shevereva, A. A. Kurashova, And E. I. Nalbatova, “Fraud in the organization and direction of control in order to prevent it,” Rev. Espac., vol. 39, no. 39, 2018.
K. Kamaliah, N.-S. Marjuni, N. Mohamed, Z. Mohd-Sanusi, and R. Anugerah, “Effectiveness of monitoring mechanisms and mitigation of fraud incidents in the public sector,” Adm. Si Manag. Public, vol. 30, pp. 82–95, 2018.