ENHANCING THE EFFECTIVENESS OF INTERNAL CONTROL SYSTEMS IN SMES: EVIDENCE FROM VIETNAM

Abstract

This study investigates the determinants influencing the effectiveness of internal control systems in small and medium-sized enterprises (SMEs) in Binh Duong province, Vietnam. By applying the COSO 2013 framework, the research explores how control activities, information and communication, monitoring, control environment, and risk assessment impact internal control effectiveness. Data were collected through 150 surveys, with 125 valid responses analyzed using multivariate regression models. Findings indicate that control activities, information and communication, monitoring, and control environment significantly influence internal control effectiveness, while risk assessment does not show a notable impact. The study proposes practical recommendations for enhancing internal control systems, improving SMEs' operational efficiency and financial stability.