Factors Affecting the Effectiveness of the Internal Control System in Small and Medium Enterprises Operating in the Field of Trade and Service in Binh Thuan Province

Abstract

The study aims to identify and analyze the impact of “Control Environment”, “Control Activities”, “Risk Assessment”, “Information and Communication”, “Monitoring”, and “Information Technology” on the effectiveness of the internal control system in small and medium enterprises operating in the field of trade and services in Binh Thuan province and provides management implications to improve the internal control work of enterprises as well as enhance their competitive capacity, contributing to the overall development of the economy of Binh Thuan province. The study was conducted based on data collected from a survey of 360 small and medium enterprises operating in the field of trade and services in Binh Thuan province, through descriptive statistical analysis, scale reliability analysis, exploratory factor analysis, and regression analysis. The results of regression analysis show that all 06 factors mentioned have a positive impact on the effectiveness of the internal control system, in which “risk assessment" had the strongest impact. Accordingly, to improve the effectiveness of the internal control system, enterprises need to improve the quality of risk assessment; focus on information and communication work; establish a regular and continuous monitoring system; establish and strictly implement control procedures; improve the control environment; and improve the quality of information technology.