EuroMed J. Management, Vol. x, No.

x, xxxx 1

Nexus between COSO framework and effectiveness

of internal control systems: Public universities’
perspective

Prince Gyimah*
Department of Accounting Studies Education,
Akenten Appiah-Menka University of Skills Training
and Entrepreneurial Development,
P.O. Box 1277, Kumasi, Ghana
Email: princegyima@yahoo.co.uk
Email: pgyimah@aamusted.edu.gh
*Corresponding author

Janet Acheampong Otoo, Senanu Zoiku

and Emmanuel Ohene Krapah
Finance Directorate,
Akenten Appiah-Menka University of Skills Training and
Entrepreneurial Development,
P.O. Box 1277, Kumasi, Ghana
Email: jaotoo@aamusted.edu.gh
Email: szoiku@aamusted.edu.gh
Email: eokrapah@aamusted.edu.gh

Abstract: The study employs the 2013 Internal Control-Integrated Framework

of the Committee of Sponsoring Organizations of the Treadway Commission
(COSO) to examine whether control environment, control activities, risk
assessment, information and communication, and monitoring activities affect
the effectiveness of internal control systems in public universities in an
emerging market. The methodology is quantitative survey research using an
ordinary least square regression model to test the five components of the COSO
framework with a sample of 175 respondents from public universities in
an emerging market. The findings support that control environment, risk
assessment, monitoring activities, and the use of technology are significant
factors influencing internal control systems. However, information and
communication inversely affect the internal control systems, and control
activity does not affect the internal control systems of public universities.
Implications for theory, management, government, policymakers, auditors, and
other stakeholders are presented.

Keywords: Committee of Sponsoring Organizations of the Treadway

Commission (COSO); internal control systems; auditing; public sector
accounting; emerging markets.

Reference to this paper should be made as follows: Gyimah, P., Otoo, J.A.,
Zoiku, S. and Krapah, E.O. (xxxx) ‘Nexus between COSO framework and
effectiveness of internal control systems: Public universities’ perspective’,
EuroMed J. Management, Vol. x, No. x, pp.xxx–xxx.

Copyright © 200x Inderscience Enterprises Ltd.

2 P. Gyimah et al.

Biographical notes: Prince Gyimah is a Lecturer at the Department of

Accounting Studies Education, Akenten Appiah-Menka University of Skills
Training and Entrepreneurial Development, Ghana. He received his MPhil in
Accounting from Kwame Nkrumah University of Science and Technology,
Kumasi. He is actively involved in research covering the areas of corporate
failure and success, sustainable development goals (SDGs), financial reporting,
corporate governance, auditing, small businesses, rural entrepreneurship,
accounting education, and finance.

Janet Acheampong Otoo is a Senior Accountant at the Finance Directorate of

Akenten Appiah-Menka University of Skills Training and Entrepreneurial
Development, Ghana. She received her MBA from Kwame Nkrumah
University of Science and Technology, Kumasi, Ghana. She is a Fellow of the
Association of Chartered Certified Accountants, UK (ACCA) and a member of
the Institute of Chartered Accountants Ghana (ICAG). She is particularly
interested in topics related to accounting and finance.

Senanu Zoiku is an Accountant at the Finance Directorate of the Akenten

Appiah-Menka University of Skills Training and Entrepreneurial Development,
Ghana. He is a Chartered Accountant from the Institute of Chartered
Accountant, Ghana, and holds MBA in Accounting and Finance from the
University of Professional Studies. Accra. He is much interested in accounting
and finance topics.

Emmanuel Ohene Krapah is an Assistant Accountant at the Finance Directorate

of Akenten Appiah-Menka University of Skills Training and Entrepreneurial
Development, Ghana. He received his MSc in Finance and International
Accounting from Anglia Ruskin University, Chelmsford, UK, and he is a
Fellow of the Association of Chartered Certified Accountants, UK (ACCA).
He is particularly interested in topics related to accounting and finance.

