Research Article
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The Role of Internal Control in Hotel Business: A Research on Five-Star

Year 2020, , 227 - 241, 25.04.2020
https://doi.org/10.25287/ohuiibf.589519

Abstract

Today, the growth of enterprises and the more complexity of their
activities bring up the need for an internal
control system. Therefore, an effective
internal control system must be established in hotel enterprises in order to
minimize the risks that may arise. Based on this fact, the main purpose of this
study is to determine the perceptions of hotel managers towards the internal
control system and to examine the effects of dependent variable of “internal
control system” on the independent variables of “segregation of duties”,
“protection of assets” and “verification of transactions”. Additionally, the
sub-objective of this study is to research the relationships between managers’
perceptions of the internal control
system and demographic characteristics. The research was carried out with the
participation of 120 managers in five-star hotel enterprises operating in
Alanya. The research data was collected through questionnaire technique. As a
result of the research, there was no significant difference between the
independent variables of “segregation of duties”, “protection of assets” and
“verification of transactions” and the internal control system perceptions of
the managers. However, it was also concluded that managers’ perceptions of the internal control system differed statistically
according to their educational status.

References

  • Abdullahi, M.H. & Muturi, W. (2016). Effect of Internal Control Systems on Financial Performance of Higher Education Institutions in Puntland, International Journal of Economics, Commerce and Management United Kingdom, IV(12), 762-780.
  • Abiola, I. & Oyewole, A.T. (2013). Internal Control System on Fraud Detection: Nigeria Experience, Journal of Accounting and Finance, 13(5),141-152.
  • Addey, J.N.A. (2012). An Assessment of Internal Control System on the Image of the Hospitality Industries in Royal Mac-Dic Hotel and Capital View Hotels. Unpublished Master’s Thesis. Kwame Nkrumah University of Science and Technology, Kumasi, Ghana.
  • Ademola, I.S., Adedoyin, A.O. & Alade, O.R. (2015). Effect of Internal Control System in Nigeria Public Sectors: A Case Study Of Nigeria National Petroleum Corporation, International Journal of Economics, Commerce and Management, III(6), 1093-1105.
  • Aktürk, A. (2015). Konaklama İşletmelerinde Etkin Bir İç Kontrol Sisteminin Tesisi Bağlamında Muhasebe Sistem Organizasyonu: Bir Vaka Analizi, Journal of Accounting, Finance and Auditing Studies, 1(4), 108-127.
  • Aldridge, R. & Colbert, J. (1994). Management's Report on Internal Control, and the Accountant's Response, Managerial Auditing Journal, 9(7), 21-28.
  • Altunışık, R., Çoşkun, R., Bayraktaroğlu, S. & Yıldırım, E. (2007). Sosyal Bilimlerde Araştırma Yöntemleri SPPS Uygulamalı. İstanbul: Sakarya Publishing.
  • Annaraud, K., Singh, D. & Lively, H. (2014). Assessing and Analyzing Internal Control Practices in the Lodging Industry. The Journal of Hospitality Financial Management, 22, 26-31.
  • Ayagre, P., Appiah-Gyamerah, I. & Nartey, J. (2014). The effectiveness of Internal Control Systems of Banks: The case of Ghanaian banks. International Journal of Accounting and Financial Reporting, 4(2), 377-389.
  • Aziz, M.A.A., Said, J. & Alam, M.M. (2015). Assessment of the Practices of Internal Control System in the Public Sectors of Malaysia. Asia-Pacific Management Accounting Journal, 10(1), 43-62.
  • Biegelman, M.T. & Bartow, J.T. (2006). Executive Roadmap to Fraud Prevention and Internal Control: Creating a Culture of Compliance. New Jersey: Wiley.
