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The effect of internal control components on internal control effectiveness: a structural equation approach
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Shokrollah Khajavi   , Dariush Tahmasebi Aghbelaghi * , Soraya Weysihesar |
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Abstract: (102 Views) |
The efficiency and quality of the internal control system implemented by the organization's management are key factors in the ability of a business unit to survive. Internal controls are a system of rules and processes that help companies comply with laws and regulations, improve operational efficiency and effectiveness, and achieve reliability of financial reporting. The level of internal control required to achieve these three objectives is considered as a measure of the effectiveness of internal control for the purposes of this study. COSO framework states that the existence of five components (control environment, control activities, risk assessment, information and communication, monitoring) leads to effective internal control. However, these frameworks only provide broad guidance on internal control concepts and leave the details to the adopting companies themselves. Therefore, the main goal of the current research is to investigate the effect of internal control components on the effectiveness of internal control in companies admitted to the Tehran Stock Exchange. This research is descriptive-survey in terms of nature and method, and a questionnaire was used to collect information. The statistical population of the research consists of board members, financial managers, accountants and auditors of companies admitted to the Tehran Stock Exchange. The structural equation approach has been used to test the research hypotheses. The results show that there is a positive and significant relationship between each of the components of internal control and the effectiveness of internal control.
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| Keywords: Internal Controls, Effectiveness, COSO Framework, Structural Equations |
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Full-Text [PDF 1401 kb]
(48 Downloads)
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Type of Study: Research |
Subject:
Auditing
Received: 2023/11/17 | Accepted: 2024/04/30 | Published: 2025/02/28
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