1 Introduction

Public universities are critical players that originate and generate individual knowledge
for successive nation-building and development, and they are supposed to adjust to the
dynamic and turbulent environment and constraints of budgets (Bondzi–Simpson and
Agomor, 2021; Felício et al., 2021; Oppong et al., 2016). An effective accounting tool is
an internal control system that can curb budget constraints, misuse of funds, and
governance scandals in recent turbulent environments toward sustainable performance
(Cevahir and Çalıyurt, 2021). Thus, examining the critical factors influencing the
effectiveness of internal controls is crucial to the sustainability of public universities.
The sustainability of universities in emerging markets remains a deliberated issue given
the current fiscal crises in emerging markets, and achieving sustainable development
starts with effective internal control systems (Anh et al., 2020; Kabuye
et al., 2019). Thus, the management of institutions is under intense pressure to enhance
the effectiveness of internal control systems because it is one of the critical policies that
prevent financial risk, corruption, and fraud (Agyei-Mensah, 2018; El Junusi, 2020).
 Nexus between COSO framework and effectiveness of internal control systems 3

Despite the crucial roles of internal control systems, past and present studies have not
agreed on a validated framework or models that influence the effectiveness of internal
control systems due to multi-dimensional measures (Demeke and Kaur, 2021). Studies
that used validated models, such as the Committee of Sponsoring Organizations of the
Treadway Commission (COSO) framework, used its composite measure without
assessing its components’ effect on internal control systems (Chan et al., 2021). Also,
prior studies used management disclosures and auditor report recommendations to
evaluate internal control systems without using validated or integrated models (Cevahir
and Çalıyurt, 2021; Chan et al., 2021). Further, most studies with contradictory results
focus on financial institutions, non-financial sectors, and non-profit organisations,
neglecting public universities (Francis and Imiete, 2018; El Junusi, 2020). Meanwhile,
public universities are the most crucial sector needed for nation-building, and research
investigating its internal controls for sustainability is welcome.
Due to the recent public outcry of corporate governance scandals and misuse of funds
in public universities in emerging markets, this study fills the gaps above by investigating
the effects of five components of the COSO (2013) framework on the effectiveness
of internal control systems in public universities. Specifically, the study examines
whether or not COSO (2013) components (control environment, control activities, risk
assessment, information and communication, and monitoring activities) positively affect
the effectiveness of internal control systems in public universities in emerging markets
whiles controlling for audit size, audit committee, and information technology.
The contributions of the study are threefold. Firstly, the study uniquely extends the
institutional theory by opening the ‘black box’ of the drivers of the effectiveness of
internal control systems in public universities in emerging markets. Thus, the study adds
to existing studies and new insights on internal control systems from the perspective of
public universities. Secondly, the findings would serve as a benchmark and provide
stakeholders of higher learning institutions with an understanding of factors that
influence the effectiveness of internal control systems. Knowing the factors can help top
management strengthen their policies towards such factors that can create value, avoid
the high rise of corruption and financial risk, and ensure efficient and effective use of
scarce resources. Finally, policymakers, higher educational commissions, internal
auditors, and external auditors can use the findings for risk assessment, evaluation, and
monitoring of operational activities per applicable policies and procedures.
The rest of the paper is structured as follows: Sections 2 and 3 discuss the extant
literature and the study’s method, respectively; Section 4 discusses the results; Section 5
provides the implications for theory and practice; the Section 6 provides the limitations
and suggestions for future studies; and the final section concludes the study.

2 Literature review

The study extends the institutional theory to examine the internal control effectiveness of
public universities in emerging markets context. Historically, the institutional theory is
about how institutions protect their roles and reputation through compliance with the
4 P. Gyimah et al.

