E-ISSN : 2963-4946

Vol. 2 No. March 06, 2024 https://ajosh.org/

The Important Role of Internal Control in Accounting

Information Systems
Salomi Jacomina Hehanussa
Universitas Kristen Indonesia Maluku, Indonesia
E-mail: salomijh@gmail.com

*Correspondence: salomijh@gmail.com
KEYWORDS ABSTRACT
Important role, This study discusses the critical role of internal control in
Accounting Information Accounting Information Systems. This writing aims to
System, Internal Control. provide an overview or explanation with a literature study
approach on the critical role of internal control in accounting
information systems. In addition, the writing of this paper
aims to provide knowledge of whether the use of computer-
based accounting information systems can guarantee a
company's success without supervision from the company's
business people. The author discovers six crucial roles of the
Internal Control System. The first is to have a significant
influence on computer-based Accounting Information
Systems. Internal Control Systems can prevent excessive
resources in the company, Create accountability of financial
statements, and increase the credibility and quality of the
company; then, its management makes it easy to make
decisions and prevent fraud. Accountant information
computer-based systems cannot run properly without
management control.
Attribution- ShareAlike 4.0 International (CC BY-SA 4.0)

Introduction
Information technology is developing very rapidly. Most people now obtain various
conveniences in retrieving data and information (Muhasim, 2017). Data can be generated
in real time and adjusted to the user's or user's request. This also happens in accounting
information systems (Fauzi et al., 2023). Various computer-based accounting information
system applications are commonly used in companies or small, medium, and large-scale
business units. Various applications are very helpful in implementing transactions in each
company, such as purchasing, production, warehouse, sales, and others (Setiawan, 2018).
The need for up-to-date information in all fields or departments in the company is
essential for managers to take strategic steps to improve company performance or
increase profits.
Strategic steps in improving company performance are needed to survive and
compete with other companies (Fu’ad, 2015). On the other hand, according to Krismiaji,

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Salomi Jacomina Hehanussa

the development of the latest accounting information system has several threats as
follows:
1. Natural disasters and political disasters
2. Software error, hardware damage
3. Unprovoked acts;
4. Intentional actions
Companies must be able to overcome the above threats with various methods. One
way is by implementing an internal control system. The internal control system is
expected to provide the best solution to the abovementioned threats (Lestari & Amri,
2020).
The importance of internal control will be discussed in this paper.
When a company has misinformation from one part or department, it can result in
errors in decision-making (Mulyani et al., 2019). In addition, when one or part of the
employees have a monopoly on a certain part, it can lead to fraud problems. Employees
not implementing standard operating procedures (SOPs) in a company will also cause
problems (Agustina, 2021). The influence of the environment or non-technical activities
of the company, such as the community around the company, electricity resources, water,
and so on, will affect the company's performance. Companies that have used sophisticated
accounting information system applications are also inseparable from weaknesses
(Sutriyani et al., 2024). Using sophisticated accounting information systems will not
guarantee the company's success without internal supervision or control from business
people or entrepreneurs (Mulyani, 2017).
According to Krismiaji, various threats to accounting information systems focus
more on computer control. This is an important issue for managers because of several
things, including:
1. The number of users or clients increases so that all employees can access data and
computers are everywhere
2. The existence of a LAN (Local Area Network) network that distributes data anywhere
without control
3. WAN (Wide Area Network) network provides convenience for consumers and
suppliers to access data quickly. Data confidentiality needs to be considered in this
matter.
These threats continue evolving and potentially damaging or destroying the
Accounting Information System. Therefore, protection is needed for the accounting
information system, which is called the internal control system. The internal control
system is the responsibility of the management of an organisation. Management
responsibilities include its creation and maintenance. The internal control system must be
created adequately, meaning it must match the needs of the organisation that uses it.
Organisations not equipped with adequate internal controls lead to reduced trust of
interested parties. Management is responsible for providing reliable information to
shareholders, investors, creditors, and all parties interested in the organisation it leads.

