1

Master of Science in Accounting (MAcc)Accounting Department

Course No: ACCT 632Course Name: Forensic AccountingResearch Proposal

Academic Year: 2-1438-1439Instructure: Dr. Ahmad AlsalmanStudent. No:38121730Student Name:Noha ALorf

Points earne

dfrom

10

Points earnedfrom100

Maximum pointsTraitsObjectiveNo

220

Identify and summarize the

research problem and state the

research question

Students will demonstrate that they are

critical thinkers

1

110Identify the

purpose of your research

2

110Identify the importance of your research

3

110Identify the

accounting issue of your research

4

220Identify and

summarizes the literature review

5

220Identify the

research hypothesis

6

220Identify the

research model and the variables

7

110Identify the data and sample

8

12120Total

2

Examine the effectiveness of internal control systems through the sufficiency and appropriateness of their componentsStudy on Saudi Joint Stock CompaniesIntroduction:There was a need to provide adequate monitoring system after the problems that appeared in the Saudi companies and the deterioration of their financial situation to ensure that the different levels of the company's duties and maintain a good level of control over its operations.

The internal control system established by the Company's Board of Directors, or other staff, helps to provide reasonable assurance regarding the effectiveness and efficiency of operations and the reliability of financial reporting as well as compliance with applicable laws.

Internal control has received considerable attention from auditors, management departments and legislative and supervisory bodies for a long time. Where there is increasing interest in finding ways to better control the entity and ensure that it achieves its objectives.

This is evidenced by the interest of the Saudi Capital Market Authority in improving the internal control systems of the joint stock companies. It issued a corporate governance regulation and mentioned, in part, the importance of internal control and that it is the responsibility of the board of directors. The Association of Chartered Accountants has translated the book issued by the Organization Sponsorship Committee (COSO) as a reference for the internal audit staff in the Kingdom and the Arab world.

Study problem:Because of the challenges and intense competition in the business environment, the company's goal has been to find solutions to stay

3

rather than pursue its goals. As a result, some companies resorted to the use of illegal methods to inflate their profits and thus increase their share prices in a way that attracts the investor, as happened in Mobily and others.

One of the most important reasons for such administrative and financial corruption is the weakness of the internal control systems. Some companies apply the list of governance only name, and this negatively affects the achievement of the objectives of governance.

The system of internal control is a strong line of defense that guarantees the interests of the company as well as helps to ensure the integrity of its operations and discover errors as they occur. It contains components that enable organizations to effectively operate and develop maintenance systems and maintain them efficiently that can promote the achievement of entity objectives and adapt to changes in business and operating environments.

Therefore, the problem of study can be represented in the following question:

1. Do Saudi joint stock companies have sufficient and appropriate elements to achieve effective internal control ?

Objectives of the study:

1. Highlight the importance of internal control system in Saudi companies.

2. Identify elements and components of the internal control system.3. To clarify the relationship between the elements of internal

control and the effectiveness of internal control.

The importance of studying:

4

The importance of the subject is shown in the need of Saudi companies to a regulatory environment that helps the company achieve its objectives as well as raise the level of confidence and credibility in its financial reports by investors. Especially after many of the financial scandals witnessed by the Kingdom, which led to a reduction in confidence in the Saudi economy.

Literature review:

(2015, Brahba Bilal) This study aimed to demonstrate the role of internal auditing in improving the internal control system in economic institutions. The study relied on a set of references on the subject, such as websites, magazines, etc., and a questionnaire directed to internal auditors and internal audit officers in some institutions in order to determine the degree of impact of each of the functions of the internal auditor and professional principles to improve this system. The most important results are that internal audit is one of the tools of the system of internal control functions internal auditor, it is used by the organization to assess the performance of its various activities: accounting, financial, operational and management, to identify its weaknesses, to alert management to future risks and to provide recommendations for addressing this. The internal audit activity is based on a set of elements, their impact on the internal control system, the most important of which are the independence of the internal auditor, the experience of the internal auditor and the follow-up of the internal auditor of the reported results.

(2014, Ziad Zoubi) The objective of the study is to measure the extent to which legal accountants in Jordan are able to test the effectiveness of internal controls when auditing financial statements in public shareholding companies, using the elements of internal control standards according to the American model COSO issued by the Treadway Committee. The descriptive analytical approach was used to arrive at the results of this study. A total of 100 questionnaires were distributed on the study sample, 58 of which were valid for analysis. The study concluded that there is a positive relationship between recognizing the awareness of legal accountants in Jordan and how the board of directors and managers in particular establish an ethical and

5

cultural environment and maintain a strong level. There is also a positive relationship between recognizing the awareness of legal accountants in Jordan and how to identify and manage risk. In addition, that the entity is able to assess its regulatory system and to know whether the oversight committees are performing their duties and their effectiveness whether the audit committee is external or internal (emanating from the board of directors). The study proved that there is a relationship between understanding and understanding the objective of the internal control structure and achieving the objectives of the financial reports.

(2012, Tamer Awad) Relationship between Internal Controls in Banks and Quality of Services"

This study aimed to identify the relationship between the elements of internal control and the quality of banking services (analytical study). The study was applied to banks operating in the Gaza Strip and from the point of view of their employees. The study recommended:

1. Increasing the efficiency and effectiveness of the internal controls in the banks operating in the Gaza Strip and enhancing their role in controlling the quality of banking services.

2. The need to provide a regulatory environment and raise them to the required level with the granting of powers and control to suit the requirements of banking.

