Journal of Business and entrepreneurial
October - December Vol. 7 - 4 - 2023
http://journalbusinesses.com/index.php/revista
e-ISSN: 2576-0971
journalbusinessentrepreneurial@gmail.com
Receipt: 09 November 2022
Approval: 11 March 2023
Page 73-116
Internal control and accounting processes of the
salt production companies in the Salinas canton.
Control interno y procesos contables de las Empresas
Productoras de Sal del cantón Salinas
Balbuca Tomala Evelyn Gabriela
*
Pazmiño Enriquez Jose Ernesto Pazmiño Enríquez
*
ABSTRACT
Internal control is a measurement tool that allows
optimizing the use of resources and making the right
decisions based on reliable information on
accounting management, through various strategic
actions to reduce risks in the organization and
strengthen business sustainability. The purpose of
this article is to determine how internal control
affects the accounting processes of salt production
companies in the Salinas canton, through the analysis
of each of the components of internal control; in this
sense to achieve the planned objective, a qualitative
research was conducted, in which a documentary
and descriptive analysis was used, applying the
techniques of surveys to employees and senior
management team to salt production companies in
the Salinas canton, where several parameters were
determined for better analysis. The results obtained
show that in the analyzed companies there is a
deficient internal control due to the lack of
knowledge of the importance of its application, in
*
Bachelor's degree in Business Administration from Santa
Elena Peninsula State University, Master's degree in
Accounting and Auditing from Santa Elena Peninsula State
University, currently head of Human Resources at Famovisal,
Empresa Mar y Sal. ORCID 0000-0002-8758-8438
*
PHD in Education, Master in Business Administration,
Economist and Certified Public Accountant, specialist in the
fields of Auditing, risk analyst and internal control design;
Undergraduate and Postgraduate Teacher; Master's and
Undergraduate Thesis Tutor; Writer of scientific articles.
ORCID 0000-0002-3052-2139
e-ISSN: 2576-0971. October - December Vol. 7 - 4 - 2023 . http://journalbusinesses.com/index.php/revista
96
addition to the fact that being family companies,
decision making is based on experience or personal
criteria, and not on a process of analysis in relation
to the accounting information.
Keywords: internal control, business management,
accounting management, business sustainability,
decision making.
RESUMEN
El control interno es instrumento de medición que
permite optimizar el uso de recursos, y realizar la
toma de decisiones correctas, basada en información
confiable sobre la gestión contable, mediante
distintas acciones estratégicas para disminuir los
riesgos existentes en la organización y fortalecer la
perdurabilidad empresarial. La finalidad de este
artículo es determinar de qué manera incide el
control interno en los procesos contables de las
empresas productoras de sal del cantón Salinas, a
través del análisis de cada uno de los componentes
del control interno; en este sentido para alcanzar el
objetivo planeado se realizó una investigación de tipo
cualitativa, en la que se empleó un análisis
documental y descriptivo, aplicando las técnicas de
encuestas dirigidas a los colaboradores y al equipo de
la alta gerencia a la empresas de producción de sal
del cantón Salinas, en donde se determinaron varios
parámetros para un mejor análisis. Los resultados
alcanzados evidencian que en las empresas analizadas
existe un deficiente control interno por el
desconocimiento de la importancia de su aplicación,
además que al ser empresas familiares la toma de
decisiones se basa en la experiencia o criterios
personales, y no en un proceso de análisis en relación
a la información contable.
Palabras clave: control interno, gestión
empresarial, gestión contable, perdurabilidad
empresarial, toma de decisiones.
e-ISSN: 2576-0971. October - December Vol. 7 - 4 - 2023 . http://journalbusinesses.com/index.php/revista
97
INTRODUCTION
Modernization, globalization of the economy and competition in the organizational
environment have contributed to generate the need to design, approve and implement
various internal control procedures in order to strengthen organizational performance,
this being one of the main purposes of business management. According to Beltran &
Murcia, (2016) the only way to face the new business environment is with a vision
towards the future, where organizations demonstrate responsiveness and adaptability
to change, which is why it is essential that companies are competitive, where they
demonstrate flexibility in production and speed to market.
