Analysis strategy
Jusoh and Parnell (2008); Jokipii et al. (2009); Jokipii (2010); Oyedijo and Akewusola (2012); Kiptui (2014) | |
CLp1 | Businesses try to provide products and services that best suit the needs of customers. |
CLp2 | Businesses do their best to satisfy customer needs. |
CLp3 | The company's marketing is the best in the industry. |
CLp4 | The company's insurance products and services best suit customer needs. |
CLp5 | Learn more about your customers |
Defensive strategy | |
CLt1 | The company strives to provide insurance products and services at the lowest prices. |
CLt2 | The company's insurance products and services meet the needs of a small group of customers. |
CLt3 | Providing insurance products and services mainly aimed at clearly defined customer groups. |
CLt4 | Insurance products and services are priced lower than similar insurance products and services on the market. |
CLt5 | Improve the operational efficiency of insurance companies |
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- Organizational structure (CT) :
According to this study, organizational structure refers to a model of internal control in terms of roles, communication, authority and relationships. Chenhall (2003) noted that the structure of the organization remains an important factor in understanding the design of internal control. Structure is measured using organic and mechanistic structures (Gordon and Naryanan, 1984). In this study, organizational structure in the following aspects: formalization, vertical differentiation, degree of centralization are used to construct an organizational structure (Gupta et al., 1997; Gosselin, 1997; Pug et al., 1969). The degree of centralization in decision making (Gupta et al., 1997; Gosselin, 1997; Palmer et al., 2001; Chow et al., 1995). Centralization was measured using the same instrument with 11 standard items and identifying the organizational level at which decisions are made from line managers and the CEO (5-point scale). To measure vertical differentiation, the study used Gosselin's (1997) method, which measures the total hierarchy between the CEO and frontline supervisors. Formalization used Schminke et al.'s (2002) method, which measured formalization on a 5-point Likert scale with 5 statements about the extent to which rules, procedures, and policies are standardized. Or more recently, the study of
Jokipii (2010) found that measuring the above organizational aspects caused conflicts with the structure of internal control. The study inherited the scales of the authors Miller and Droge (1986); Gosselin (1997); Gupta et al. (1997); Schminke et al. (2002); Jokipii (2010). Respondents will answer at which level in your organization has the authority to make the following decisions with a 5-point Likert scale (from 1- Employee to 5- CEO).
Table 3.6: Scale of the variable “organizational structure”
Symbol
Content | Source | |
CT1 | Decide on the number of staff needed for the department | Miller and Droge (1986); Gosselin (1997); Gupta and (1997); Schminke et al. (2002); Jokipii (2010) |
CT2 | Decide whether to hire more staff | |
CT3 | Resolving internal labor disputes (salary, bonus, social benefits, working hours...) | |
CT4 | Department employee overtime decision | |
CT5 | Decide when to provide insurance services and the priority of insurance services | |
CT6 | Insurance Business Planning | |
CT7 | Departmental decision to dismiss employees | |
CT8 | Decide on the method used to select department personnel. | |
CT9 | Decide on the working methods used by the department. | |
CT10 | Decision on the use of departmental equipment | |
CT11 | Decide on work assignments for department staff |
- Perception of environmental uncertainty (CC) :
According to this study, the perception of environmental uncertainty of an organization is understood as an organization's inability to accurately predict the impacts of various sources of uncertainty such as: competition, production technology, customers and tastes, deregulation and globalization, government regulations and industrial relations (Hoque, 2001). Studies on the perception of environmental uncertainty of an organization on the management control system are mentioned in the studies of Khandwalla (1977), Hapman (1997), Hartmann (2000), Chenhall (2003). Studies on the perception of environmental uncertainty with internal control are found in the studies of Gordon et al. (1976); Evans et al. (1986). These research contents are found empirical evidence by Freel (2000), Jokipii (2010). Research
The study inherits the scale of the authors: Govindarajan (1984), Freel (2000), Hoque (2001), Jokipii (2010). Respondents will evaluate the business situation and are asked to indicate their perception of the ability to predict the uncertainty of the external environment according to a 5-level Liker scale (from 1- completely unpredictable to 5- completely predictable).
