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The effect of internal control on asset misappropriation: The case of Vietnam

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  • Tran, Manh Dung Tran
  • Le, Thi Thu Ha

Abstract

Asset misappropriation is a kind of fraud that may cause severe damages to the businesses. The internal control system is expected to provide a reasonable assurance for the management of the businesses in preventing and detecting frauds, including asset misappropriation. The study is conducted to examine the effect of internal control system on asset misappropriation in Vietnamese firms. Based on questionnaires collected from internal auditors, accountants and department managers in Vietnamese firms, the study assess the impact of COSO five internal control components on the popularity of asset misappropriation in the firms. The results show that of the five components, control environment presents the strongest impact, followed by control activities, information and communication in respective order. Determinants with the mildest impact are risk assessment and monitoring of control. Based on the findings, it is important that the management of the firms improve the internal controls to effectively reduce the chance of fraud in their firms.

Suggested Citation

  • Tran, Manh Dung Tran & Le, Thi Thu Ha, 2018. "The effect of internal control on asset misappropriation: The case of Vietnam," Business and Economic Horizons (BEH), Prague Development Center, vol. 14(4), pages 941-953, October.
    • Handle: RePEc:pdc:jrnbeh:v:14:y:2018:i:4:p:941-953
    DOI: http://dx.doi.org/10.15208/beh.2018.64
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    References listed on IDEAS

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    1. Mahdi Salehi & Mahmoud Mousavi Shiri & Fatemeh Ehsanpour, 2013. "Effectiveness of Internal Control in the Banking Sector: Evidence from Bank Mellat, Iran," The IUP Journal of Bank Management, IUP Publications, vol. 0(1), pages 23-34, February.
    2. Annukka Jokipii, 2010. "Determinants and consequences of internal control in firms: a contingency theory based analysis," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 14(2), pages 115-144, May.
    3. Paul Coram & Colin Ferguson & Robyn Moroney, 2008. "Internal audit, alternative internal audit structures and the level of misappropriation of assets fraud," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 48(4), pages 543-559, December.
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    Cited by:

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    More about this item

    Keywords

    Asset misappropriation; fraud control; internal control; Vietnam;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

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