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The Important Role of Internal Control in Accounting Information Systems

The internal control system is essential because many management do not always fulfil
their responsibilities correctly.
Almost all organisations have used computers in their data processing. Using
computers facilitates and speeds up almost all aspects of work in the organisation.
However, the use of computers is considered more vulnerable to threats. Computer data
can be misused by irresponsible parties, such as stolen, deleted, or damaged for specific
purposes (Adawiyah & Atrinawati, 2020).
So, control of computer-based information systems is also significant. There are
separate ways that can be used to secure it. Computer control in a company can sometimes
cause problems when changes in the application system must be updated to adjust to
market conditions. A company's Information Technology (IT) department must be able
to provide configuration management and administrative control to other management,
users, suppliers, and the IT department itself (Gantini et al., 2019).
Some examples of possible changes include:
1. Management may want to introduce new facilities to help with running the business,
such as online diaries or electronic notice boards
2. Users are dissatisfied with the visual appearance of the application
3. Supplier (supplier) will provide repairs and upgrades at management's request
4. The IT department will also check the infrastructure of the computer, network, or
software.
The internal control system is an integral part of the accounting information system.
Without the support of an adequate internal control system, accounting information
systems will not be able to produce reliable information for decision-making. The internal
control system applied to the accounting information system is handy to prevent and
guard against unwanted things. The internal control system can also be used to check
errors that occur so that they can be corrected.
The internal control system includes organisational structures, methods, and
measures that are coordinated to maintain organisational wealth, check the accuracy and
reliability of accounting data, encourage efficiency, and encourage compliance with
policies. In a narrow sense, internal supervision checks horizontal addition (cross footing)
and decreasing addition (footing). In a broad sense, internal supervision includes
checking work and all the tools management uses to conduct supervision. Internal
supervision includes the organisational structure and all coordinated ways and tools used
within the company to maintain the security of company assets, check the accuracy and
correctness of accounting data, promote efficiency in operations, and assist in compliance
with established management policies.

Research Methods
The research method used in this study is a literature review (Library Research).
The data collection technique used is a literature study, which is data collection carried
out by reviewing reference books in the library. The data type used is in the form of books

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Salomi Jacomina Hehanussa

related to the discussion. Data analysis uses a descriptive method, which describes the
research results and then draws conclusions.

Results and Discussions

Internal control systems are closely related to accounting information systems.
These two things are inseparable and complementary to achieving the company's
organisational goals.
Accounting Information System (SIA)
According to Mulyadi, the accounting information system is a form, record, and
coordination report providing the financial information needed to facilitate company
management. Meanwhile, according to Bodnar and William, accounting information
systems are collections of resources, such as people and equipment, arranged to convert
data into information. Hall (2011) states that SIA consists of three subsystems, namely:
1. Transaction processing system;
2. General ledger/financial reporting system;
3. Management reporting system.
When viewed from the definition above, the Accounting Information System (SIA)
can be run manually and computerised. Small business units can use a simple and manual
information system, but medium to upper companies have used computerised SIA. Ease
of use and application in company operations is undoubtedly an option for management,
who prefer computer-based SIA applications. In addition, the demands of technological
competition from other companies are increasing in company management. However,
there are several risks to the application of computer-based SIA, namely:
a. Weak data security Data is sometimes only stored on CDs (compact discs) or flash
disks that are susceptible to viruses and quickly damaged from the hardware side.
b. Repeated errors At the time of data recording and an error occurs, the data is re-
recorded, and sometimes, this happens repeatedly, which will cause the data to be less
valid.
c. Illegal computer use by employees
Some corporate data processing computers can connect to the internet network.
Furthermore, some employees use the computer for browsing, so automatically, the
computer is more easily attacked by viruses, malware, and other interference from
cyberspace.
According to Gondodiyoto, the application of computerisation at SIA caused six
changes in the system. The changes are as follows:
a. Changes to the organisational structure;
b. Changes to data storage;
c. Changes in routine processing of large data volumes;
d. Changes in internal control;
e. Changes in accounting traceability.
Large companies will create new sections or departments when the SIA
computerised system is implemented. For example, a particular department, namely the
computer department, began to be formed by companies filled with competent employees
and experts in Information Technology (IT). The department contains a database of all
departments that can be used as a single database or still separate in each department.
Changes in data storage are made in manual methods in the form of journals or ledgers,
while in computer systems, they are in the form of files that can be read through specific
applications. The computerised system will carry out faster, more precise, consistent, and