  • Can, A. (2013). SPPS ile Bilimsel Araştırma Sürecinde Nicel Veri Analizi. Ankara: Pegem Akademi Publishing.
  • Chong, H.C., Ramayah, T. & Subramaniam, C. (2018), The Relationship Between Critical Success Factors, Internal Control and Safety Performance in the Malaysian Manufacturing Sector. Safety Science, 104, 179–188.
  • Choudhury, F. & Mitchell, P. (2013). COSO in the Worlbank, Margaret E. Van Biene-Hershey, Leon A.M. Strous (Eds.), Integrity and Internal Control in Information Systems, in Strategic Views on the Need for Control, Amsterdam: Springer Science Business Media LLC.
  • COSO. The 2013 COSO Framework & SOX Compliance, June.
  • Dănescu, T., Prozan, M. & Dănescu, A.C. (2011). Internal Control Activities: Cause and Effect of a Good Governance of Accounting Reportings and Fiscal Declarations. Annales Universitatis Apulensis Series Oeconomica, 13(2), 339-349.
  • Daniela, P. & Atilla, T. (2013). Internal Audit Versus Internal Control and Coaching. Procedia Economics and Finance, 6, 694-702.
  • Davis, J.T., Ramamoorti,S. & Krull, G,W. (2017). Monitoring Internal Control Systems: A Case and Spreadsheet Based Pedagogical Approach. Educator Journal, 12(1), 59-68.
  • Ejoh, N. & Ejom, P. (2014). The Impact of Internal Control Activities on Financial Performance of Tertiary Institutions in Nigeria. Journal of Economics and Sustainable Development, 5(16),133-143.
  • Ekiz, D. (2015). Bilimsel Araştırma Yöntemleri. (4. Edition). Ankara: Anı Publishing.
  • Erkan, M., Okutmuş E. & Ergül A. (2017). The Internal Control System in the Prevention of Mistakes and Fraud: An Application in Hospitality Management. Kıymet Çalıyurt & Ülkü Yüksel (Eds.), in Sustainability and Management: An International Perspective, New York: Routledge.
  • Frazer, L. (2011). The Effect of Internal Control on the Operating Activities of Small Restaurants. Unpublished PhD Theses. Walden University College of Management and Technology, Minneapolis, USA.
  • Frazer, L. (2016). Internal Control: Is it a Benefit or Fad to Small Companies? A Literature Dependency Perspective. Journal of Accounting and Finance, 16(4),149-161.
  • Guilding, C. (2014). Accounting Essentials for Hospitality Managers. (Third Edition). New York: Routledge.
  • Juen, C.S. & Mustapha, M. (2015). An Assessment of Internal Controls in Budget Hotels in Malaysia, Proceedings of the International Conference on Natural Resources. Tourism and Services Management 2015, Sabah, Malaysia, 14-16 April.
  • Karagiorgos, T., Drogalas, G. & Giovanis, N. (2011). Evaluation of the Effectiveness of Internal Audit in Greek Hotel Business. International Journal of Economic Sciences and Applied Research, 4(1), 19-34.
  • Khosrowpour, M. (2001). Managing Information Technology in a Global Economy. London: Idea Group Publishing.
  • Kopotiienko, T. (2015). Internal Audit of the Operating Costs of Restaurant Enterprises. Herald Of Knute, 6, 127-136.
  • Kusluvan, S. (2003). Characteristics of Employment and Human Resource Management in the Tourism and Hospitality Industry, S. Kusluvan (Ed.). In Managing Employee Attitudes and Behaviors in the Tourism and Hospitality Industry, New York: Nova Science Publishers.
  • Kurniadi, L. & Zio, L. (2011). The Role of Internal Control in the Operation of Hotels, BUSP03 Degree Project, 15 ECTS Master Thesis in Accounting and Auditing, Lund, Sweden, 31 May.
  • Marley, S. & Pedersen, J. (2009). Accounting for Business: An Introduction. (Second Edition). Australia: Pearson Education.
  • Mihaela, D. & Mairan, T. (2013). Internal Control Organization in Accomodation Units. Lucrări Ştiinţifice Facultatea de Management Agricol, 1(4), 86-92.
