Conducted by BatStateU
, Started on 2016 -
Completed on 2017
Completed
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The control environment forms the foundation for the other components of internal control system. The absence of one or more significant elements of the control environment will cause the system to be ineffective; notwithstanding the strength of the remaining four components. Thus, the control procedures and the control environment are evaluated to give a composite picture of the actual internal control system of the small enterprises, after which its effectiveness is assessed. This study highlights the assessment of control environment of small enterprises in Batangas City. Five factors of control environment were evaluated: integrity and ethical values, active participation of those charged with governance, commitment to competence, personnel policies and procedures, and assignment of responsibility and authority/ organizational structure. To attain the objective, the researchers used descriptive method of research. Control environment policies and procedures adopted by the small enterprises were evaluated using control environment questionnaires which were distributed to the owners or managers of selected 212 small enterprises in Batangas City. The factors being considered in the profile of the respondents were form of ownership, number of employees and number of years in operation. The significant differences were analyzed using variance analysis. The study revealed that in terms of Form of Ownership, majority of the respondents is Corporation which is 68%. In terms of number of employees, most of the respondents have 1-5 employees and lastly, with regards to number of years of operation majority are operating within 6-10 years. Results indicated that generally, the control environment of small enterprises was effective. In addition, there was no significant differences in the assessment of control environment when grouped according to profile variables in terms of active participation of those charged with governance, commitment to competence, integrity and ethical values and personnel policies and procedures but vary in terms of assignment of responsibility and authority/ organizational structure. The respondents strongly agreed that the five factors of control environment in small enterprises in Batangas City are being practiced. Integrity and ethical values acquired 3.53 composite mean. As a result, active participation of those charged with governance acquired 3.50 composite mean. On the other hand, assignment of responsibility and authority or organizational structure acquired 3.52 composite mean. Furthermore, commitment to competence acquired 3.55 composite mean. Lastly, personnel policies and procedures acquired 3.50 composite mean. The results showed that these enterprises have a very strong control environment based on the five factors. Researchers proposed action plan that will serve as output which may improve the control environment of small enterprises in Batangas City.