Influence of Components of Internal Control on the Effectiveness of Internal Control: Evidence from Transport Construction Enterprises in Vietnam

Abstract

The research purpose of the article is to evaluate the effects of the internal control components on the effectiveness of internal control of transport construction enterprises in Vietnam, on the basis of which we made recommendations to contribute to improving the effectiveness of internal control. Sample was collected from Vietnamese medium and large transport construction enterprises, the total number of sample questionnaires sent was 400, 330 filled-up questionnaires was collected and 250 was used for the study purpose. Quantitative research method was used for the study with the help of the SPSS software. The variables in the model are as follows: the dependent variable is the effectiveness of internal control, 5 independent variables are: control environment, risk assessment, control activities, communication, and monitoring. The results of the analysis explain 80.4% variation as a result of the effect of internal control on the Vietnamese transport construction enterprise. All five components positively affect the effectiveness of internal controls in the order of influence, which are: control activities, control environment, communication, risk assessment and monitoring. This study contributes in providing more empirical evidence about the effects of internal control components on the effectiveness of internal control of transport construction enterprises in Vietnam. The study has proposed a number of recommendations to help transport construction enterprises improve control activities and contribute towards improving the effectiveness of internal control.

The Role of Control Environment (CE) in the Public Sector in Preventing Fraud: A Literature Study

“…The CE has a major role in strengthening the company's IC system, including in the government sector (Mendes de Oliveira et al, 2022;Rae & Subramaniam, 2010). This is reinforced by the results of research by Baek et al, 2016 andVu et al, 2020), which state that all elements of IC, including the CE, have a role in creating effective IC, in line with the can that. from Bruwer, 2016;Chang et al 2020;FIRAT, 2008;Tsay & Turpen, 2011;Ziegenfuss, 2001, show the importance of strengthening the company's CE to minimize the potential for fraud or weaknesses or other forms of unethical behavior.…”

“…management, all employees without exception, and serves to form an organizational culture that focuses on the importance of control in the organization. According to Vu et al, 2020, each of these components affects the overall effectiveness of the IC system.…”

“…The CE, together with other IC elements, aims to strengthen and fortify the company from things that have a bad influence on the company's operational activities. (Vu et al, 2020).…”

Exploratory Study on the Importance of Internal Control in Auditing

“…Risk assessment is the process of recognizing, examining, and responding to risks that come from both internal and external sources and pose a threat to the accomplishment of organizational goals. In order for businesses to thrive, they must all evaluate and address risks that arise from both within and outside the company (Vu et al, 2020). Regardless of the size of a business, it is exposed to risks such as competition, changes in customer behavior, regulatory changes, and shifts in the economic and political landscape.…”

“…Communication should not only be one-way, but employees should also have effective means to communicate information to top management. Successful communication should also involve external stakeholders (Nguyen, 2020;Vu et al, 2020). According to COSO (2013), there are three basic principles of effective communication; 1) Using relevant information to support the functioning of other internal control components.…”