In modern administrative management it is necessary to properly understand the
importance of an internal control system, considered as a key factor, through the
efficient and effective use of resources, in order to reduce business risks and economic
losses due to various causes such as: deviations and waste, fraud, among others. (Calle,
Nárvaez, & Erazo, 2020).. It is considered that all companies should have an adequate
internal control, because it strengthens the administrative and accounting management.
(Calle, Nárvaez, & Erazo, 2020)..
In today's economy there is an accelerated growth, due to globalization, committing
businesses to implement technological and computer systems and procedures for the
registration and treatment of their commercial operations, demanding a greater control
in the activities executed by the companies. In the business sector, companies are
characterized by executing internal procedures aimed at satisfying the needs of their
customers and meeting market demand; however, due to the number of departments
involved, it is difficult to carry out an adequate control, causing economic losses.
Globally, internal control focuses on internal procedures that must be aligned with the
strategic planning of business management; these activities must contribute to
safeguarding assets and generating reliable information for correct decision making and,
in turn, adopting new actions for the policies determined. Therefore, it is important for
companies to have an adequate internal control system that allows them to have
reasonable financial information, organizations are usually structural, in which there are
segregations of functions in the execution of various activities in terms of accounting
record operations; therefore, to achieve the effectiveness of each one, an internal
control should be immersed.
According to López & Cañizares, (2018) in the business world there have been countless
facts of corruption that have sounded alarms about the level of scope of crimes such as
tax and financial fraud, which has made internal controls essential for organizations, thus
e-ISSN: 2576-0971. October - December Vol. 7 - 4 - 2023 . http://journalbusinesses.com/index.php/revista
98
regulating the presentation of financial statements with the aim of safeguarding assets,
thus minimizing the commission of fraud and generating confidence in the users of the
organization; the purpose of this study is the literature review for the understanding of
the definitions of internal controls in its application. The implementation of internal
control and financial management are related in a very direct way, because the former
contributes to the efficiency and effectiveness of operations in the financial management
system. (Calle, Nárvaez, & Erazo, 2020)..
Internal controls are processes directed to the company's business operations, with the
purpose of providing reasonable security to the organization's objectives, these
procedures allow to work efficiently and that the financial reports are made based on
the company's internal rules and policies. To understand the importance of the
application of internal controls it is necessary to understand that the objective of the
same is: to protect all the resources of the organization, to avoid possible losses, crimes
such as fraud and deviations of funds that could affect the fulfillment of the business
objectives.
According to Vega & Nives, (2016) with the absence of internal controls in the
organization there is a high probability that actions that may harm the company are
generated, and that it is not prepared to respond to them, in which crimes such as fraud
and misappropriation of assets can be evidenced; which leads to non-compliance with
legal regulations, and that liabilities are generated for the institution, thus affecting the
reputation and trust of the organization before its users. In some companies there is a
myth that internal controls should not be applied because of the size of the company,
or because they are family businesses; however, these are not factors that should be
evaluated in order to implement IC, because it strengthens decision making and resource
optimization, achieving adequate financial and administrative management that will
improve the organization's productivity levels.
According to Buyatti & Ramón, (2001) internal control is an indispensable tool in the
operational, administrative and financial activities of an organization; it allows to reduce
the risk in the activities that are executed at all levels of command carried out by the
personnel, through the correct decision making to achieve the business objectives.
Therefore, a proper implementation will strengthen the planning and execution
processes of internal procedures.
On the other hand, according to Vergara, Guamán, & Mogollón, (2021) internal control
establishes methods and procedures that allow safeguarding assets and keeping
accounting records correctly, in addition to developing activities based on the strategic
e-ISSN: 2576-0971. October - December Vol. 7 - 4 - 2023 . http://journalbusinesses.com/index.php/revista
99
direction of the organization, through compliance with the laws and regulations
applicable to the principles of effectiveness and efficiency in operations.
