Strengthening Financial Performance: The Role of Internal Control Systems in Micro and Small Enterprises
Strengthening Financial Performance: The Role of Internal Control Systems in Micro and Small Enterprises
Justine Rose Taguinod
Cagayan Valley Computer and Information Technology College
Publication Information
Journal Title: International Journal of Research and Innovation in Social Science (IJRISS)
Author(s): Taguinod, Justine Rose
Published On: 05/27/2025
Volume: 9
Issue: 2
First Page: 3138
Last Page: 3142
ISSN: 2454-6186
Cite this Article Taguinod, Justine Rose.; Strengthening Financial Performance: The Role of Internal Control Systems in Micro and Small Enterprises, Volume 9 Issue 2, International Journal of Research and Innovation in Social Science (IJRISS), 3138-3142, Published on 05/27/2025, Available at https://rsisinternational.org/journals/ijriss/articles/strengthening-financial-performance-the-role-of-internal-control-systems-in-micro-and-small-enterprises/
Abstract
Internal control is a key tool for addressing management challenges, improving organizational efficiency and effectiveness, preventing misconduct, and integrating management functions. To ensure its effectiveness, the internal control system must remain sufficient. Therefore, this study aimed to assess the internal control system and financial performance of service-based businesses in Santiago City, Philippines, focusing on the control environment, risk assessment, control activities, information and communication system, and monitoring. Using a simple random sample, 90 business owners were surveyed. The study adopted a quantitative approach with a descriptive correlation and comparative design to highlight significant differences. The data was collected through a structured questionnaire distributed via Google Forms and face-to-face surveys. Reliability and validity tests were also performed on the questionnaire. The results revealed that business owners assessed their internal control and financial performance, with significant differences observed in risk management based on business years and total net income but no significant differences based on other demographic factors,
Keywords: Internal Control System, Risk Management, Service-based Business, Financial Performance