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The relationship between internal audit and internal control in Malaysian cooperatives: the moderating effect of risk-management training / Shamsul Anuar Abd Rahim

Cooperatives make the crucial third engine of growth in most countries' economy after the public and the private sectors. This study's first research objective examines the relationship of internal audit effectiveness characteristics on internal control among Malaysian cooperatives. The...

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Main Author: Abd Rahim, Shamsul Anuar
Format: Thesis
Language:English
Published: 2021
Subjects:
Risk management. Risk in industry. Operational risk
Internal auditing
Online Access:https://ir.uitm.edu.my/id/eprint/60665/1/60665.pdf
https://ir.uitm.edu.my/id/eprint/60665/
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spelling my.uitm.ir.606652022-05-31T04:27:43Z https://ir.uitm.edu.my/id/eprint/60665/ The relationship between internal audit and internal control in Malaysian cooperatives: the moderating effect of risk-management training / Shamsul Anuar Abd Rahim Abd Rahim, Shamsul Anuar Risk management. Risk in industry. Operational risk Internal auditing Cooperatives make the crucial third engine of growth in most countries' economy after the public and the private sectors. This study's first research objective examines the relationship of internal audit effectiveness characteristics on internal control among Malaysian cooperatives. The second research objective is to examine and visualise the adapted COSO internal control components and its effectiveness objectives among Malaysian cooperatives and present their internal control effectiveness achievement. Using the COSO internal control framework, the cooperative’s internal controls effectiveness is measured by relying on internal auditor’s assessment rather than utilising the material weakness statement in the financial statement. This evaluation method is considered more purposeful for cooperatives that do not have the requirement to disclose their material weaknesses. The result of the second research objective is used as the dependent variable to satisfy the first research objective. The third research objective is to examine the moderating effect of the cooperative’s staff's risk-management training on the relationship between internal audit effective characteristics and internal control effectiveness among Malaysian cooperatives. A survey is randomly administered to 234 Cooperatives with annual revenues of more than RM800,000.00 using a self-administered questionnaire and 126 cooperatives have responded (53.8% response rate). Latest cooperatives information is collected from Malaysian Co-operative Societies Commission (MCSC), a governing body for Malaysian cooperatives. This study has utilised the Kohonen’s self-organising map, a clustering method for the second research objective and the Partial Least Squares Structural Equation Modelling (PLS-SEM) for the other two research objectives. The clustering analysis reveals four levels of internal control effectiveness in Malaysian cooperatives, which less than one-fourth of the cooperatives are considered having effective internal controls. The four alternative levels of internal control effectiveness are the highest internal control effectiveness, low efficiency and effectiveness of activities, low reliability of financial information, and the lowest internal control effectiveness. The PLS-SEM analysis shows that internal audit accessible to senior management significantly influences the effectiveness of Malaysian cooperatives' internal control. The other variables of internal audit characteristics do not influence the cooperative’s internal controls effectiveness. Testing the moderator influence, riskmanagement training of the cooperatives' staff, is found to moderate the relationship between internal audit budget and cooperatives’ internal control effectiveness. In terms of practical implication, the findings show that internal audit effective characteristics have some influence on cooperative internal control effectiveness. Ensuring regulation, providing support to a cooperative internal audit, forming an independent internal audit unit and having effective monitoring from MCSC would further enhance internal audit purposes. The findings have some significances on those responsible for assessing and improving the cooperative’s internal control. 2021-09 Thesis NonPeerReviewed text en https://ir.uitm.edu.my/id/eprint/60665/1/60665.pdf The relationship between internal audit and internal control in Malaysian cooperatives: the moderating effect of risk-management training / Shamsul Anuar Abd Rahim. (2021) PhD thesis, thesis, Universiti Teknologi MARA.
institution Universiti Teknologi Mara
building Tun Abdul Razak Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Teknologi Mara
content_source UiTM Institutional Repository
url_provider http://ir.uitm.edu.my/