According to Fonseca, (2011) the objectives of internal control should be related to the
mission and vision of the organization, in order to achieve efficiency in its operations,
through timely financial information, through compliance with the policies and
regulations governing the institution; they should be oriented in actions and measures
for a correct accounting record, allowing the reliability of the information under policies
determined by the company. On the other hand, according to Leiva, (2015) considers
that the objectives of internal control are focused on: establishing procedures and
actions to safeguard the assets and property of the institution; as well as providing
correct financial and accounting information, which contributes to the determination of
policies and standards that help achieve business goals and objectives.
Herrera, (2015), determines that internal control is an organizational plan created and
adopted under the particularities of each company, which includes processes, and
techniques for operational and accounting areas; with the objective that the
administrative area has: an update of the financial situation, verify compliance with goals,
supervise the functions by areas, seek productive efficiency and effectiveness of its
functions within the company.
While Argandoña, (2012) indicates that the internal control process evidences the
planning and organization of the companies, where the record of the actions and
procedures executed in each area will allow a constant evaluation of the operational
effectiveness; the objective of the administrative control is to comply with the company's
goals and the correct use of internal policies.
According to Langrod, (2010) as a result of the administrative control through the
company's information systems, the internal accounting control instrument is generated,
with the following purposes:
• Transactions must be recorded in the respective accounting period.
• The accounting records must be made with the actual values in the relevant
accounts.
• All assets recorded and accounted for must have physical existence.
• Operations must be based on general and specific authorizations.
Internal accounting control allows the company to have timely access to financial
information, which must be transparent, comprehensible and assessable according to
e-ISSN: 2576-0971. October - December Vol. 7 - 4 - 2023 . http://journalbusinesses.com/index.php/revista
100
the standards of any control institution , in order to achieve the principles of efficiency
and effectiveness, and thus make better decision making.
According to Controller General of the State (2018), an internal control system is
composed of actions, plans, policies, policies, standards, records, procedures and
methodology executed by managers over the areas of the company and its personnel,
including the environment and attitudes of the authorities with the purpose of minimizing
all possibilities of risk in public institutions. The application of internal control systems
allows the following benefits:
• Minimize possible acts of corruption.
• Achieve the goals and objectives set.
• Strengthen the development of the organization.
• Comply with the principles of transparency, effectiveness and efficiency.
• Execute actions applying the regulatory framework.
• To protect the state's assets and resources, promoting their best use.
• To have correct and reliable information for decision making.
• Strengthen the entrepreneurial culture.
Comply with the principle of transparency of information based on the mission and
business objectives that allow the correct use of the determined resources.
According to López & Cañizares, (2018) the correct application of an internal control
will depend on two phases: planning, and constitution: The first must respond to the
commitment of the institution's top management authorities, while the constitution
depends on a committee that responsibly conducts the conduction of the system.
It also includes the actions carried out to diagnose the situation of internal control
determined by the institution, compared to the system proposed by the Comptroller
General's Office, in order to create a plan to comply with the regulations, guaranteeing
the correct functioning of the institution.
According to Chacón, (2022) The COSO I Integrated Framework is based on five
components, which are: control environment, risk assessment, control activities,
information and monitoring, which through their joint application will contribute to
internal control compliance.
e-ISSN: 2576-0971. October - December Vol. 7 - 4 - 2023 . http://journalbusinesses.com/index.php/revista
101
The board of directors and senior management will give a high level of positioning to
internal control in the organization and provide standards, behaviors and expectations
about the control environment at each level of the company, these standards will be
applied to the processes and structures, which serve as the basis for the success of
internal control. The control environment guides the management of the organization
through the establishment of regulations, policies, in each of the activities of the
company.
Therefore, there is an influence on the organization's employees for there to be
adequate control; in companies the control environment is reflected by the behavior
and execution of the responsibilities assigned to its collaborators; therefore, internal
control and the other components will serve as instruments for risk assessment and to
obtain relevant information during the process of executing the organization's activities.