  • Mndzebele, N. (2013). The Usage of Accounting Information Systems for Effective Internal Controls in the Hotels, International Journal of Advanced Computer Technology, 2(5), 1-3.
  • Moeller, R.R. (2013). Executive's Guide to COSO Internal Controls: Understanding and Implementing the New Framework. New Jersey: WILEY.
  • Monday, J.U., Inneh, G.E. & Ojo, V.O. (2014). Internal Controls and Operatıng Performance of Small Businesses in Lagos Metropolis, International Conference on Accounting. Finance and Management, 9(11), 237-256.
  • Newman, N. & McNeil, K. (1998). Conducting Survey Research in the Social Sciences. New York: University Press of America.
  • Owusu-Boateng, W., Amofa, R. & Owusu, I.O. (2017). The Internal Control Systems of GN Bank Ghana. British Journal of Economics, Management & Trade, 17(1), 1-17.
  • Peterson, A.N. (2018). Differences in Internal Control Weaknesses Among Varying Municipal Election Policies. Journal of Accounting and Public Policy, 37(3), 191-206.
  • Politis, Y., Litos, C., Grigoroudis, E. & Moustakis, V.S. (2009). A Business Excellence Model for the Hotel Sector: Implementation to High-Class Greek Hotels. Benchmarking: An International Journal, 16(4): 462-483.
  • Rae, K. & Subramaniam, N. (2008). Quality of Internal Control Procedures Antecedents and Moderating Effect on Organisational Justice and Employee Fraud. Managerial Auditing Journal, 23(2), 104-124.
  • Ravaş, B. (2011). The Role of the Internal Audit in the Tourism Unit’s Risk Management Process. Annals of the University of Petroşani. Economics, 11(1): 215-222.
  • Sanusia, Z.M., Joharib, R.J Saida, J. & Iskandara, T. (2015). The Effects of Internal Control System, Financial Management and Accountability of NPOs: The Perspective of Mosques in Malaysia. Procedia Economics and Finance, 28, 156-162.
  • Takahiro, S. & Jia, P. (2012), Comparison of Internal Control Systems in Japan and China. International Journal of Business Administration, 3(1), 66-75.
  • Trenerry, A. (1999). Principles of Internal Control. Hong Kong: UNSW Press.
  • Tuan Vu, H. (2016). The Research of Factors Affecting the Effectiveness of Internal Control Systems in Commercial Banks-Empirical Evidence in Viet Nam. International Business Research, 9(7), 144-153.
  • Turner, L. & Weickgenannt, A.B. (2008). Accounting Information Systems: Controls and Processes. New Jersey: Wiley.
  • Verschoor, C.C. (1999). Corporate Performance Is Closely Linked to a Strong Ethical Commitment, Business and Society Review, 104(4), 407-415.
  • Victor, D.I & Linda, E.N. (2016). Internal Control Techniques and Fraud Mitigation in Nigerian Banks. IOSR Journal of Economics and Finance, 7(5), 37-46.
  • Wahdan, M.A. (2018). Impact of a Practical Flowcharts Approach on Educating the Control Risk Assessment, Accounting and Finance Research, 7(2), 1-18.
  • Wardiwiyono, S. (2012). Internal Control System for Islamic Micro Financing: An Exploratory Study of Baitul Maal Wat Tamwil in the City of Yogyakarta Indonesia. International Journal of Islamic and Middle Eastern Finance and Management, 5(4), 340-352.
  • Yang, D.C. & Guan, L. (2004). The Evolution of IT Auditing and Internal Control Standards in Financial Statement Audits The case of the United States. Managerial Auditing Journal, 19(4), 544-555.
  • Yemer M. & Chekol F. (2017). The Effect of Internal Controls Systems on Hotels Revenue. A Case of Hotels in Bahir Dar and Gondar Cities. Arabian Journal of Business and Management Review, 6(6), 19-37.
  • Yurniwatia & Rizaldi, A. (2015). Control Environment Analysis at Government Internal Control System: Indonesia Case. Social and Behavioral Sciences, 211, 844-850.
Year 2020, , 227 - 241, 25.04.2020
https://doi.org/10.25287/ohuiibf.589519