language English
topic Risk management. Risk in industry. Operational risk
Internal auditing
spellingShingle Risk management. Risk in industry. Operational risk
Internal auditing
Abd Rahim, Shamsul Anuar
The relationship between internal audit and internal control in Malaysian cooperatives: the moderating effect of risk-management training / Shamsul Anuar Abd Rahim
description Cooperatives make the crucial third engine of growth in most countries' economy after the public and the private sectors. This study's first research objective examines the relationship of internal audit effectiveness characteristics on internal control among Malaysian cooperatives. The second research objective is to examine and visualise the adapted COSO internal control components and its effectiveness objectives among Malaysian cooperatives and present their internal control effectiveness achievement. Using the COSO internal control framework, the cooperative’s internal controls effectiveness is measured by relying on internal auditor’s assessment rather than utilising the material weakness statement in the financial statement. This evaluation method is considered more purposeful for cooperatives that do not have the requirement to disclose their material weaknesses. The result of the second research objective is used as the dependent variable to satisfy the first research objective. The third research objective is to examine the moderating effect of the cooperative’s staff's risk-management training on the relationship between internal audit effective characteristics and internal control effectiveness among Malaysian cooperatives. A survey is randomly administered to 234 Cooperatives with annual revenues of more than RM800,000.00 using a self-administered questionnaire and 126 cooperatives have responded (53.8% response rate). Latest cooperatives information is collected from Malaysian Co-operative Societies Commission (MCSC), a governing body for Malaysian cooperatives. This study has utilised the Kohonen’s self-organising map, a clustering method for the second research objective and the Partial Least Squares Structural Equation Modelling (PLS-SEM) for the other two research objectives. The clustering analysis reveals four levels of internal control effectiveness in Malaysian cooperatives, which less than one-fourth of the cooperatives are considered having effective internal controls. The four alternative levels of internal control effectiveness are the highest internal control effectiveness, low efficiency and effectiveness of activities, low reliability of financial information, and the lowest internal control effectiveness. The PLS-SEM analysis shows that internal audit accessible to senior management significantly influences the effectiveness of Malaysian cooperatives' internal control. The other variables of internal audit characteristics do not influence the cooperative’s internal controls effectiveness. Testing the moderator influence, riskmanagement training of the cooperatives' staff, is found to moderate the relationship between internal audit budget and cooperatives’ internal control effectiveness. In terms of practical implication, the findings show that internal audit effective characteristics have some influence on cooperative internal control effectiveness. Ensuring regulation, providing support to a cooperative internal audit, forming an independent internal audit unit and having effective monitoring from MCSC would further enhance internal audit purposes. The findings have some significances on those responsible for assessing and improving the cooperative’s internal control.
format Thesis
author Abd Rahim, Shamsul Anuar
author_facet Abd Rahim, Shamsul Anuar
author_sort Abd Rahim, Shamsul Anuar
title The relationship between internal audit and internal control in Malaysian cooperatives: the moderating effect of risk-management training / Shamsul Anuar Abd Rahim
title_short The relationship between internal audit and internal control in Malaysian cooperatives: the moderating effect of risk-management training / Shamsul Anuar Abd Rahim
title_full The relationship between internal audit and internal control in Malaysian cooperatives: the moderating effect of risk-management training / Shamsul Anuar Abd Rahim
title_fullStr The relationship between internal audit and internal control in Malaysian cooperatives: the moderating effect of risk-management training / Shamsul Anuar Abd Rahim
title_full_unstemmed The relationship between internal audit and internal control in Malaysian cooperatives: the moderating effect of risk-management training / Shamsul Anuar Abd Rahim
title_sort relationship between internal audit and internal control in malaysian cooperatives: the moderating effect of risk-management training / shamsul anuar abd rahim
publishDate 2021
url https://ir.uitm.edu.my/id/eprint/60665/1/60665.pdf
https://ir.uitm.edu.my/id/eprint/60665/
_version_ 1735389645907165184
score 13.211869

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