Table 3.7: Scale of the variable “perception of environmental uncertainty”
Symbol
Content | Inheritance source | |
CC1 | Actions of the insurance provider | Hoque (2001); Govindarajan (1984); Freel (2000); Jokipii (2010) |
CC2 | Customer needs and preferences for insurance services | |
CC3 | Deregulation and globalization | |
CC4 | Competitor actions | |
CC5 | Insurance business technology | |
CC6 | Government regulations and policies | |
CC7 | Economic environment | |
CC8 | Labor supply and demand relationship in the market |
- Organizational culture (VH):
According to this study, organizational culture is understood as the values, beliefs, methods of action... widely shared by members of the organization and allowing the creation of unique features of this organization compared to other organizations Bernard (1938), Selznick (1948), Silerman (1970). In the three typical research models on organizational culture of the authors Schein (1985) and Schein (1992), Denison (1980), Cameron and Quinn (2011). The topic has chosen the research model of Cameron and Quinn (2011), although basic but covers almost all the common characteristics of organizational culture in many different fields. Harrison and McKinnon (1999) reviewed 20 studies in the past 15 years, emphasizing that cultural characteristics are really necessary in the design of management control systems, theoretical research oriented for future research. In addition, there are other studies supporting the above relationship: (Chenhall, 2003), Chow et al. (1991), Fauri et al. (2008), Boon et al. (2008), Batool (2011). The study inherits the scale of authors Cameron and Quinn (2011), Deshpandé et al. (1993), Aliza (2005), Tran Thi Ai Cam (2019). Respondents will rate the level for aspects of organizational culture according to a 5-level Likert scale (from 1- Completely disagree to 5- Completely agree)
Table 3.8: Scale of the variable “organizational culture”
Symbol
Content | Source | |
Culture of cooperation | Cameron and Quinn (2006); Deshpandé et al. (1993); Aliza(2005); Tran Thi Ai Cam (2019) | |
VHh1 | The business is seen as a family, where everyone is willing to share together. | |
VHh2 | The business director is a guide, wise man or father figure. | |
VHh3 | The bond between all members in the business is loyalty and tradition, helping the business to develop. | |
VHh4 | The company emphasizes human resources, so engagement and ethical values are promoted. | |
Creative culture | ||
VHs1 | A business is a completely dynamic place. Every member there is ready to face and accept risks. | |
VHs2 | The business director is seen as an entrepreneur, an innovator and a risk taker. | |
VHs3 | The bond between all members of the business is a commitment to innovation and development together. | |
VHs4 | Businesses emphasize growth and finding new resources, so it is important to be ready to take on new challenges. | |
Hierarchical culture | ||
VHt1 | Business is a serious and strict place. Every member must have a high sense of compliance with procedures. | |
VHt2 | A business manager is seen as a coordinator, organizer or administrator. | |
VHt3 | The binding of all members in the business are the rules and policies, to maintain the smooth operation of the business. | |
VHt4 | Businesses emphasize sustainable stability, thus focusing on efficient operations. | |
Competitive culture | ||
Symbol
Content | Source | |
VHc1 | Business is performance-oriented, so the main concern is the work being done, not the person doing it. | |
VHc2 | Business managers are seen as manufacturers and technical experts. | |
VHc3 | The engagement of all members in the business is emphasized on the completion of tasks and goals. | |
VHc4 | Businesses emphasize competition and performance, so measuring goals is important. |
- Information technology (IT):
The use of IT often brings potential benefits in terms of effectiveness and efficiency to an entity’s internal control (Alles et al., 2002; Vasarhelyi and Halper, 2018). IT enables an entity to process large volumes of data consistently and enhances the entity’s ability to monitor the implementation of control activities and achieve operational efficiency by implementing security controls in applications, databases, and operating systems (AICPA, 2006). Chen et al. (2014) found that IT has an impact on business risk, with high IT capabilities signaling reduced business risk associated with the use of IT. Furthermore, IT capabilities have a pervasive impact on both the structure of internal control and the effectiveness of internal control. In addition, there are studies supporting the relationship between IT and internal control structure such as: IT has a multi-dimensional pervasive impact on the control environment, risk assessment and monitoring (Klamm and Watson (2009). Internal control is most effective when it is "built-in" into the infrastructure and business processes of the entire enterprise (COSO 1992, 2013), Morris (2011). The study inherits the scales of the authors: Gibson (1994), Bharadwaj (1999, 2000), Ross et al. (1996), Wade and Hulland (2004), Klamm and Watson (2009), Amudo and Inanga (2009), Morris (2011), Chen et al. (2014), Susanto (2018). At the same time, refer to state documents related to the application of IT in the insurance sector: Official Letter No. 640/QD-BHXH; Decision No. 556/QD-BTC dated March 24, 2016. Respondents will rate the level of information technology aspects according to a 5-level Likert scale (from 1- Completely inadequate to 5- Completely adequate).
Table 3.9: Scale of the variable “information technology”
Symbol
Content | Inheritance source | |
IT1 | Businesses use software to manage and control all insurance business activities. | Gibson (1994); Chen et al. (2014); Klamm and Watson (2009); Morris (2011); Bharadwaj (1999, 2000); Wade and Hulland (2004); Ross et al. (1996); Amudo and Inanga (2009); CV 640/QD-BHXH; Decree 556/QD-BTC; Susanto (2018) |
IT2 | The enterprise has a centralized database and can integrate and synchronize data for the entire insurance business operation process. | |
IT3 | The software system of an insurance company can calculate, analyze, provide complete, timely, accurate information, and early warning of risks to serve the management of the company and the requirements of state management agencies. | |
IT4 | Businesses have online sales and customer care software. | |
IT5 | Ensure data and information security in storage and insurance business transactions | |
IT6 | The fit between team capabilities and IT systems | |
IT7 | IT equipment meets the specific characteristics of the insurance sector. |
- Control environment (MT)
According to this study, the control environment is a set of standards, processes, and structures that form the basis for the design and operation of internal control in an organization (COSO, 2013). The control environment constitutes culture, affects the organization's consciousness, and is the foundation of internal control components (Millichamp, 2002; Ramos, 2004; Amudo and Inanga, 2009; Ofori, 2011; Dougles, 2011). In that sense, the study inherits the scales of the authors Amudo and Inanga (2009), Ofori (2011), Dougles (2011), Tuan Vu (2016), Hung and Tuan (2019). Accordingly, respondents are asked to evaluate their assessment of the control environment of DNBHPNT according to a 5-level Likert scale.