Abstract

References

  • Abdullahi, M.H. & Muturi, W. (2016). Effect of Internal Control Systems on Financial Performance of Higher Education Institutions in Puntland, International Journal of Economics, Commerce and Management United Kingdom, IV(12), 762-780.
  • Abiola, I. & Oyewole, A.T. (2013). Internal Control System on Fraud Detection: Nigeria Experience, Journal of Accounting and Finance, 13(5),141-152.
  • Addey, J.N.A. (2012). An Assessment of Internal Control System on the Image of the Hospitality Industries in Royal Mac-Dic Hotel and Capital View Hotels. Unpublished Master’s Thesis. Kwame Nkrumah University of Science and Technology, Kumasi, Ghana.
  • Ademola, I.S., Adedoyin, A.O. & Alade, O.R. (2015). Effect of Internal Control System in Nigeria Public Sectors: A Case Study Of Nigeria National Petroleum Corporation, International Journal of Economics, Commerce and Management, III(6), 1093-1105.
  • Aktürk, A. (2015). Konaklama İşletmelerinde Etkin Bir İç Kontrol Sisteminin Tesisi Bağlamında Muhasebe Sistem Organizasyonu: Bir Vaka Analizi, Journal of Accounting, Finance and Auditing Studies, 1(4), 108-127.
  • Aldridge, R. & Colbert, J. (1994). Management's Report on Internal Control, and the Accountant's Response, Managerial Auditing Journal, 9(7), 21-28.
  • Altunışık, R., Çoşkun, R., Bayraktaroğlu, S. & Yıldırım, E. (2007). Sosyal Bilimlerde Araştırma Yöntemleri SPPS Uygulamalı. İstanbul: Sakarya Publishing.
  • Annaraud, K., Singh, D. & Lively, H. (2014). Assessing and Analyzing Internal Control Practices in the Lodging Industry. The Journal of Hospitality Financial Management, 22, 26-31.
  • Ayagre, P., Appiah-Gyamerah, I. & Nartey, J. (2014). The effectiveness of Internal Control Systems of Banks: The case of Ghanaian banks. International Journal of Accounting and Financial Reporting, 4(2), 377-389.
  • Aziz, M.A.A., Said, J. & Alam, M.M. (2015). Assessment of the Practices of Internal Control System in the Public Sectors of Malaysia. Asia-Pacific Management Accounting Journal, 10(1), 43-62.
  • Biegelman, M.T. & Bartow, J.T. (2006). Executive Roadmap to Fraud Prevention and Internal Control: Creating a Culture of Compliance. New Jersey: Wiley.
  • Can, A. (2013). SPPS ile Bilimsel Araştırma Sürecinde Nicel Veri Analizi. Ankara: Pegem Akademi Publishing.
  • Chong, H.C., Ramayah, T. & Subramaniam, C. (2018), The Relationship Between Critical Success Factors, Internal Control and Safety Performance in the Malaysian Manufacturing Sector. Safety Science, 104, 179–188.
  • Choudhury, F. & Mitchell, P. (2013). COSO in the Worlbank, Margaret E. Van Biene-Hershey, Leon A.M. Strous (Eds.), Integrity and Internal Control in Information Systems, in Strategic Views on the Need for Control, Amsterdam: Springer Science Business Media LLC.
  • COSO. The 2013 COSO Framework & SOX Compliance, June.
  • Dănescu, T., Prozan, M. & Dănescu, A.C. (2011). Internal Control Activities: Cause and Effect of a Good Governance of Accounting Reportings and Fiscal Declarations. Annales Universitatis Apulensis Series Oeconomica, 13(2), 339-349.
  • Daniela, P. & Atilla, T. (2013). Internal Audit Versus Internal Control and Coaching. Procedia Economics and Finance, 6, 694-702.
  • Davis, J.T., Ramamoorti,S. & Krull, G,W. (2017). Monitoring Internal Control Systems: A Case and Spreadsheet Based Pedagogical Approach. Educator Journal, 12(1), 59-68.
