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Chapter III

METHODOLOGY

3.1 Research Design

The study regarding the assessment of the effectiveness of the internal control

and management status of Non-Roman Catholic churches in the area of Metro Manila

was conducted by the following three stages: (1) preparatory phase, (2) data gathering,

and (3) data analysis and conclusion phase.

For the preparatory phase, the researchers will start with conceptualizing of

ideas for a thesis topic and title. After the topic and the title has been decided and

agreed upon, the researchers will obtain approval of the topic and the title from their

thesis adviser, Professor Amir T. Auditor, CPA. The topic will be about the Internal

Control Status of Non-Roman Catholic Churches in Metro Manila. Alongside the

approval of the topic and the title, the researchers will formulate the objectives of the

study. Next, the researchers must determine the scope and limitations of the study in

order to set the parameters of it. This will be followed by the gathering and review of

related literatures to be used as references for the study. The researchers will then

identify the respondents of the study based on criteria. Lastly, the research design will

be formulated to serve as a plan of control of the study.

The data gathering phase will begin after the preparatory phase. The primary

source of data was collected and analyzed through quantitative (Survey questionnaire)
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method. To appropriately work out with research objectives, the researchers additionally

used secondary data such as published journals, and other research related documents.

The survey-questionnaires will be given out to the selected respondents. Respondents

will be given enough time to complete the questionnaire. Data to be obtained from the

survey will be treated strictly confidential.

Lastly, data analysis and conclusion phase will be performed. Data from each

question will be tabulated for a clearer presentation. After that, a detailed discussion and

interpretation of results will follow. Through that, the researchers can now formulate a

conclusion that will address the objectives of the study. Lastly, the researchers will offer

recommendations for the betterment of succeeding studies and researches.

The researchers will use a non-experimental, descriptive method of research.

Data will be collected through the use of a survey-questionnaire and will be interpreted

based from the responses of the sample to the used.

3.2. Sample and Study Site

3.2.1. Sampling Design

The respondents of this study who are the non-Roman Catholic churches

will be selected and assessed based on their internal control and management.
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3.2.2. Methods of Respondent/Participant Selection

The researchers will select the respondents in Metro Manila area. The

method of the study will involve non-probability sampling which uses a form of

selecting respondents through a volunteer sampling method. Several Non-Roman

Catholic churches with different denominations will be selected and go directly to

make a request if they are willing to join this study. Six denominations will be

selected in order to have an organize way of choosing respondents. In each of the

denominations chosen there will be another volunteer sampling method with the

denominations selected and the willing churches will be the respondents. The

purpose of this is to select the 30 churches who will be the respondents of this

study. The selected respondents will be given a survey-questionnaire to be

answered to assess the respondents regarding their internal management status.

Other pieces of information which include age and classification will be gathered for

the profiling sample population demographics.

3.2.3. Sample Size

A total of 30 respondents will be gathered in the study composed of non-

Roman Catholic churches in Metro Manila.

3.2.4. Place of Study

The study will be conducted in the area of Metro Manila, Philippines for
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there are a lot of non-Roman Catholic churches which can help and be used for the

study. It is more convenient because there is an easier access for reaching-out the

respondents. Moreover, it will be easier for researchers to follow-up with regard to

updating their internal control and management.

3.3. Instrumentation

A survey-questionnaire will be used as an instrument for gathering data. It

consists of items assessing the internal control of non-Roman Catholic churches located

in Metro Manila. The researchers plan to use this technique for it offers the most

efficient source of information due to standardized structure for all respondents and

anonymous feature of the survey-questionnaire.

The survey-questionnaire will be divided into 6 parts. The first part shows the

demographics of the respondents including the denomination of the church, age and

number of members. The second part will contain questions about the control

environment, which has 10 items. The third part will contain questions assessing the

control over receipts, which has 8 items. The fourth part will involve questions about the

frequency of controlling over disbursements, which has 9 items. The fifth part will consist

of questions about the frequency on reporting to members, which has 13 items. The last

part will be composed of questions regarding internal accounting controls, which has 6

items.
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The instrument is structured for the respondents to answer closed-ended

questions in which it contains both pre-coded and short or single-word answers.

Dichotomous question and Likert scale are used for simplicity and convenience to which

the respondents will only answer yes or no or the frequency of the activity. Through

closed-ended questions, the researchers will be able to limit the responses within the

scope of the study.

3.4 Data gathering procedure

The study will conducted in order to assess the status of the control and

management status of Non-Roman Catholic churches internally. The researchers will

choose 30 respondents in the area of Metro Manila that compose of different

denomination of Non-Roman Catholic churches.

Selected respondents will be given survey-questionnaires that contain

necessary questions that would help in assessing their internal controls in the

organization. All the information that will be collected from the survey-questionnaires will

be treated with confidentiality in order respect the respondent’s identity and dignity.

Participation in the study will be voluntary.

The study will be based on assessing the information in a descriptive manner. A

survey-questionnaires will be involve in conducting the research which are to be

distributed to different denomination of Non-Roman Catholic churches in Metro Manila.

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The survey-questionnaires will serve as a guide to assess the status of the

control and management status of Non-Roman Catholic churches internally. Certain

questions will be prepared by the researchers to attain and address the objectives of the

study.

