A Review on Internal Control under the Act on Corporate Governance of Financial Companies

Theoretical basis The impact of corporate governance on internal controls and quality of financial disclosures. Research methodology Analysis of a real financial fraud event for a non-US multinational corporation. The case relies on accessing and analyzing annual reports for the firm, both before and after the fraud. Additional information on industry governance characteristics are provided in the case itself so that students can compare the firm to the industry. Case overview/synopsis This business case is centered on the analysis of Schneider Electric, a French multinational corporation, which had to restate their financial statements in 2011 because of accounting fraud. Following this event, Schneider undertook major changes in their board structure to improve internal control mechanisms. This pedagogical business case familiarizes students with international differences in ownership and board structure and emphasizes potential corporate governance changes after financial statement fraud. Complexity academic level Managerial finance, corporate finance, international finance, auditing. This case is more appropriate for upper-level undergraduate and graduate courses.

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The Role of Accounting Mechanisms for Corporate Governance in Reducing Creative Accounting Practices in Telecommunications Sector Companies in Riyadh City: An Empirical Study: دور الآليات المحاسبية لحوكمة الشركات في الحد من ممارسات المحاسبة الإبداعية في شركات قطاع الاتصالات بمدينة الرياض: دراسة ميدانية

المجلة العربية للعلوم ونشر الأبحاث مجلة العلوم الاقتصادية والإدارية والقانونية ◽

10.26389/ajsrp.l210520 ◽

2020 ◽

Vol 4 (15) ◽

Author(s):

Lamis Jameel Banasser, Maha Faisal Alsayegh

Keyword(s):

Corporate Governance ◽

Internal Control ◽

Audit Committee ◽

Internal Audit ◽

Internal Auditors ◽

External Auditors ◽

Riyadh City ◽

Creative Accounting ◽

Telecommunications Sector

The study aimed to identify the role of accounting mechanisms for corporate governance in reducing creative accounting practices in telecommunications sector companies in Riyadh city. A descriptive analytical approach was followed to conduct the field study. Sample of the study consisted of members of the audit committee, internal auditors, accountants from the surveyed telecommunications’ sector companies, and the external auditors in the audit offices that specialized on auditing the examined sample of companies. Questionnaire was used as a data collection method. Results showed that activating the role of accounting mechanisms for corporate governance can greatly contribute in limiting creative accounting practices. As they are controlling mechanisms that capable of protecting companies, shareholders and stakeholders from any manipulation or misleading information in the financial statements. Further, internal audit plays a major role in limiting creative accounting practices by examining and evaluating the effectiveness of the internal control system. Furthermore, the independence and competence of the external auditor and his commitment to the rules of conduct and ethics of the profession contribute greatly in limiting creative accounting practices in the examined companies. The study recommended the necessity of holding specialized training courses for members of audit committees, internal auditors and external auditors on methods of detecting creative accounting practices to combat and reduce them.

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The Effectiveness of Internal Control and Corporate Social Responsibility: Evidence from Chinese Capital Market

Sustainability ◽

10.3390/su10114006 ◽

2018 ◽

Vol 10 (11) ◽

pp. 4006 ◽

Cited By ~ 7

Author(s):

Xiao Li ◽

Chunmei Zheng ◽

Gang Liu ◽

Muhammad Sial

Keyword(s):

Corporate Governance ◽

Corporate Social Responsibility ◽

Social Responsibility ◽

Internal Control ◽

Economic Transition ◽

Transition Period ◽

Practical Importance ◽

Principal Agent ◽

Positive Role ◽

Corporate Social

From the perspective of the effectiveness of internal control, according to the Stakeholder Theory, Principal-Agent Theory and Reputation Theory, this paper analyzes comparatively the influences of internal control on the assumption of corporate social responsibility (SCPS) from the accrual basis, and the fulfillment of corporate social responsibility (CSRF) from the cash flow system respectively. Using a sample of 1767 firms listed in China between 2011 and 2016, we find that effective internal control has significantly promoted enterprises to assume social responsibilities. Meanwhile, effective internal control substantially improves the fulfillment of corporate social responsibility. This study overcomes the current situation that the two concepts of assumption and fulfillment of corporate social responsibility have not been distinguished in previous literature. We suggest that, in the economic transition period, the positive role of internal control in corporate governance should be promoted to protect the legitimate rights and interests of stakeholders; the adverse impact of the principal-agent relationship between shareholders and management on corporate governance should be avoided, building high-quality internal control; enterprises achieve steady and sustainable development process by the positive reputation value and robust external monitoring mechanism. This research is of practical importance to strengthen the subsequent construction of the internal control system and the long-term practice of corporate social responsibility.