regulations, policies, laws, culture, or systems (Jayanti, 2020; Mihret et al., 2010). Mihret
et al. (2010) suggested that the institutional theory is a valid theory for internal control
effectiveness that has been employed in both developing and developed countries.
The COSO (2013) defines internal control as a mechanism carried out by the board of
directors, managers, and other staff of a company to provide fair assurances to
accomplish the transparency of financial reporting, quality of reporting, effectiveness,
and efficiency of operations, and compliance with applicable laws and regulations.
The study examines whether the five components of the COSO framework (control
environment, risk assessment, control activities, information and communication, and
monitoring activities) affect internal control systems’ effectiveness in Ghana’s public
universities.
The control environment is the institution’s culture that includes the integrity and
ethical values, commitment to competence, independence of the audit committee of the
Board of Directors, management philosophy and operating styles, organisational
structure, and human resources policies and practices (Castellano et al., 2015). Risk
management identifies the high or low-risk institutions face regarding waste, theft,
misuse, or mismanagement of resources (Onumah et al., 2012). Effective internal control
systems identify, evaluate, monitor, and mitigate organisational risk (Glover et al., 2014).
Control activities are an institution’s processes, procedures, or internal controls to
prevent risk (Chalmers et al., 2019). Control activities include performance review,
information processing review, and physical controls that detect process breakdowns,
offer instructions for prompt reactions and help attain the objectives of the institutions
(Glover et al., 2014). Information and communication show how the culture, policies,
compliances, and practices can be conveyed for strict adherence by staff from the top,
down, and through all parts of an institution (Badara and Saidin, 2013). Finally, the
monitoring activities are the structured activities used by the management of institutions
to monitor the internal controls, evaluate the effectiveness and quality of performance,
and execute supervisory roles (Li et al., 2019).
Extant literature on the determinant of internal control systems has divergent and
inconclusive determinants. For instance, Ayagre et al. (2014) found that the control
environment and monitoring activities strongly impact internal control systems.
Similarly, Anh et al. (2020) and Hung and Tuan (2019) reported that the five COSO
components: control environment, risk assessment, control activities, information and
communication, and monitoring activities, have a positive relationship with the
effectiveness of internal control systems. Tackie et al. (2016) also found that professional
proficiency, organisational independence, and career advancement positively impact
internal control effectiveness. Feizizadeh (2012) suggests that active internal control
systems increase the performance of firms. However, Lemi’s (2015) study found no
internal operational controls in the universities. Lemi (2015) further reported that an
adequate control environment and control activities existed, but universities had an
inadequate flow of information and communication.
Similarly, Onumah et al. (2012) concluded that the level of internal control does not
affect the performance of firms listed on the Ghana Stock Exchange. Altamuro and
Beatty (2010) also reported that internal controls and monitoring improved the financial
reporting quality in the USA’s financial sector. Additionally, Eko and Hariyanto (2011)
found that internal controls increase Indonesia’s good corporate governance
 Nexus between COSO framework and effectiveness of internal control systems 5

and organisational commitment. Nilniyom and Chanthinok (2011) suggested that

organisations’ innovative accounting systems depend on internal control systems.
Demeke and Kaur (2021) found that competent auditors and audit quality determine the
effectiveness of internal controls. Francis and Imiete (2018) also reported that adhering
to management policies, safeguarding assets, and staff competencies influence the
effectiveness of university internal control systems.
Further, Chan et al. (2021) also reported that an innovative firm must maintain
high control activities, control environment, and information and communication
(including monitoring and risk management). Contrary to previous studies, Kabuye et al.
(2019) posited that an internal control system does not drive the sustainability of
businesses.
The literature reveals inconsistency in the factors influencing the effectiveness of
internal control systems; to date, there is no unifiable theory (Chan et al., 2021). There is
a need for further study to enhance the understanding of the factors that drive internal
control systems in public universities due to their essential contributions to emerging
markets (Francis and Imiete, 2018). Thus, the study uses the five components of the
validated COSO (2013) framework to independently assess the components’ effects on
the quality or effectiveness of internal control systems in the public university. Along
with these lines, the hypotheses (H1 to H5) of the study are as follows:
H1. There is a positive relationship between the control environment and the
effectiveness of internal control systems.
H2. There is a positive relationship between control activities and the effectiveness of
internal control systems.
H3. There is a positive relationship between risk assessment and the effectiveness of
internal control systems.
H4. There is a positive relationship between information and communication and the
effectiveness of internal control systems.
H5. There is a positive relationship between monitoring activities and the
effectiveness of internal control systems.
The conceptual framework (Figure 1) is established based on stated hypotheses.
It displays that control environment, control activities, risk assessment, information and
communication, and monitoring activities influence the effectiveness of internal control
systems. Better control environment, control activities, risk assessment, information and
communication, and monitoring activities enhance the effectiveness of internal control
systems. The objective of this study is to answer the research question (RQ):
RQ1. How do control environment, control activities, risk assessment, information
and communication, and monitoring activities influence the effectiveness of internal
control systems in public universities in emerging markets?
6 P. Gyimah et al.

