Journal of Advances in Economics and Finance

Download PDF (425 KB) PP. 71 - 87 Pub. Date: August 1, 2018

DOI: 10.22606/jaef.2018.33002

• Thanh Thi Nguyen
  Accounting Department, Faculty of Economics and Business Administration, University of Hong Duc, Vietnam
• Dr. Ngoc Thi Bui^*
  Accounting Department, University of Labor and Social Affairs, Vietnam Room No. 44, A8, 120 Hoang Quoc Viet Street, Cau Giay District, Hanoi, Vietnam

In 2013, the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provided a fairly comprehensive definition of internal control: “Internal control is a process affected by entity’s board of directors, management, and other personnel, it is designed to provide reasonable assurance regarding the achievement of objectives relating to operations, reporting, and compliance”. This definition indicates that internal control is indispensable to provide a reasonable guarantee for an organization's ability to achieve its goals and sustainable development. Currently, the internal control system in Vietnamese paper manufacturers has not met essential needs of the society. There are more than 500 paper manufacturing enterprises in the country, in which more than 90% are small enterprises, and in which internal controls are not effectively implemented. This paper examines reality of internal control in paper manufacturing enterprises in Northern Vietnam. Based on that, evaluation and measures are provided in order to improve internal control. Research results showed that there are five factors which directly affect internal control: control environment, risk assessment, control activities, information and communication, monitoring activities.

Internal control, effectiveness of internal control, paper manufacturing enterprises

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