The effect of internal control system’s effectiveness on village government’s performance

• Uskara, A.M, Mulyani, Sri, Akbar, Bahrullah, Mulyani, Sri Padjadjaran University. Bandung, Indonesia
• . Sudraja University of Lampung. Lampung, Indonesia

Palabras clave: Internal, control system, fraud, performance

Resumen

The present study aims to proof the effect(s) of the internal
control system’s effectiveness on village government’s performance,
measured through levels of fraudulent activities in village fund
management. Data was analyzed using Structural Equation Model
(SEM)-LISREL method. The result shows that the lower the internal
control effectiveness is, the higher level of fraudulent activities in
village fund management are; which may lead to low performance of
village government. In conclusion, an effective internal control system
plays a crucial role in reducing frauds in village fund management.