Risk assessment identifies the risks of an organization, through a dynamic process that
evaluates the fulfillment of organizational objectives, establishing tolerance limits for risks
so that they do not significantly affect the development of business activities. The
objective of the risk assessment is to limit the risk in the organization, the
implementation of this component allows that the activities and information system are
not vulnerable to possible risks, by identifying weaknesses at all levels of the organization,
the reports resulting from the risk assessment will detect in time the risks, errors and
frauds that threaten the achievement of the objectives of the organization.
Control activities are based on the actions determined by means of procedures that
make it possible to meet the objectives, thus reducing risks; they are made up of specific
policies and procedures and will be the mechanisms for meeting objectives, preventing
and mitigating risks. Control activities are actions defined by the companies that execute
administrative processes; they must contribute to the procedures and policies through
control elements and activities that contribute to the achievement of the objectives and
the mitigation of risks that affect them.
The monitoring and communication component is carried out during the course of
administrative and supervisory activities and its objective is to ensure compliance with
the obligations to be performed by the personnel. The objective is to provide security
to the internal controls that the company executes without this monitoring process
leaving aside the other components, the monitoring is focused on the evaluation,
supervision, registration and inspection of each of the activities that are executed at each
level of the organization.
e-ISSN: 2576-0971. October - December Vol. 7 - 4 - 2023 . http://journalbusinesses.com/index.php/revista
102
Supervision or also called monitoring and supervision should be applied to the entire
internal control process, which will ensure the quality and success of the same, in this
component is performed in order that the internal control system is flexible and
adaptable to the circumstances and the main objective is to know if the other
components of COSO are performing adequately and contributing to the structure, for
this should be considered as follows:
• Monitoring activities should be carried out during the ordinary course of the
company's operations.
• Conduct separate evaluations
• Conditions should be reported
• Role assumed by each member of the entity at the different levels of control
It is important to establish mechanisms that help detect any weaknesses that are affecting
the internal control system in order to make the right decisions, since both systems and
mechanisms eventually fail or are unsuccessful due to different changing circumstances.
For Langrod, (2010) internal control is an audit process carried out by the managers and
employees of a company, with the purpose of ensuring that the actions taken contribute
to the fulfillment of the objectives; through the correct and timely execution of the
policies, principles and techniques that the management has established to achieve the
criteria of efficiency and effectiveness within its operations; it pursues the operational,
informative and process compliance objectives.
Financial information is a tool that allows sustainable decision making based on the
available resources of the institutions, as well as on labor, tax and legal activities. For this
reason, bank reconciliation must be reliable, so that economic agents can make sound
decisions, (Otzen & Manterola, 2017).. Adequate procedures must be generated so that
operational records are made in a timely manner, because financial matters are of
administrative interest, hence the importance of complying with business rules and
procedures.
According to Serrano, Señalin, Vega, & Herrera, (2017) accounting management is a
model that contemplates the information channels and the correct relationship between
costs - benefits, which must achieve the purposes of compatibility with other financial
records, control and flexibility; it allows to keep track of business transactions, it is used
as support in decision making in different areas, which should also help to develop
accounting management. On the other hand, for Buyatti & Ramón, (2001) accounting
management refers to the execution of a set of actions that allow the application of the
e-ISSN: 2576-0971. October - December Vol. 7 - 4 - 2023 . http://journalbusinesses.com/index.php/revista
103
rules and policies of an organization, for decision making oriented to the fulfillment of
stated objectives.
According to Catágora, (2013) accounting management is the technique by which the
operations carried out are recorded, classified and summarized, as well as the economic,
natural and other identifiable and quantifiable events that affect the entity, thus helping
to make correct decisions. The purpose of accounting management is to obtain
information on the company's assets and its results; they provide data of great interest
to managers, employees, and also to external users such as shareholders, management,
banks and suppliers. Therefore, accounting is a discipline based on the elaboration,
coordination and structuring in books and records of the operations that modify the
structure of such assets.