Table 3.10: Scale of the variable “control environment”
Symbol
Content | Source | |
MT1 | Management philosophy and operating style of insurance manager | D'Aquyla (1998); Millichamp (2002); Ramos (2004); Rae et al. Subramaniam (2006); Subramaniam et al. (2006); |
MT2 | Integrity and ethical values of management and employees |
Symbol
Content | Source | |
MT3 | Commitment to the capacity of the Board of Directors and employees | DiNapoli; (2007); Kaplan (2008); Amudo and Inanga (2009); Ofori (2011); Sultana and Haque (2011); Ho Tuan Vu (2016); Hung and Tuan (2019); Anh et al. (2020) |
MT4 | Organizational structure in insurance companies | |
MT5 | Human resource policies in insurance companies |
- Risk Assessment (RR):
According to this study, risk assessment is the process of identifying and analyzing risks that affect the achievement of objectives, thereby being able to manage risks (COSO, 2013). Walker (1999) believes that in order to prevent risks, managers need to have a risk management system to respond to changes that occur. Thus, risk assessment helps the unit establish and implement risk assessment measures that will have a positive impact on the effectiveness of internal control. The study inherits the scales of the authors Walker (1999), Amudo and Inanga (2009), Sultana et al. (2011), Karagiorgos et al. (2011), COSO (2013), Ho Tuan Vu (2016), Hung and Tuan (2019), Anh et al. (2020). Respondents assessed the level of risk assessment at DNBHPNT on a 5-level Likert scale.
Table 3.11: Scale of the variable “risk assessment”
Symbol
Content | Source | |
RR1 | Identify the objectives of insurance | Amudo and Inanga (2002); Heald (2003); Walker (1999); Karagiorgos et al. (2011); Sultana and Haque (2011); COSO (2013); Ho Tuan Vu (2016); Hung and Tuan (2019); Anh and colleagues (2020) |
RR2 | Identify risks that may impact insurance | |
RR3 | Analysis of risks in insurance | |
RR4 | Assessing risks in insurance | |
RR5 | Risk Management in Insurance |
- Control operation (HD):
According to this study, control activities are a set of policies and procedures to ensure the implementation of management directives to minimize risks that threaten the achievement of the unit's objectives (COSO, 2013). Control activities occur at all levels and functions of the unit (Walker, 1999). Any organization performs the authorization, division of responsibilities, control of activities and resources (Amudo and Inanga, 2009). In that direction, if control activities are highly effective, it increases effectiveness.
KSNB. The study inherits the scale of the authors Walker (1999), Amudo and Inanga (2009), Sultana et al. (2011), Karagiorgos et al. (2011), COSO (2013), Ho Tuan Vu (2016), Hung and Tuan (2019), Anh et al. (2020). Respondents will evaluate the level of control activities at DNBHPNT according to a 5-level Likert scale.
Table 3.12: Scale of the variable “control activities”
Symbol
Content | Source | |
HD1 | Senior management review of operations | Amudo and Inanga (2002); Ramos (2004); Hevesi (2005); Jenkinson (2008); Kaplan (2008); Sultana et al. Haque (2011); COSO (2013); Ho Tuan Vu (2016); Hung and Tuan (2019); Anh and colleagues (2020) |
HD2 | Middle management review of operations | |
HD3 | Reasonable division of responsibilities among functions in insurance | |
HD4 | Controlling information processing in insurance | |
HD5 | Physical control in insurance |
- Information and communication (TT) :
According to this study, information is essential for the implementation of control responsibilities in the unit to support the achievement of the set goals. Communication is the process of providing, sharing and exchanging information (COSO, 2013). Studies by scholars Hevesi (2005), Douglas (2011), Gamage and Low Lock (2014) suggest that a well-designed information and communication system has a positive impact on the effectiveness of internal control in the unit. The study inherits the scales of authors Hevesi (2005), Amudo and Inanga (2009), Douglas (2011), Gamage and Low Lock (2014), Ho Tuan Vu (2016), Nguyen (2018), Hung and Tuan (2019), Anh et al. (2020). Respondents will evaluate the level of information and communication of DNBHPNT on a 5-level Likert scale.
Table 3.13: Scale of the variable “information and communication”
Symbol
Content | Source | |
TT1 | Information provided is accurate | Amudo and Inanga (2002); DiNapoli, (2007); Hevesi ( 2005), Douglas (2011), COSO (2013); Gamage and Low Lock (2014); Ho Tuan Vu (2016); Nguyen (2018); Hung and Tuan (2019); Anh and colleagues (2020) |
TT2 | Information provided appropriately | |
TT3 | Information provided promptly | |
TT4 | Information is constantly updated | |
TT5 | Internal communication work | |
TT6 | External communication work |