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The Important Role of Internal Control in Accounting Information Systems

more continuous processes. Another change is a more complicated control system with
accounting controls that can be tracked or traced (audit trail).
Accounting Information Systems (SIAs) are limited to information involving
monetary data on financial statements. The financial statements produced by SIA must
also have quality criteria, which describe and present the company's condition so that
when used as a basis for decision-making, they will produce right-on-target decisions.
The quality criteria of financial statements are that they are easy to understand, timely,
have predictive value, can be compared, objective, precise, and complete.
In a computer-based SIA, there are three data information processes, namely data
input, data processing, and output data. The input data can come from data recording by
the user, or it can be automatically logged in from another application. Computers
processing data can be servers, clients, or both (client-server). Output data is generated
on the display screen or printer, and files are sent on a flash disk or compact disc.
Internal Control and Its Important Role in Accounting Information Systems
Krismiaji states that control influences or directs an activity, object, organisation,
or system. In SIA, one of the objectives is to assist management in directing or controlling
the business organisation. The American Institute of Certified Public Accountants
(AICPA) defines the Internal Control System (SPI) as an organisational structure, all
coordinated methods and provisions adopted by companies to protect assets, check
thoroughness, and check how reliable accounting data is, improve business efficiency and
encourage adherence to established company policies.
The Committee of Sponsoring Organizations of the Treadway Commissions
(COSO) in Widjadja defines internal control as a process carried out by the board of
commissioners, management, and other personnel designed to provide adequate
assurance about the achievement of three main groups of objectives, namely effectiveness
and efficiency of operations, reliability of financial reporting and compliance with
applicable laws. The Internal Control System (SPI) consists of various policies and
procedures set by the company to achieve the following general objectives:
1. Maintain company assets;
2. Ensure the reliability and accuracy of accounting information;
3. Encourage the company's operational efficiency;
4. Measure the conformity of policies and procedures set by management.
Safeguarding Company Assets
Company assets must be safeguarded by all parties, all employees in general and
especially the management or company owners who play the most role in safeguarding
these assets or assets. Some activities or events seek to attack the company and may try
to destroy the company's assets. These things can be incompetent employees in their
fields, wrong actions, hacker attacks, or virus attacks on company databases that damage
data programs in the company.
Ensuring the Reliability and Accuracy of Accounting Information
The initial data entered in certain parts must be reliable and accurate. The program
or application in this section must be able to provide validation or initial checking of
incoming data. For example, an application can reject incoming data when there is an
error in writing a certain amount, word, or code so that the data from the beginning is
valid and can be continued to the next section.
Driving the Company's Operational Efficiency
When a company management can implement a sound internal control system, the
company's operations will be more efficient. When data or things that violate procedures