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INFLUENCE OF AUDITOR INDEPENDENCE AND GOOD CORPORATE GOVERNANCE TOWARD ACCOUNTING CONSERVATISM IN INDONESIA

JOURNAL OF APPLIED MANAGERIAL ACCOUNTING ◽

10.30871/jama.v1i1.1231 ◽

2019 ◽

Vol 1 (1) ◽

pp. 20-29

Author(s):

Dovi Septiari ◽

Wirdani Atika Sari

Keyword(s):

Corporate Governance ◽

Internal Control ◽

Stock Exchange ◽

Sample Selection ◽

Financial Statements ◽

Auditor Independence ◽

Accounting Conservatism ◽

Managerial Ownership ◽

Good Corporate Governance ◽

Internal Control System

Accounting conservatism is the precautionary principle to the profit recognition and one of the corporate governance to reduce the ability of the manager in manipulate and exaggerating the financial statements. Corporate governance is a internal control system which has its business objectives through securing company’s assets. This research is aiming to see the correlation among auditor independence and good corporate governance in accounting conservatism. Characteristics of good corporate governance in this are managerial ownership, profitability, company size and leverage. This research uses two measurements of conservatism non operating accrual and market to book ratio. This research as carried out at manufacture company in the Indonesia Stock Exchange in 2010-2014. Sample selection do by purposive sampling method and obtained 49 companies in criteria accordingly. This research used data analysis and multiple liniear regression program eviews 9. The result showed that the effect of auditor independence is not significant in accounting conservatism in indonesia. Good corporate governance influential only the size of the company and ownership. The measurement of non operating accrual and market to book ratio show different results. Further research is expected to use another proxy for other variables to measure accounting conservatism.

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The Effect of the Internal Control System Effectiveness and the Quality of Financial Reporting and Its Impact on Fraud Prevention of Bandung Regency

Jurnal Manajemen Pelayanan Publik ◽

10.24198/jmpp.v5i1.25785 ◽

2021 ◽

Vol 5 (1) ◽

pp. 13

Author(s):

Yasmin Yasmin ◽

Srihadi Winarningsih ◽

Sri Mulyanti

Keyword(s):

Corporate Governance ◽

Control System ◽

Internal Control ◽

Financial Statements ◽

Research Approach ◽

Fraud Prevention ◽

Good Corporate Governance ◽

Internal Control System ◽

System Effectiveness

The corruption has emerged as the main topic of discussion in many countries and fraud prevention becomes important as well. The 2018 Annual Report of the Corruption Eradication Commission (KPK) revealed that in general the KPK's enforcement action over the past 10 years showed a significant increase. This was also confirmed by President Jokowi that one of the big problems of Indonesia is related to Corruption This study is aimed to discover fraud prevention from the perspective of financial statements through the internal control system effectiveness and good corporate governance implementation.This study uses an explanatory research approach to analyze how one variable affects other variables through hypothesis testing. The data was collected using a questionnaire which distributed and filled by all regional authorities in Bandung Regency and then analyzed through path analysis using SPSS data processing tools. The results indicate that the effectiveness of internal control systems along with the good corporate governance implementation and the quality of financial statements have a positive effect on fraud prevention and partially the effectiveness variable of the internal control system has no significant effect, while the other two variables have a significant effect.

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Islamic Corporate Governance and Internal Control Influance on Fraud in Sharia Commercial Banks

Journal of Islamic Economics and Social Science (JIESS) ◽

10.22441/jiess.2020.v1i1.003 ◽

2020 ◽

Vol 1 (1) ◽

pp. 28

Author(s):

Mariyam Chairunisa

Keyword(s):

Corporate Governance ◽

Internal Control ◽

Financial Services ◽

Commercial Banks ◽

Audit Committee ◽

Supervisory Board ◽

Negative Effect ◽

Descriptive Approach ◽

Quantitative Descriptive ◽

Positive Effect

This study aims to examine impact of Islamic Corporate Governance and Internal Control on Fraud on sharia Commercial Bank in Indonesia. The unit analysis of this research is Sharia Commercial Banks in Indonesia which have been registered in the Financial Services Authority (OJK) period 2012 to 2017. This research was done to 11 Islamic commercial banks by using quantitative-descriptive approach. The results of this research showed that Sharia Supervisory Board and Internal Control have negative effect and unsignificant on Fraud. However, Audit Committee has a positive effect and significant on fraud .

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What are the costs and benefits of an international corporate governance reregulation?

Journal of Governance and Regulation ◽

10.22495/jgr_v7_i3_p4 ◽

2018 ◽

Vol 7 (3) ◽

pp. 31-36

Author(s):

Francesco Di Tommaso

Keyword(s):

Corporate Governance ◽

Internal Control ◽

Evolutionary Process ◽

Listed Companies ◽

Governance Structure ◽

Organizational Model ◽

Corporate Governance Structure ◽

Information Transparency ◽

International Corporate Governance ◽

International Investors

This work is a research that applies the organizational model of the business organization of corporate governance, to a process of changing in the organizational structure. This paper defines the various organizational solutions and the various levels of complexity that the corporate governance structure, through its reference context, the load of available information and objectives, must support by choosing the optimal organizational solution. Before 2005 Enron under the management of the American government with logic of mass production not very attentive to the different needs of customers. Today the optimal organizational solution adopted is the "perfect integration with its distributors" throughout the peninsula, maximizing the quality of service to the customer and the knowledge of the various areas of expertise making the company more flexible and more competitive. The growing generalized attention (businesses, investors, academic circles) towards of the internal control system is part of a complex evolutionary process characterized from greater competition/boost to efficiency, emphasis on information transparency, innovative regulatory evolution. The importance of the theme of corporate governance in the world is further increased thanks to the drafting of the international Corporate Governance Code for listed companies, which aims to reassure the community of international investors on the existence, in listed companies, of an organizational model which provides for adequate allocation of responsibilities and powers, and a correct one balance between management and control.

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