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A Pattern for Establishing Internal Control System in Iranian Banks

    Authors

    • Seyyed Morteza Mortazavi 1
    • Javad Shekarkhah 2
    • Ghasem Bolou 2

    1 PhD Student of Accounting, Allameh Tabataba’i University, Tehran, Iran

    2 Associate Professor, Accounting Department, Faculty of Management and Accounting, Allameh Tabataba’i University, Tehran, Iran

,

Document Type : Research Paper

10.30479/jfak.2021.15891.2891
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Abstract

Purpose: One of the possible reasons for the weakness of the internal control system of banks can be considered as the lack of a pattern for the establishment of this system. The purpose of this study is to identify the effective indicators in establishing the internal control system of banks and to introduce the effective indicators according to the contextual characteristics of Iranian banks.
Method: In order to achieve the objectives of the research, first, by reviewing the literature, effective indicators in establishing the system of internal controls in banks were identified. In the next stage, semi-structured interviews were conducted with experts in order to consider other factors affecting the research subject according to their experiences and unique context of the Iranian banks. Then, using a questionnaire and fuzzy delphi method, these factors were screened by experts’ opinions. Finally, confirmatory factor analysis test was used to determine the factor loading of the indicators.
Results: The research findings indicate that out of 119 indicators identified as effective indicators in establishing the internal control system of Iranian banks, 113 indicators has obtained the general consensus of the delphi group and by conducting factor analysis, it was determined that all these 113 indicators were of sufficient importance.
Conclusion: Banks will be able to assess the current status of the internal control system by the indicators introduced in this study and ensure the effective functioning of the internal control system.
Contribution: Findings of this study can help to identify the indicators affecting the establishment of the internal control system of Iranian banks according to the contextual characteristics of the country and identify the necessary steps to improve the effectiveness of the internal control system in banks.

Keywords

  • Control Activities
  • Control Environment
  • Internal Control System
  • Monitoring Activities
  • Risk Assessment
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Financial Accounting Knowledge
Volume 8, Issue 4 - Serial Number 31
January 2022
Pages 1-40
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  • Article View: 1,341
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APA

Mortazavi, S. M. , Shekarkhah, J. and Bolou, G. (2022). A Pattern for Establishing Internal Control System in Iranian Banks. Financial Accounting Knowledge, 8(4), 1-40. doi: 10.30479/jfak.2021.15891.2891

MLA

Mortazavi, S. M. , , Shekarkhah, J. , and Bolou, G. . "A Pattern for Establishing Internal Control System in Iranian Banks", Financial Accounting Knowledge, 8, 4, 2022, 1-40. doi: 10.30479/jfak.2021.15891.2891

HARVARD

Mortazavi, S. M., Shekarkhah, J., Bolou, G. (2022). 'A Pattern for Establishing Internal Control System in Iranian Banks', Financial Accounting Knowledge, 8(4), pp. 1-40. doi: 10.30479/jfak.2021.15891.2891

CHICAGO

S. M. Mortazavi , J. Shekarkhah and G. Bolou, "A Pattern for Establishing Internal Control System in Iranian Banks," Financial Accounting Knowledge, 8 4 (2022): 1-40, doi: 10.30479/jfak.2021.15891.2891

VANCOUVER

Mortazavi, S. M., Shekarkhah, J., Bolou, G. A Pattern for Establishing Internal Control System in Iranian Banks. Financial Accounting Knowledge, 2022; 8(4): 1-40. doi: 10.30479/jfak.2021.15891.2891

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