Alvarado, (2012) indicates that accounting is a business tool that allows identifying,
measuring, classifying, recording, interpreting, analyzing, evaluating and reporting the
history of the operations of an economic entity, in a clear, complete and reliable manner,
representing all monetary transactions of a company, with the objective of assisting the
economic decisions of the company. Consequently, accounting management is
considered a fundamental part of any company, since it is responsible for recording and
classifying all actions that represent income or expenses in the form of financial
summaries that provide relevant information to the company's managers, who, with a
good communication channel, will know how to make the right decisions for business
development.
According to Estupiñán, (2006) accounting allows to have an absolute knowledge and
control of the company to make decisions with precision, facilitating the elaboration of
financial assumptions. On the other hand, Mendoza, (2022) indicates that it is a science
that requires clear and precise order of activities, resources, expenses, money, it is vital
to manage in the best possible way the economic activities of a company, regardless of
its size or type of activity. For Murillo, Narvaéz, & Erazo, (2019) all accounting process
of an organization comprises the recording of transactions derived from the economic
facts applied in an accounting period; from each period the financial statements are
obtained as a summary of the movements made according to the economic facts, where
the financial, real information of the company is identified.
According to Reyes, (2012) accounting records are transactions that generate a change
in the assets, liabilities or equity of the company that are related to the financial issue,
they are represented quantitatively in money; that is, they are the registration of
transactions in the books. Therefore, it refers to the real actions, transformed as physical
records, listed in a journal, whose purpose is to prepare financial information of the
e-ISSN: 2576-0971. October - December Vol. 7 - 4 - 2023 . http://journalbusinesses.com/index.php/revista
104
company, on which the managers will rely to perform functions and make decisions; they
must have the following data: date, the accounts involved, the amount and a description.
According to Larsen, (2004) Accounting standards are determined to standardize the
preparation of financial statements, which can be used by different types of users of an
organization. The objectives are: to determine special treatments for specific
operations, to facilitate the access of users to financial statements, to generalize
accounting knowledge.
On the other hand, accounting principles establish models and formats with which
financial and operational records must be prepared, as well as determine the form of
presentation and purposes of financial analysis within the accounting management. Under
these parameters, the Generally Accepted Accounting Principles (GAAP) have been
established, which are the framework of specific and general regulations used to measure
the equity and its elements that comprise it, these GAAP allow that the same accounting
record may have a different treatment depending on the type of business and its purpose.
According to Mantilla, (2008) Management accounting allows the collection of the
necessary information for internal decision making in business management, it is used by
the company's managers as a tool to know the results of the different areas, both
inventory control, planning and control. It is in constant changes and updates that go
hand in hand with organizational development, because it responds to the needs of the
business environment in order to provide information that benefits the achievement of
the objectives.
As the organization becomes larger, its operational complexity increases; therefore, it is
essential to use management accounting, since operational control is indispensable in
each of the phases of the administrative process. However, the updating of management
accounting systems has not been in line with current business needs, since the creation
of these systems was directed to scenarios outside the current one, in which the
following limitations are evident: short-term operational orientation, excessive level of
data aggregation, hierarchical company structures, cost control and solutions to simple
problems. (López & Cañizares, 2018)..
According to Langrod, (2010) for accounting information systems it is necessary to have
information and communication technologies (ICT's), because these mechanical and
updated tools allow the entry of accounting information more accurately, without bias
and eliminates the possibility of error. These systems ensure the integrity of the
information and allow decision making based on the financial records.
e-ISSN: 2576-0971. October - December Vol. 7 - 4 - 2023 . http://journalbusinesses.com/index.php/revista
105
One of the advantages offered by accounting information systems is the comparability
because it allows the analysis of past and present data with the company's data and even
with those of other companies. On the other hand, it facilitates data entry and
accessibility of data digitally, whether on websites, phone applications, as well as in public
and private databases with real-time analysis.