Figure 1 Conceptual framework and hypothesis

3 Methodology

3.1 Design and data

This study is a survey using a descriptive and quantitative approach to examine factors
that affect the internal control systems of public universities in an emerging market,
Ghana. This setting is relevant because there is a high demand for public universities
in Ghana, where it is becoming challenging for governments to maintain public
funds (Bondzi–Simpson and Agomor, 2021; Sarpong-Danquah et al., 2018). Thus,
understanding the challenges of budget and fund constraints facing public universities has
become very important in research. To effectively maintain the funds start with having
proper internal control systems that enhance public universities’ capacities to survive the
turbulence and dynamic changing environment for nation-building and sustainable
development (Francis and Imiete, 2018).
Ghana has 15 national public universities; however, the study focuses on the five
public universities that have been in existence for the past 20 years. Thus, the study
collects data from the University of Ghana, Kwame Nkrumah University of Science and
Technology, University of Cape Coast, University of Development Studies, and the
University of Education, Winneba – Kumasi Campus (now Akenten Appiah-Menka
University of Skills Training and Entrepreneurial Development).The study uses a simple
random sampling technique to select internal auditing, finance, and administrative staff
of the selected public universities in Ghana. Trained professionals administered
250 questionnaires (50 questionnaires to each of the five universities); however,
175 completed the survey, resulting in a 70% response rate. Of the 175 respondents
(sample), 56.57% are males (n = 99), and 43.43% are females (n = 76). Regarding the
sample involved in the internal controls issues, 16.57% are administrators (n = 29),
52.00% are in the finance department (n = 91), and 31.43% are in the internal audit
 Nexus between COSO framework and effectiveness of internal control systems 7

department (n = 55). Additionally, 70.29% are within the active working-age of 30 to 60

years (n = 123), 27.43%are within 20 to 30 years (n = 48), and 2.28% are on retirement
contracts (n = 4).

3.2 Model
The analysis uses an Ordinary Least Squares (OLS) regression model with the help of
Stata software (version 15.0). The dependent variable was internal control systems; the
control environment, risk assessment, control activity, information and communication,
and monitoring activity were the independent variables. Audit size, audit committee, and
information technology are the control variables, and δ0 to δ8 are the coefficients of the
variables. The econometric model is:
Internal Control = δ0 + δ1Control Environment + δ2Risk Assessment + δ3Control
Activity + δ4Information and Communication + δ5Monitoring
Activity + δ6Audit Size + δ7Audit Committee + δ8Technology
+ Error Term (1)

3.3 Measures
The dependent variable, internal control, was measured using a 7-point Likert scale for
five perceived statements adapted from Anh et al. (2020) and Hung and Tuan (2019). The
five independent variables were also measured using a 7-point Likert scale using
perceived statements from prior studies. The control environment used six indicators
from Anh et al. (2020), COSO (2013), and Onumah et al. (2012). The study used four
indicators from COSO (2013) and Hung and Tuan (2019) to measure the variable for risk
assessment. Similarly, the control activity was measured using five perceived statements
from Anh et al. (2020), Hung and Tuan (2019), and Nguyen and Ha (2010). Additionally,
the study uses the five perceived statements from Anh et al. (2020), COSO (2013), Hung
and Tuan (2019), and Onumah et al. (2012) to measure Information and Communication.
Finally, the Monitoring Activity was measured using three perceived statements from
Anh et al. (2020), COSO (2013), Hung and Tuan (2019), and Onumah et al. (2012).
Audit size is a ratio measure in terms of the control variables, whereas the audit
committee and the use of information technology were dummies. Audit size equals the
number of internal auditors employed within the public universities. Technology
nowadays enhances the efficiency of accountants, auditors, financial officers,
administrators, and managers of institutions (Cangemi, 2016). Thus, we control
technology as one (1) if internal audit uses ICT or computers to process and retrieve
information for their operations, zero (0) otherwise. Salloum et al. (2015a, 2015b)
suggest that the audit committee controls and limits the financial risk, improving
transparency and audit quality. The audit committee is also a dummy variable and equals
one (1) if the public university has audit committees and zero (0) otherwise (Awinbugri
and Gyimah, 2019). Table A1 (see Appendix) shows the measures or indicators of the
variables.
8 P. Gyimah et al.

