International Journal of Research and Innovation in Social Science (IJRISS) | Volume V, Issue VI, June 2021 | ISSN 2454–6186

Internal Control and Accountability of Credit Cooperatives

Jessa Q. Beloy, CPA, CTT, MSA
The University of Mindanao

Abstract – This study aims to guide not only credit cooperatives but all financial institutions in improving accountability by establishing and implementing an effective and well-organized system of internal control. This study determined which domain of internal control best influenced the accountability of credit cooperatives in Panabo City. It applied the quantitative, non-experimental research design utilizing correlational technique, with 108 employees of credit cooperatives as the respondents selected through total population sampling. The researcher adapted and modified questionnaires to measure internal control and accountability. The Mean, Pearson r, and Regression Analysis were used as statistical treatments. Results revealed that the level of internal control of credit cooperatives was very high across all indicators. Similarly, the study revealed a very high level of accountability among credit cooperatives as perceived by the employees. Based on the findings of the study, it showed that internal control is significantly correlated to the accountability of credit cooperatives, with a p-value less than the level of significance. The overall result disclosed that internal control has significant influence on the accountability of credit cooperatives. Control activities was the domain of internal control that best predicts accountability of credit cooperatives.

Keywords – internal control, accountability, credit cooperative

I.INTRODUCTION

Incidences of fraud and misconduct through the years have raised the awareness and demand for accountability from all types of organizations (Morehead, 2007). In 2008, the failure of the Lehman Brothers was the largest case of bankruptcy in United States history which shifted toward the accountability of management for not disclosing various transactions (Azadinamin, 2013). Nowadays, in cooperatives, problems and challenges on accountability arise when the management, acting as agents, may be involved in activities that have conflicting interest with the principal or its members (Mohamad, Othman, & Mohamed, 2013). In Bangladesh, existence of numerous problems such as administrative failure, poor decisions and high occurrence of corruption can be traced to the absence of an effective system of accountability (Huque, 2011). Also, in Zimbabwe, it was found out that lack of accountability resulted from unethical behaviors of the management causing serious negative implications (Zvavahera & Ndoda, 2014).