Internal Control Systems in West Malaysia’s State Mosques

Abstract

The embezzlement of funds from religious organizations, particularly in western church institutions, is becoming more common. Such scandals have raised concerns about their internal control systems. Despite the lack of any reported financial scandals in mosques, there is a growing concern as to whether they experience the same deficiencies as other religious institutions do. Our study examines the internal control procedures related to the receiving income and disbursing funds in West Malaysia’s state mosques. A questionnaire survey and informal interviews were used to collect the data. The results indicate that these mosques have a strong internal control system vis-à-vis these two activities. This study also reveals that their practice of several basic control activities (e.g., segregating duties, recording financial transactions, and authorizing particular activities) is satisfactory. Though this is an exploratory study, the results may provide a benchmark for further studies examining internal control practices in religious organizations.

Financial Management Practices in Religious Organizations: An Empirical Evidence of Mosque in Malaysia

“…Some authors argued that it is important for managers of non-profit organization to engage in strategic management to ensure its survival (Bradach, 2009;Bradshaw et al, 1992;Green & Griesinger, 1996;Herman et al, 1997). Past studies examined the effects of financial management practices (Victoria, 2004;Agus et al, 2009;Baharin et al, 2011); Internal control (Sulaiman et al, 2008;Wooten et al, 2003); fund raising activities (Grace, 2003;Kamaria & Lewis, 2009;Sen, 1994) on the performance of non-profit organization. However, these studies do not focused on Islamic faith organization such as mosque.…”

“…Financial performance of a non-profit organization determines the quality and quantity of services provision (Siciliano, 1997;Sulaiman et al, 2008;Nordiawan & Hertianti, 2010). As such, it is important for a non-profit organization to maintain strong financial condition to achieve its strategic mission.…”

“…Studies that focused on mosque have been extensive. However, the scope of these studies limited to the issues and challenges on financial management of mosque (Abdul Wahab, 2008), management accounting practice and risk management practices (Abdul Rasid & Abdul Rahman, 2009), internal control systems (Sulaiman et al, 2008),conservation activities of old traditional mosque (Johar et al, 2010), micro-credit programme (Yusoff et al, 2005), types of health services provided by religious organizations (Sen, 1994) and financial management and accounting of mosques (Diptyana, 2009). From those literatures, it can be concluded that there is lack of research to investigates the factors contribute to the performance of mosque.…”

Manajemen Keuangan Masjid di Kota Yogyakarta

“…Pengendalian internal yang memadai menunjukkan komitmen pengurus masjid dalam menjalankan amanah mengelola uang umat. Selain itu, pengendalian ini dapat menjamin bahwa uang umat benar-benar digunakan secara tepat (Sulaiman, Siraj, & Ibrahim, 2008).Dana umat yang sebagian besar berasal dari donatur dan infak jamaah, maka masjid seharusnya menerapkan prinsip-prinsip akuntansi sebagai alat yang dapat merepresentasikan akuntabilitas pengelolaan dana masjid (Zain, Samsudin, & Osman, 2015).…”

The Effect of Internal Control and Total Quality Management on Organizational Performance

“…Internal control can provide only reasonable assurance regarding the achievement of an organization's objectives. Implementing a proper system will help the organization's operation become more effective and efficient [14]. Weak internal controls will cause errors and fraud in the company.…”