  • Ejoh, N. & Ejom, P. (2014). The Impact of Internal Control Activities on Financial Performance of Tertiary Institutions in Nigeria. Journal of Economics and Sustainable Development, 5(16),133-143.
  • Ekiz, D. (2015). Bilimsel Araştırma Yöntemleri. (4. Edition). Ankara: Anı Publishing.
  • Erkan, M., Okutmuş E. & Ergül A. (2017). The Internal Control System in the Prevention of Mistakes and Fraud: An Application in Hospitality Management. Kıymet Çalıyurt & Ülkü Yüksel (Eds.), in Sustainability and Management: An International Perspective, New York: Routledge.
  • Frazer, L. (2011). The Effect of Internal Control on the Operating Activities of Small Restaurants. Unpublished PhD Theses. Walden University College of Management and Technology, Minneapolis, USA.
  • Frazer, L. (2016). Internal Control: Is it a Benefit or Fad to Small Companies? A Literature Dependency Perspective. Journal of Accounting and Finance, 16(4),149-161.
  • Guilding, C. (2014). Accounting Essentials for Hospitality Managers. (Third Edition). New York: Routledge.
  • Juen, C.S. & Mustapha, M. (2015). An Assessment of Internal Controls in Budget Hotels in Malaysia, Proceedings of the International Conference on Natural Resources. Tourism and Services Management 2015, Sabah, Malaysia, 14-16 April.
  • Karagiorgos, T., Drogalas, G. & Giovanis, N. (2011). Evaluation of the Effectiveness of Internal Audit in Greek Hotel Business. International Journal of Economic Sciences and Applied Research, 4(1), 19-34.
  • Khosrowpour, M. (2001). Managing Information Technology in a Global Economy. London: Idea Group Publishing.
  • Kopotiienko, T. (2015). Internal Audit of the Operating Costs of Restaurant Enterprises. Herald Of Knute, 6, 127-136.
  • Kusluvan, S. (2003). Characteristics of Employment and Human Resource Management in the Tourism and Hospitality Industry, S. Kusluvan (Ed.). In Managing Employee Attitudes and Behaviors in the Tourism and Hospitality Industry, New York: Nova Science Publishers.
  • Kurniadi, L. & Zio, L. (2011). The Role of Internal Control in the Operation of Hotels, BUSP03 Degree Project, 15 ECTS Master Thesis in Accounting and Auditing, Lund, Sweden, 31 May.
  • Marley, S. & Pedersen, J. (2009). Accounting for Business: An Introduction. (Second Edition). Australia: Pearson Education.
  • Mihaela, D. & Mairan, T. (2013). Internal Control Organization in Accomodation Units. Lucrări Ştiinţifice Facultatea de Management Agricol, 1(4), 86-92.
  • Mndzebele, N. (2013). The Usage of Accounting Information Systems for Effective Internal Controls in the Hotels, International Journal of Advanced Computer Technology, 2(5), 1-3.
  • Moeller, R.R. (2013). Executive's Guide to COSO Internal Controls: Understanding and Implementing the New Framework. New Jersey: WILEY.
  • Monday, J.U., Inneh, G.E. & Ojo, V.O. (2014). Internal Controls and Operatıng Performance of Small Businesses in Lagos Metropolis, International Conference on Accounting. Finance and Management, 9(11), 237-256.
  • Newman, N. & McNeil, K. (1998). Conducting Survey Research in the Social Sciences. New York: University Press of America.
  • Owusu-Boateng, W., Amofa, R. & Owusu, I.O. (2017). The Internal Control Systems of GN Bank Ghana. British Journal of Economics, Management & Trade, 17(1), 1-17.