4 Result and discussion

4.1 Descriptive and correlation

Table 1 reports the descriptive statistics (mean and standard deviation) and Pearson
correlation matrix of the variables used for the study. Table 1 indicates that the control
environment’s mean and standard deviation (SD) are 5.75 and 0.97, respectively. The
outcome suggests an effective control environment because the public universities follow
integrity and ethical values, adhere to competent and independent management, follow
the organisational structure, management beliefs, and operating styles, and follow human
resources policies and practices in public universities in Ghana. The Pearson correlation
also shows a positive (r-values = 0.41) and significant (p < 0.01) relationship between
control environment and internal control systems. Again, the study indicates that risk
assessment (mean = 5.86, SD = 0.81) shows that public universities in Ghana could
identify, evaluate, monitor, and mitigate risk. In terms of control activity, the result
(mean = 5.59, SD = 0.48) shows that the respondents agree that there are effective
control activities in public universities in Ghana. The study further suggests that
concerning information and communication (mean = 5.94, SD = 1.02) implies that
public universities can convey and communicate their culture, policies, compliances, and
practices.
The monitoring activities descriptive result (mean = 4.37, SD = 1.99) in Table 1
implies that there is somehow or mediocre monitoring by management of public
universities in evaluating internal controls, and quality of performance. Similarly, the
correlation result shows that risk assessment (r-values = 0.32, p < 0.05), control activities
(r-values = 0.39, p < 0.05), information and communication (r-values = 0.30, p < 0.05),
and monitoring activity (r-values = 0.32, p < 0.05) positively relates to internal control
systems.
The study indicates that public universities in Ghana have an average internal audit
staff of 11. Additionally, 78.8% of respondents (n = 138) agree that their public
universities have audit committees. Finally, 86.3% (n = 151) of the sample responded
that they use information and communication technology software to undertake public
universities’ financial and internal control activities.
Another vital concern is collinearity and multicollinearity issues. Gyimah et al.
(2020) and Jalloh et al. (2019) argued that a study’s data is valid and has no
multicollinearity issues when the r-values of the Pearson correlation matrix are less than
0.70, and Cronbach Alpha is greater than 0.70. The r-values are within the benchmark
given by scholarly researchers (Appiah et al., 2020a; Adeola et al., 2021; Gyimah et al.,
2019; Gyimah and Adeola, 2021; Gyimah and Lussier, 2021; Sakyiwaa et al., 2020).
Further, the Cronbach Alpha for each variable is more than 0.70. Therefore
multicollinearity or collinearity issues should not be a problem for this study.
 Nexus between COSO framework and effectiveness of internal control systems 9

Table 1 Descriptive and correlation (N = 175)

10 P. Gyimah et al.

4.2 Empirical results

Model 1, as indicated in Table 2, reports an adjusted R2 of approximately 75%, and the
model significance level is less than 1% indicating that the model used for the study is
very robust, relevant, and suitable for achieving the study’s objectives. Table 2 shows
that control environment (β = 0.610, p < 0.01), risk assessment (β = 0.511, p < 0.05), and
monitoring activities (β = 0.491, p < 0.05) positively affects the effectiveness of internal
control systems. Hence, the study accepts the hypotheses H1, H3, and H5 and concludes
that control environment, risk assessment, and monitoring influence internal control
systems’ effectiveness in public universities in Ghana. However, the result shows that
control activities (β = 0.593, p > 0.05) does not influence internal control systems.
Contrary to the expectation, the study reports adverse relations (β = –0.210, p < 0.01)
between information and communication and the effectiveness of internal control
systems. The study fails to accept the hypothesis H2 and H4. It concludes that while
control activities do not drive internal controls, information and communication decrease
internal control systems’ effectiveness in the public universities in Ghana. Regarding the
control variables, whilst the usage of technology (β = 0.685, p < 0.05) in internal control
activities influences the effectiveness of internal control systems, audit size (β = 0.520,
p > 0.05), and audit committee (β = 0.379, p > 0.05) does not contribute to the
effectiveness internal control systems in public universities in Ghana.

