Role of Effective Internal Control Structure in Achievement of Targeted Success in Businesses

Abstract

Due to economic relations evolving over time, technology and changing business environments, the way in which one of the management functions, "control", is executed has undergone a number of changes. Accordingly, the management of a business has become unable to control operations directly, making it a necessity for businesses to obtain timely and reliable data for a number of purposes, including protecting assets, and eliminating or minimizing errors and frauds. Internal control structures, formed within the business to serve this purpose, have become more relevant in terms of protecting business assets, identifying the way operations are executed and ensuring execution of operations at the desired level of efficiency. Internal control is defined as a structure in businesses which is directed by board of directors, managers and employees, aims to ensure effectiveness and efficiency of operations, reliability of the financial reporting system, and compliance with laws, and is designed to provide reasonable assurance in these aims. Depending on the position they assume, officials at every level have responsibilities in the context of ensuring effective and efficient execution of the internal control structure in businesses, and accordingly, of corporate management, and attaining expected goals. This study will examine development of an effective internal control structure in terms of attaining expected success by businesses and the impact thereof on the business.

Impact of Risk Management Practices on Bank Performance: A case of Banking Sector in Pakistan

“…Muthusi (2017)concluded that various controls have to be established at diverse levels since the control by the management board alone is not enough to ensure the effective functioning of the risk monitoring system due to management board members do not have proper time to control over the organization. Hence, the management board should appoint an independent unit which is responsible for internal supervision (Turedi & Celayir, 2018;Waheed, Kaur, & Kumar, 2016).…”

Optimalisasi Penetrasi Internet bagi Intensitas Pelaksanaan Rapat Anggota Tahunan (RAT) dan Peningkatan Volume Usaha Koperasi

“…Mengoptimalkan sumber daya teknologi informasi dan komunikasi tidak terlepas dari penciptaan struktur organisasi yang baik karena hal tersebut merupakan fungsi dari strategi dan investasi suatu organisasi karenanya desainnya perlu memperhatikan faktor-faktor pragmatis seperti gaya manajemen, budaya organisasi, kualitas sumber daya manusia, dan sistem penghargaan agar berdampak pada peningkatan kinerja organsasi (Mithas & Rust, 2016). Dengan demikian internalisasi organisasi menjadi penting, beberapa penelitian menunjukkan bahwa pengendalian internal yang efektif dapat mengurangi berbagai risiko kemungkinan inefisiensi investasi, melindungi aset dan mengurangi resiko kecurangan (Dhaliwal, Hogan, Wilkins, & Wilkins, 2011) (Li, Peters, Richardson, & Watson, 2012) (Turedi & Celayir, 2018). Investasi TI dapat meningkatkan efektivitas pengendalian internal, adaptasi terhadap TI dan proses strategi bisnis serta peran sumber daya manusia dapat meningkatkan pengendalian intern (Cao, Chen, Lin, Liu, & Zhang, 2017).…”

Effect of Bank Internal Control System on Non- Financial Performance of Selected Quoted Deposit Money Bank in Nigeria

“…Furthermore, Turedi and Celayir (2018) found that effective internal control structure is a crucial element in ensuring efficiency, profitability and sustainability across businesses and that effective control structure is the key to success desired/aimed for a business. Dubihlela and Nqala (2017) found that internal risk control mitigate risks and ensure the reliability of performance reports and compliance with laws, policies and regulations, thus enhance firm performance.…”