According to Poch, (2000) decision making is the action of preferring one thing, option,
or benefit among others. For this reason, the information obtained from accounting
management is important because it helps managers to make decisions about the
company. On the other hand, Pungitore, (2010) indicates that the decision making
process is a continuous process, in which strategic actions influence organizational
performance and have an impact on business sustainability. The assertive decision must
be chosen considering the current reality in which the company's problem develops, so
that it can provide specific solutions that minimize the critical factors identified.
When companies are small or medium-sized, decision making becomes more complex,
because the analysis is based on the criteria of managers, without evaluating financial and
accounting information, due to the fact that, being a microenterprise, the company does
not have an adequate accounting management, which allows it to solve its problems
(Mendoza Zamora , García Ponce , Delgado Chávez, & Barrero Cedeño, 2018).
According to Vergara, Guamán, & Mogollón, (2021) there are six phases for correct
decision making;
1.- To carry out a diagnosis that allows to know the situation of the company.
2.- Identify the causes of the situation or problem determined.
3.- Make projections in relation to expected costs and benefits.
4.- Choose the most viable option based on the alternatives determined.
5.- Execute the chosen option.
6.- Evaluate the results of the decision.
Strategic decision making is essential for the development of an organization, it allows
optimizing the use of resources and minimizing the shortcomings that may arise as part
of the administrative process. According to Mantilla, (2008) the types of decisions can
e-ISSN: 2576-0971. October - December Vol. 7 - 4 - 2023 . http://journalbusinesses.com/index.php/revista
106
be: strategic, where their goals are long term, administrative which are short term,
current decisions that are executed immediately, structured decisions that are applied
in some specific phase; and unstructured decisions that are applied without knowing
their possible results.
MATERIALS AND METHODS
This research was developed in the Salinas canton, with the purpose of evaluating
internal control and its impact on the accounting management of salt production
companies; therefore, it is considered necessary to establish an internal control model
that allows the efficient and effective use of resources, in order to reduce business risks
and economic losses for various reasons, and thus strengthen business sustainability.
To develop the research, the descriptive approach was used to learn about the subject
of study through the theoretical disaggregation of the variables of study, in addition to
conducting a situational analysis of the internal control used by the production
companies of the Salinas canton, in order to identify the critical factors, and thus raise
the proposal.
The study also used analytical research to identify the critical factors in the accounting
management of salt production companies in the Salinas canton; therefore, an analysis
of the results obtained in the information gathering was carried out in order to
determine the internal control model that will allow reducing business risks. On the
other hand, a correlational research was used, through the use of surveys to determine
the level of management of the five components of COSO in a general way and its impact
on the accounting management of salt production companies in Salinas county, analyzing
the following dimensions: control environment, risk assessment, control activities,
information and communication, and supervision.
To obtain the results of this study, the inductive method was used in order to learn
about the object of study, to design internal control actions to strengthen accounting
management, through direct observation and interviews with managers of salt producing
companies in the Salinas canton.
On the other hand, the deductive method was used to identify the critical factors
associated with accounting management in order to design an internal control model to
reduce business risks. Surveys were made to the personnel involved in the processes
and to the managers of the salt producing companies of the Salinas canton that are
directly involved in the internal control and financial management systems. This
e-ISSN: 2576-0971. October - December Vol. 7 - 4 - 2023 . http://journalbusinesses.com/index.php/revista
107
instrument was designed with 4 identification questions and 11 research questions
related to the internal control components, as a diagnostic tool.
The present study considered a population of 6 salt producing companies in the Salinas
canton, with a total of 152 workers; therefore, it was considered necessary to carry out
a population census, and not a sample, in order to identify the critical factors associated
with internal control and its impact on accounting management with the purpose of
designing a management model to reduce business risks and economic losses.
The following is a breakdown of the number of employees of the companies analyzed in
the study:
Table 1 Salt producing companies in the canton of Salinas
Company
Trademark
Number of employees
Famosal
Sea and Salt
18
Molina Famovisal Group
Salt and Guayaquil
Sea and Salt
22
Hermosal
Sea and Salt
8
Ecuasal
Pacific Salt
75
Salfipil S.A
Sal Blanc
12
Judge S.A.