3. Achieving excellence in the services provided and making them a strategy to enhance the competitiveness of banks.

(2010, the study of Smadi) "The Role of Internal Audit in Evaluating the Effectiveness of Internal Control in Jordanian Public Financial Companies"

The aim of this study was to explain the role of internal auditing in evaluating the effectiveness of internal control systems in public shareholding companies in Jordan. The study reached several results, the most important of which is that there is a major roundabout for the internal auditors in evaluating the effectiveness of the internal control systems in the Jordanian financial shareholding companies. The study recommended that Jordanian public shareholding companies should employ the employees of the Audit Department who have the

6

accounting specialization, and review the regulatory systems from time to time.

(2015, Sabri Maher) The aim of this study was to assess the extent to which internal control systems in Palestinian public shareholding companies comply with the COSO Framework, and the impact on the performance and value of the company. To achieve the objectives of the study, a questionnaire was designed to collect preliminary data on the extent of application of the internal control components in the study sample represented by (40) public shareholding companies listed on the Palestine Stock Exchange during the year 2013. One Sample T-test and Multiple Regression Analysis to test hypotheses. The study found that the internal control systems applied in public shareholding companies in Palestine are consistent with the internal control framework (COSO). The results also showed a statistically significant effect on the application of the internal control components according to the COSO framework on the financial performance indicators of companies Listed on the Palestine Stock Exchange.

(2012, Mohamed Samir) Evaluation of internal control systems according to the concept of the COSO Committee. In addition, the extent of its applicability in service and productive institutions operating in the public sector.

The aim of the study was to present the modern concepts of evaluating the internal control systems and to consolidate the general framework of the internal control systems according to the concept of the committee and the types of control controls within the internal control system and to present an applied model for the self-assessment of control risks. The most important results were the failure of most institutions operating in the public sector to estimate and measure the risks to the institutions and therefore not to adopt the self-assessment model of regulatory risks as a means of evaluating and evaluating the internal control system.

(2015, JOSEPHINE ADUAM) Although effective internal control is a critical element of corporate governance and a basis for the safe operation of organizations, there is a lack of mutual understanding

7

regarding the effectiveness of internal oversight mechanisms and management functions of government organizations in relation to the planning process. In this regard, the aim of this study is to evaluate the effectiveness of internal control mechanisms in public sector regulation with the case study of the municipality of Tuchman. A sample of 50 employees of the Tuchman Municipal Association was used. The data were collected through the interview and questionnaire. The data were analyzed using the SPSS program. The study concluded that it does not follow internal control procedures accurately TMA, respondents believe that the controls related to wages, working conditions and seniority, promotions and related transfers are important factors that enhance the effectiveness of internal control in the organization.

(2013, Houdini Fourier and Christo Ackermann) The internal control framework of the Sponsoring Organizations Committee (hereinafter referred to as the COSO Framework) is used as a recognized framework, which, if implemented, could lead to an effective internal control system and serve as the basis for the design of the research tool. The questionnaire was distributed to internal audit practitioners. Responses were received from 31 participants from the Eastern Cape and Western Cape regions of South Africa. The majority of participant's present internal audit services to local governments in the Government of South Africa. This study concludes that internal auditors believe that the control characteristics as described in COSO for "risk assessment", "information and communication", "control activities" and "control" components of internal control contribute to internal effectiveness.

8

Research methodology:

Study sample:

The sample of the study is a group of internal auditors who have an understanding of internal control systems.

Data collection:

The study is based on two aspects, the theoretical one, in which the data will be collected through the literature on the subject and the available books, references and the other, the practical aspect that will depend on the questionnaire distributed to the study sample.

We will use SPSS to analyze the data collected by the questionnaire as well as the hypothesis test

The Study Model:

EC=β0∓ β1 (CE )∓ β2 (RA )∓ β3 (CA )∓ β4 ( IC)∓ β5 (MA )∓U

U=the percentage of error in the study.

The Study Variables:

symbol Independent variable dependent variableCE Control Environment effectiveness of the

internal control(EC)

RA Risk AssessmentCA Control ActivitiesIC Information and

CommunicationMA Monitoring Activities

Hypothesis:

H1=Provides a control environment that increases the effectiveness of the internal control system.

9

H 2=A good risk assessment increases the effectiveness of the internal control system.

H 3=The implementation of the five oversight activities increases the effectiveness of the internal control system.

H 4=Having a good communication system increases the effectiveness of control.

H 5=Provide good monitoring activities that increase control effectiveness.

References:

Awad, Tamer. "Relationship between Internal Controls in Banks and Quality of Services"2012.

ADUAM, JOSEPHINE." ASSESSING THE EFFECTIVENESS OF INTERNAL CONTROLS, MECHANISM OF THE TECHIMAN MUNICIPAL ASSEMBLY"2015.

Bilal, Brahba." demonstrate the role of internal auditing in improving the internal control system in economic institutions"2015.

Internal Control — Integrated Framework, Executive Summary, COSO.

Houdini and Christo." THE IMPACT OF COSO CONTROL COMPONENTS ON INTERNAL CONTROL EFFECTIVENESS"2013.

Maher, Sabri." Assess the extent to which internal control systems in Palestinian public shareholding companies comply with the COSO Framework, and the impact on the performance and value of the company"2015.

Samir, Mohamed." Evaluation of internal control systems according to the concept of the COSO Committee"2012.

Smadi."The Role of Internal Audit in Evaluating the Effectiveness of Internal Control in Jordanian Public Financial Companies"2010.

10

Zoubi, Ziad." Measure the extent, to which legal accountants in Jordan are able to test the effectiveness of internal controls when auditing financial statements in public shareholding companies"2014.

http://www.alhayat.com/article/543027/