Table 2 Regression results

Coefficient Standard error p-value

Control environment 0.610 0.121 0.000
Risk assessment 0.511 0.209 0.043
Control activity 0.593 0.379 0.235
Information and communication –0.210 0.076 0.006
Monitoring activity 0.491 0.193 0.037
Audit size 0.520 0.329 0.100
Audit committee 0.379 0.197 0.103
Technology 0.685 0.283 0.002
Constant 1.736 0.919 0.125
Observations 175
Model significance 0.000
R2 0.766
Adjusted R2 0.751

4.3 Discussion of results

The positive and significant effect between the control environment and internal control
agrees with the studies of Anh et al. (2020), Onumah et al. (2012), and Lemi (2015).
They suggested that a controlled environment increases internal control systems.
The study also indicates that risk assessment impacts internal control systems. The
relationship between risk assessment and internal control systems agrees with Tackie
et al.’s (2016) study that reports similar results on risk assessment components.
 Nexus between COSO framework and effectiveness of internal control systems 11

Additionally, the significant positive relationship between monitoring activities and

internal control systems indicates that proper management monitoring and supervision
could contribute to effective internal control systems. These findings agree with Anh
et al.’s (2020) study that reported similar results.
On the contrary, the results show a positive and no significant relationship between
control activities and internal control systems. This finding contradicts the results of
Ahmad et al. (2009), Anh et al. (2020), and Onumah et al. (2012), which suggested that
effective organisational control activities contribute to internal control effectiveness.
However, information and communication components indicated a negative and
significant relationship between information and communication and the effectiveness
of internal control systems. This result contradicts prior studies by Ahmad et al. (2009),
Anh et al. (2020), Onumah et al. (2012), and Lemi (2015). The findings of information
and communication could imply that when all information, including confidential
information, is communicated to all staff or employees in public universities, it decreases
the effectiveness of internal control systems. In terms of the control variable, technology
has a positive and significant relationship with internal control systems, suggesting that
an internal auditor that uses technology in the auditing functions could influence the
effectiveness of the internal audit. However, the size of the audit unit and audit
committee does not affect the effective internal control systems in public universities in
Ghana.

5 Implications

Based on the study’s findings, we present the implications for theory and managerial
practice for stakeholders.
Theoretically, the study relies on institutional theory to open the ‘black box’ of the
factors influencing the effectiveness of internal control systems in an emerging market
context of public universities. Using the validated COSO (2013) framework, the study
finds that control environment, risk management, and monitoring activities are critical
determinants of compliance or effectiveness of internal control systems in public
universities. Also, technological applications enhance effective internal control systems
in public universities in emerging markets.
The practical implications are as follows. First and foremost, the management of
public universities should adhere to their (1) control environment policies, (2) risk
assessment policies, and (3) strengthen their monitoring and supervisory activities.
Regarding the effectiveness of the control environment, top management of public
universities should be committed to staff competencies. Similarly, the government should
appoint University Council members with the requisite knowledge of management and
administration of higher learning institutions. Also, there should be clear responsibilities
and ethical values for staff in public universities. In managing risk, the internal audit
department should review the activities of senior managers, especially how funds are
spent, to identify any material risk and report deficiencies to the governing board of the
universities. Further, the government should have a separate independent board of
external auditors to evaluate the financial activities of the public quarterly instead of
yearly. Likewise, internal auditors and independent audit committees should provide a
quarterly report on the universities’ internal control systems that can enhance quality
12 P. Gyimah et al.

financial management and reporting, good corporate governance, and avoid financial
distress of public universities.
Moreover, public universities’ finance and audit units need to be technologically
inclined, and there should be regular training on modern information technology systems
in processing financial and accounting information. Technology in auditing procedures
detects financial omissions, monitors risk, and ensures internal control effectiveness.
Finally, public universities’ finance and administration departments should fully adopt
the International Standard of Auditing, International Public Sector Accounting Standard,
and other international financial reporting frameworks for quality or effective internal
audits. Thus, the professional accounting and auditing bodies in emerging markets should
conduct regular Continuing Professional Development (CPDs) to help practicing
managers in the public universities on how and when to apply the international
accounting and auditing standards appropriately (Appiah et al., 2020b).