Pacific Salt
17
Total employees
152
The study was non-experimental, this design "is performed without deliberate
manipulation of variables and in which only the phenomena are observed in their natural
environment and then analyzed" (Hernández et al., 2010, p. 149), the two study variables
were analyzed; on the one hand, i) the sensory aspect of the packaging design of the
chocolates through its factors (material, shape, color, and elements), and on the other
hand, ii) the organoleptic quality of the chocolates was determined through the sensory
quality index and the level of satisfaction of tastes and preferences.
RESULTS
Internal control, being an organizational plan where the appropriate procedures are
designed according to the business line, has the purpose of safeguarding the
organization's assets and monitoring the accuracy of accounting operations, thus
e-ISSN: 2576-0971. October - December Vol. 7 - 4 - 2023 . http://journalbusinesses.com/index.php/revista
108
contributing to efficiency and effectiveness, which in turn contributes to the company's
productivity.
In the research conducted, it was determined that the critical business factors that
strengthen the internal control environment are: control standards, assignment of
functions, and organizational structure; due to the fact that the measurement criteria of
the different departmental areas contribute to the reduction of business risks and
prevent economic losses. Therefore, the need to establish actions to improve the
operation and functionality of the organization.
Illustration 1 Internal control environment factors
In the surveys conducted, it was determined that 52% of the personnel involved in
accounting management and internal control processes of the salt producing companies
in the Salinas canton use control standards within the activities, processes and actions
they implement, while 27% consider the correct assignment of functions as a key factor
for organizational performance; finally, 21% of the companies consider that the
organizational structure is the key element for developing a control system that allows
strengthening the company's sustainability.
It is necessary to implement internal control activities, because it allows the prevention
of errors and irregularities that may arise in the company, becoming an important tool,
because its application positively affects organizational development, as well as reducing
business risks. According to the surveys conducted, it was determined that 37% of the
personnel involved in accounting management and internal control processes of the salt
producing companies in the Salinas canton consider it important to establish accounting
policies as a fundamental element to strengthen control activities, while 35% consider it
44%
32%
24%
Normas de control
Asignación de funciones y
responsabilidades
Establecer una estructura organizativa
e-ISSN: 2576-0971. October - December Vol. 7 - 4 - 2023 . http://journalbusinesses.com/index.php/revista
109
indispensable to determine risk evaluation processes that allow improving organizational
performance, and 28% state that it is indispensable to have accounting procedures
manuals in order to achieve the efficient use of business resources.
Illustration 2I Key elements for strengthening control activities
It is important to remember that the internal control system is operated by people who
are vulnerable to committing some act of corruption, thus leading to the commission of
illicit acts, from managers to the lowest level collaborators in a small organization,
because they are directly or indirectly involved in activities related to accounting and
control management, Therefore, it is essential to determine adequate accounting policies
to meet organizational objectives, as well as procedure manuals to regulate activities,
and to establish risk assessment processes to strengthen the critical factors associated
with business effectiveness.
The guarantees of implementing an adequate internal control system contribute to the
fulfillment of the company's objectives through the correct execution of policies and
standards, as well as providing accounting and financial information for decision making
in an assertive manner, thus contributing to the proper performance of activities within
the framework of legality before the control agencies.
According to the results obtained, it was determined that 41% of the personnel involved
in accounting management and internal control processes of the salt producing
companies in the Salinas canton consider it important to develop internal accounting
control activities to reduce business risks through the fulfillment of operational and
financial objectives that allow strengthening business sustainability, While 37% indicate
that it is necessary to achieve operational efficiency and effectiveness to continuously
improve organizational performance, and 22% indicate that it is essential to provide
reasonable security to the activities of the accounting process in order to reduce
37%
28%
35%
Políticas contables
Manual de procedimientos contables
Procesos de evaluación de riesgos
e-ISSN: 2576-0971. October - December Vol. 7 - 4 - 2023 . http://journalbusinesses.com/index.php/revista
110
business risks and economic losses due to processes that do not comply with policies,
standards and control activities.
