Internal Control and Audit Program Effectiveness: Empirical Evidence from Jordan

Abstract

This article examines the relationship between some components (i.e. risk assessment, control environment and control activities) of internal control system and the effectiveness of audit program in Jordan. Based on 43 usable questionnaires, the results of the study show that the risk assessment does contribute significantly toward an effective audit program. On the other hand, the results of analysis indicate that control environment and control activities do not contribute significantly toward an effective audit program. These results give an indicator that Jordanian companies lack the necessary experience to deal with the current tools of internal control evaluation. Some applications and recommendations were suggested for both management of companies and external auditors.

The effect of internal control on asset misappropriation: The case of Vietnam

“…Karagiorgos et al (2011) study the relationship between internal control and the effectiveness of internal audit in Greek hotels. Sawalqa & Qtish (2012) study the relationship between internal control and the effectiveness of audit program. Jokipii (2010) studies the determinants and consequences of internal control in firms.…”

“…Measurements for internal control components and asset misappropriation are defined based on several previous studies (Nguyen, 2017;Jokipii, 2010;Karagiorgos et al, 2011;Ta, 2017;Sawalqa & Qtish, 2012). In particular, there are 21 measurement indicators used to represent the five internal control components, 4 measurement indicators used to represent the popularity level of asset misappropriation.…”

Impact of Internal Control on Audit Program Effectiveness: The Case of Vietnam

“…Al Sawalqa and Qtish (2012) initiate and use quantitative and qualitative research to develop and validate the effectiveness measurement of the audit program, including control environment, risk assessment, and control activities. This study suggests that the relationship between the different components of internal control and the effectiveness of the audit program is positive.…”

COSO-based internal control: efforts towards good university governance

“…The internal controller of COSO 1992 and SAS 78 is a process influenced by the board of commissioners, management and other business unit personnel designed to gain reasonable assurance about the achievement of objectives in the following matters: (1) Reliability of financial reporting (2) Compliance with applicable laws and regulations (3) Effectiveness and efficiency of operation (Daniela & Attila, 2013;Rae et al, 2017). The internal control component of COSO (Committee of Sponsoring Organization) consists of five components: control environment, risk assessment, control activities, information and communication, monitoring (Mosteller & Poddar, 2017) Researches on the implementation of COSO-based internal control and good university governance refer to studies by Sawalqa & Qtish (2012), Agyei-Mensah (2016), Ghozali & Achmad (2017), and Ansori (2018). Sawalqa & Qtish's (2012) research aims to examine the role of internal control elements: control environment, risk assessment, control activities, information and communication, and monitoring, in improving the pillars of corporate governance: accountability, fairness, responsibility answer, and transparency in the insurance company.…”

“…The internal control component of COSO (Committee of Sponsoring Organization) consists of five components: control environment, risk assessment, control activities, information and communication, monitoring (Mosteller & Poddar, 2017) Researches on the implementation of COSO-based internal control and good university governance refer to studies by Sawalqa & Qtish (2012), Agyei-Mensah (2016), Ghozali & Achmad (2017), and Ansori (2018). Sawalqa & Qtish's (2012) research aims to examine the role of internal control elements: control environment, risk assessment, control activities, information and communication, and monitoring, in improving the pillars of corporate governance: accountability, fairness, responsibility answer, and transparency in the insurance company. These results suggest that internal control plays an important role in improving the pillars of corporate governance in Jordanian insurance companies, and the success of corporate governance requires compliance with all elements of internal control.…”