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Salomi Jacomina Hehanussa

are found from the beginning, the system will reject and eliminate the data. Implementing
the company's accounting information system is not only absolute in using applications
or programs, but human resources (HR) experts in their fields are also very influential.
Sophisticated application support and controlled by skilled human resources will produce
extraordinary output for company operations.
Measuring the Conformity of Policies and Procedures Set by Management
The management establishes procedures for the company's operations. The
procedure will be seen for implementation and supervised by internal and external control
or supervision parties. The supervisory party can be mentioned as an auditor. The auditor
will examine and act as a consultant to the company's management by maintaining its
independence. This SPI mechanism can measure existing policies by applicable
procedures and standards. Some of the general objectives of SPI above can also be
interpreted as the role of implementing SPI for companies. This is because the above
goals can be achieved due to the role of SPI itself. Suppose the management does not pay
attention to controlling physical assets, for example. In that case, various risks, especially
financial ones, will not be comprehensive, leading to the company's financial
accountability.
In addition, companies must also put the right people in the right places to ensure
an effective information system. Employees who are honest, competent, and have
integrity are the dream of managers so they can sleep well. Peter Drucker expresses in Iin
(2008) that the individual is the centre and the most valuable resource in our environment.
The purpose of making control or control, in general, is actually to avoid mistakes and try
as effectively as possible to eliminate uncertainty so that the company continues to move
forward. Control includes several responsibilities: approval, performance evaluation, task
distribution, account reconciliation, verification, etc. This activity must be introduced to
all company lines, from top management to the bottom.
SPI plays a role in the smooth process of SIA in a company. As the author
mentioned above, SPI and SIA are inseparable parts. Managing SPI is also a success in
SIA, and organisational goals will be achieved. It is based on literature studies in journals,
articles, and books that the author has done.
The first research by Zhang et al. was a study of internal control on computer-based
accounting information systems. Zhang et al. said special internal control studies are
needed to develop computer-based accounting information systems. This study is due to
dramatic and rapid changes in information systems, so companies must implement high
internal control.
The second research was conducted by Salim, who examined the application of
accounting information systems to support internal lending control at PT Bank Bukopin
Manado. Salim found that the bank under study had implemented an internal control
system with several stages: coaching, rescue (settlement) in the form of take, and
liquidation in the form of execution and auction.
The following research was conducted by Muskanan, who examined the
effectiveness of the internal control system in fiscal decentralisation applications. This
study also mentioned terrible results in the control environment of the research object.
The poor results were due to the lack of commitment of officials in performing their
duties. The lack of commitment is caused by conflicts of interest in their fellow men.
In another study, it was stated that internal control for companies for computer-
based accounting information systems is for the costs incurred for losses that occur if

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The Important Role of Internal Control in Accounting Information Systems

essential data on the computer is lost, misuse by unauthorised people, and if the Alviana
virus attacks the computer.
Research by Teketel and Zelalem states that Small and Medium Enterprises (SMEs)
in Sweden know the importance of implementing an Internal Control System. The main
characteristics of effective internal control for SMEs are the presumptive control
environment, presumptive risk assessment process, presumptive operational control
activities, effective communication and information systems, and effective monitoring
and evaluation systems.
Based on the results of research and existing literature studies, the author can state
that there are several important roles of the Internal Control System (SPI) in the
Accounting Information System (SIA) as follows:
1. Have a significant influence on SIA, especially computer-based. The enormous
influence here concerns general control, such as database control, program
maintenance, and computer building. In addition, application control is software
(software) used for operational applications and security (antivirus).
2. SPI can prevent excessive resources in the company. Resources, both labour and raw
materials, can be saved when a company strictly supervises. An integrated and easy-
to-use application will save on the number of employees. Work that was previously
done manually and required many employees, after the application is available, the
number of employees can be less.
3. Realizing financial statement accountability: A reliable validation report on SPI can
produce quality company financial statements, making it easy for auditors to provide
excellent or fair opinions without exception.
4. Improve the credibility and quality of the company in the public. According to experts
in their fields, Companies that can implement reliable SPI and human resources will
quickly get a good response in the stock exchange market or the public, making it
easier to get investors.
5. Facilitate management in decision-making. Management leaders will find it easier to
make strategic decisions for the company when the Internal Control System has run
smoothly from the lowest management level to top management. Furthermore,
shareholders will also feel calm and can have the opportunity to add investment to the
company.
6. Prevent fraud. According to Hall, fraud refers to the misrepresentation of a fact made
by one party to another party to lie and make the other party believe the fact even
though it harms it. In other words, fraud is cheating. Internal control that carries out
five main components, namely the control environment, risk assessment, information
and communication, supervision, and control activities, can prevent fraud.

Conclusion
The need for a modern accounting information system for companies is increasing
rapidly, and various ease of data access in running company operations can be obtained
by all employees or partially. On the other hand, the company must prepare a reliable
Internal Control System to deal with all existing threats and risks. This SPI plays a vital
role in companies' implementation of SIA. This is proven in several studies and literature
in this paper. The author concludes that applying a modern computer-based accounting
information system will not run smoothly without a reliable internal control system, such
as strict supervision by management experts in their fields who are honest and have
integrity.

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