6 Limitations and suggestions for further research

As with all research, this study has limitations with suggestions on how to improve them
in future studies. Firstly, the study employs subjective measuring survey instruments for
the variables instead of financial or objective data to achieve the study’s purpose. The
reason for using subjective indicators is the unavailable secondary data of the indicators,
and the respondents were unwilling to provide their secondary data to conduct the study.
Past studies by Anh et al. (2020), Hung and Tuan (2019), and Onumah et al. (2012) used
a similar approach to determine the factors that influence the effectiveness of internal
control systems; however, future studies should use secondary data to examine the
drivers of internal controls effectiveness or data triangulation.
Secondly, the study excluded external auditors in the survey, and therefore,
future studies should examine external auditors’ perception of internal control systems’
effectiveness in public universities in emerging markets. Another limitation is that the
study uses a quantitative approach for data analysis; therefore, future studies should
adopt a qualitative approach so that the findings can be juxtaposed for effective decision-
making toward improving educational services in emerging markets.
Finally, the study used responses from five selected universities in Ghana and
generalising the findings to cover all universities in emerging markets may be
problematic. Future studies can consider assessing all universities, including the private
sector in Ghana and other emerging markets. However, in Ghana, internal control
systems issues in private or public universities are not entirely different from other
emerging markets due to prevailing professional applicable policies, codes, laws, and
frameworks. Henceforth, the results could still be useful for policymaking.

7 Conclusions

Contemporary researchers and stakeholders are calling for more studies on internal
controls due to high-quality financial reporting and efficiency, the recent public outcry of
corporate governance scandals, and the ill use of public funds in public institutions.
The study extends the literature on educational institutions’ context by examining
whether the five COSO components (control environment, risk assessment, control
 Nexus between COSO framework and effectiveness of internal control systems 13

activity, information and communication, and monitoring activity) affect internal control
systems in a developing country context public universities. The study uses a multiple
regression model to analyse 175 responses from five public universities in Ghana. This
study established that the control environment, risk assessment, monitoring activities,
and the use of technology positively affect internal control systems. Control activity,
however, does not affect the effectiveness of internal controls, and information and
communication inversely affect the internal controls in public universities in Ghana. This
study extends our understanding of how the 2013 Internal Control-Integrated Framework
of COSO influence the effectiveness of internal control systems in public universities.
The study findings provide practical advice for educational practitioners and universities’
stakeholders. Since there is no unified theory of the drivers of the effectiveness of
internal control systems, the research findings also contribute to utilising the COSO
model as a global internal controls framework for the sustainability of public universities.

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Appendix

Table A1 Measures of variables

Variables Indicators Source Impact

Effectiveness of • Report objectives Anh et al. (2020)
internal control
• Compliance with laws and regulations Hung and Tuan (2019)
systems
• Operational objectives
• Financial reports are reliable
• Effective and efficient operations
Control • Integrity and ethical values Anh et al. (2012) Positive
environment
• Management’s philosophy and operating COSO (2013)
style Onumah et al. (2012)
• Organisational structure
• Financial reporting competencies
• Authorities and responsibility
• Commitment to staff competencies
Risk assessment • Identification of risks COSO (2013)
• Financial reporting risks Hung and Tuan (2019)
• Financial reporting objectives
• Fraud risk assessment
Control activities • Risk assessment integration Anh et al. (2020) Positive
• Reviewing the senior management Hung and Tuan (2019)
operations Nguyen and Ha (2010)
• Selection and development of control
activities
• Physical controls
• Policies and procedures
Information and • Accurate and appropriate information Anh et al. (2020) Positive
communication
• Internal control information COSO (2013)
• Financial reporting information Hung and Tuan (2019)
• Internal information and communication Onumah et al. (2012)
work
• External information and communication
work
Monitoring • Regular monitoring of activities Anh et al. (2020) Positive
activities
• Periodic evaluations and monitoring of COSO (2013)
financial activities inside the universities Hung and Tuan (2019)
• Independent assessment of internal Onumah et al. (2012)
controls
• Reporting deficiencies
 Nexus between COSO framework and effectiveness of internal control systems 17

Table A1 Measures of variables (continued)

Variables Indicators Source Impact

Audit size Number of internal auditors Garven and Scarlata Positive
(2021)
Technology Dummy: (1) if an internal audit uses ICT in the Cangemi (2016) Positive
auditing processing, zero (0) otherwise.
Audit committee Dummy: (1) presence of audit committee, zero Awinbugri and Gyimah Positive
(0) otherwise. (2019)