The questions for the survey-questionnaires are as follows:

PROFILE TEST
Directions: Read each item carefully; Write your answer on the line provided after each
item. If options are given, choose the appropriate answer.
1. Total number of members in your church:________________
2. The classification of your church: Presbyterian___, Methodist___, Baptist___,
Pentecostal___, Evangelical___, Anglican___ or Others_____________
3. The age of your church is:____
4. Does the church hire independent CPA to perform external audit? Yes___or
No___

Directions: Read each item carefully; Encircle the option that best corresponds to your answer.
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Control Environment
Control Objective and Question(s)      
Keeping accurate accounting
information Yes No Don’t Know
Does the church have a written
procedure manual
covering the accounting and financial
process? Yes No Don’t Know
Are the church’s financial records
computerized? Yes No Don’t Know
Safeguarding the assets      
Does the church obtain an audit of its
accounting records? Yes No Don’t Know
Are excess funds placed in an interest-
bearing
account until needed? Yes No Don’t Know
Are employees who handle cash
bonded? Yes No Don’t Know
Is the person who handles cash
receipts or
disbursements also involved with the
bank reconciliation? Yes No Don’t Know
Complying with leaders’ and
contributors’ desires      
Does the church have a finance
committee? Yes No Don’t Know
Does the church prepare an annual
budget? Yes No Don’t Know
Encouraging donor support      
Does the church prepare an annual
budget? Yes No Don’t Know
Control over Receipts
Control Objective and Question(s) Frequency
Keeping accurate accounting
information
How often does the church provide
individual contribution reports to Month When
members? ly Quarterly Yearly Asked Never
           
Does your church use the envelope Alway Nearly Sometim
system? s Always es Seldom Never
Safeguarding the assets          
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Is more than one person involved

with the counting of Sunday Alway Nearly Sometim
offerings? s Always es Seldom Never
Is more than one person involved in Alway Nearly Sometim
depositing offering receipts? s Always es Seldom Never
Are cash receipts deposited the Alway Nearly Sometim
same day that they are collected? s Always es Seldom Never
Is the person who maintains the
giving records also involved with
the handling of cash receipts or Alway Nearly Sometim
cash deposits? s Always es Seldom Never
Complying with leaders’ and
contributors’ desires          
Are designated receipts separately
listed and reported until spent for Alway Nearly Sometim
the designated purpose? s Always es Seldom Never
Encouraging donor support          
How often does the church report
budget receipts compared to actual Alway Nearly Sometim
receipts? s Always es Seldom Never
How often does the church provide
individual contribution reports to Alway Nearly Sometim
members? s Always es Seldom Never
Control over Disbursements
Control Objective and Question(s)          
Keeping accurate accounting
information          
Does the church have a purchase
order system that requires approval
before purchases can be made? Yes No      
           
Are bank accounts reconciled Alway Nearly Sometim
within two weeks of receipt? s Always es Seldom Never
Safeguarding the assets          
Are check signers provided written
documentation to support each Alway Nearly Sometim
check before they sign? s Always es Seldom Never
           
How many signatures are required
on checks written? One Two Varies    
Complying with leaders’ and
contributors’ desires          
           
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If disbursements need to be made

that are not in the budget, who Churc Finance
approves them? h Committee Staff Deacons Treasurer
When the church is over or under
budget for a particular period of
time church members are given          
Alway Nearly Sometim
Oral explanations s Always es Seldom Never
Alway Nearly Sometim
Written explanations s Always es Seldom Never
Alway Nearly Sometim
Plans to correct or address s Always es Seldom Never
Encouraging donor support          
How often does the church report
budgeted disbursements compared Month When
to actual disbursements? ly Quarterly Yearly Asked Never
Reporting to Members
Frequency
When Monthl Quarterl
Control Objective and Question(s) Asked y y Yearly Never
Keeping accurate accounting
information          
How often are the following When Monthl Quarterl
presented to members? Asked y y Yearly Never
Cash receipts and disbursements When Monthl Quarterl
for the period Asked y y Yearly Never
Year-to-date cash receipts and When Monthl Quarterl
disbursements Asked y y Yearly Never
Amount of unpaid bills at the end When Monthl Quarterl
of the period Asked y y Yearly Never
Safeguarding the assets          
How often are the following
presented to members?          
When Monthl Quarterl
Amount of cash on hand Asked y y Yearly Never
When Monthl Quarterl
Balance sheet Asked y y Yearly Never
Complying with leaders’ and
contributors’ desires          
How often are the following
presented to members?          
When Monthl Quarterl
Listing of designated funds Asked y y Yearly Never
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When Monthl Quarterl

Comparisons of actual to budget Asked y y Yearly Never
When Monthl Quarterl
Encouraging donor support Asked y y Yearly Never
How often are the following
presented to members?          
Cash receipts and disbursements When Monthl Quarterl
for the period Asked y y Yearly Never
When Monthl Quarterl
Comparisons of actual to budget Asked y y Yearly Never
When Monthl Quarterl
Amount of debt outstanding Asked y y Yearly Never
Comparisons of current to prior When Monthl Quarterl
years Asked y y Yearly Never