  • Peterson, A.N. (2018). Differences in Internal Control Weaknesses Among Varying Municipal Election Policies. Journal of Accounting and Public Policy, 37(3), 191-206.
  • Politis, Y., Litos, C., Grigoroudis, E. & Moustakis, V.S. (2009). A Business Excellence Model for the Hotel Sector: Implementation to High-Class Greek Hotels. Benchmarking: An International Journal, 16(4): 462-483.
  • Rae, K. & Subramaniam, N. (2008). Quality of Internal Control Procedures Antecedents and Moderating Effect on Organisational Justice and Employee Fraud. Managerial Auditing Journal, 23(2), 104-124.
  • Ravaş, B. (2011). The Role of the Internal Audit in the Tourism Unit’s Risk Management Process. Annals of the University of Petroşani. Economics, 11(1): 215-222.
  • Sanusia, Z.M., Joharib, R.J Saida, J. & Iskandara, T. (2015). The Effects of Internal Control System, Financial Management and Accountability of NPOs: The Perspective of Mosques in Malaysia. Procedia Economics and Finance, 28, 156-162.
  • Takahiro, S. & Jia, P. (2012), Comparison of Internal Control Systems in Japan and China. International Journal of Business Administration, 3(1), 66-75.
  • Trenerry, A. (1999). Principles of Internal Control. Hong Kong: UNSW Press.
  • Tuan Vu, H. (2016). The Research of Factors Affecting the Effectiveness of Internal Control Systems in Commercial Banks-Empirical Evidence in Viet Nam. International Business Research, 9(7), 144-153.
  • Turner, L. & Weickgenannt, A.B. (2008). Accounting Information Systems: Controls and Processes. New Jersey: Wiley.
  • Verschoor, C.C. (1999). Corporate Performance Is Closely Linked to a Strong Ethical Commitment, Business and Society Review, 104(4), 407-415.
  • Victor, D.I & Linda, E.N. (2016). Internal Control Techniques and Fraud Mitigation in Nigerian Banks. IOSR Journal of Economics and Finance, 7(5), 37-46.
  • Wahdan, M.A. (2018). Impact of a Practical Flowcharts Approach on Educating the Control Risk Assessment, Accounting and Finance Research, 7(2), 1-18.
  • Wardiwiyono, S. (2012). Internal Control System for Islamic Micro Financing: An Exploratory Study of Baitul Maal Wat Tamwil in the City of Yogyakarta Indonesia. International Journal of Islamic and Middle Eastern Finance and Management, 5(4), 340-352.
  • Yang, D.C. & Guan, L. (2004). The Evolution of IT Auditing and Internal Control Standards in Financial Statement Audits The case of the United States. Managerial Auditing Journal, 19(4), 544-555.
  • Yemer M. & Chekol F. (2017). The Effect of Internal Controls Systems on Hotels Revenue. A Case of Hotels in Bahir Dar and Gondar Cities. Arabian Journal of Business and Management Review, 6(6), 19-37.
  • Yurniwatia & Rizaldi, A. (2015). Control Environment Analysis at Government Internal Control System: Indonesia Case. Social and Behavioral Sciences, 211, 844-850.
There are 53 citations in total.

Details

Primary Language English
Journal Section Articles
Authors

Halil Akmeşe This is me 0000-0003-4694-2215

Hilal Gündoğan 0000-0001-5395-7912

Publication Date April 25, 2020
Submission Date July 9, 2019
Acceptance Date April 10, 2020
Published in Issue Year 2020

Cite

APA Akmeşe, H., & Gündoğan, H. (2020). The Role of Internal Control in Hotel Business: A Research on Five-Star. Ömer Halisdemir Üniversitesi İktisadi Ve İdari Bilimler Fakültesi Dergisi, 13(2), 227-241. https://doi.org/10.25287/ohuiibf.589519
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