Illustration 3 Importance of internal accounting control activities
The salt production companies in Salinas canton must have qualified personnel to help
meet the objectives of the institution and also be committed to properly implement the
internal control system, because the employees must monitor and evaluate compliance
with it, because the effectiveness will depend on the commitment of staff, the company's
ability to implement, and the establishment of strategic actions aimed at the internal
control model designed.
3.4 Control reports as a key tool for strengthening accounting management
The continuous review of accounting transactions is essential to achieve adequate
internal control, since it contributes to appropriate decision making, with the objective
of protecting assets and providing reliable and timely financial information to the
institution's users. In the present study it was determined that 32% of the personnel
involved in accounting management and internal control processes of the salt producing
companies in the Salinas canton consider that control reports facilitate the compliance
of accounting operations, thus allowing to reduce the business risk, On the other hand,
24% state that it allows the evaluation of management results in order to optimize the
use of resources. Finally, 17% think that it is not necessary to periodically prepare
control reports due to their business structure.
37%
22%
41%
Proporcionar seguridad razonable a
las actividades del procreso contable
Alcanzar eficiencia y eficacia
operativa
Cumplir los objetivos operacionales y
financieros
e-ISSN: 2576-0971. October - December Vol. 7 - 4 - 2023 . http://journalbusinesses.com/index.php/revista
111
Illustration 4 Control reports
Having an updated control system allows salt production companies in the Salinas canton
to control the key departmental areas of the business through adequate decision making,
facilitating internal and external audits. On the other hand, it contributes to business
competitiveness, mitigating the risks of financial information fraud, contributing positively
to the control agencies.
3.5 Internal control management model for salt production companies in the Salinas
canton
The proposed model MSCIS - 2023, is a metamodel that has the name by its acronym
identified as: model of sustainable internal control system for salt producing companies
in the Salinas canton, developed in the year 2023, aims to strengthen the accounting
management, and organizational performance. The determined model is designed in
relation to the criteria determined in the research, thus allowing to improve the critical
factors that affect the accounting management. The current research proposal is based
on the design of internal accounting control, based on eight factors, used as an
instrument for the management area, who will verify and evaluate the accounting
transactions, with the objective of ensuring in a reliable and transparent manner the
achievement of the financial, operational and regulatory goals of the company. The main
objective of this proposal is that the salt production companies in the Salinas canton
correctly record and validate accounting information, achieving the presentation of real
and transparent economic results, for which it is necessary to apply the following topics:
strategic planning, organizational structure, control standards, analysis of COSO
components, accounting policies, internal control manual, enterprise risk assessment
systems, and control reports.
A correct application of the Accounting Management System will allow salt production
companies in the Salinas canton to link the actions carried out with the fulfillment of
32%
27%
24%
17%
Facilita el control del
cumplimiento de las
operaciones contables
Contribuye a la toma de
decisiones
Permiten evaluar los
resultados de la gestión
e-ISSN: 2576-0971. October - December Vol. 7 - 4 - 2023 . http://journalbusinesses.com/index.php/revista
112
objectives resulting from unmet needs. The objectives set out, trace the actions and
request the necessary information to preserve the business assets, also provide
parameters for the presentation of financial information that improves the operation of
the company.
Illustration 5 Sustainable Internal Control System Model (MSCIS - 2023)
One of the factors that will guarantee that the internal control system in the salt
production companies in the Salinas canton is the self-commitment of the owners and
directors of the company, only in this way will credibility be obtained in the management
of funds and in the way of recording their operations. The lack of internal control in
these companies is detrimental to the accountability system, since there will be financial
statements that do not reflect the activities actually carried out.
CONCLUSIONS
Due to the bibliographic review that contextualizes this research, it is known that those
companies that have applied internal control systems are less likely to fall into fraud and
that many of them have eliminated it; however, it is of vital importance that the salt
producing companies of the Salinas canton use a sustainable internal control model that
allows them to reduce business risks and economic losses.
With the results obtained, it is determined that the companies dedicated to the
production of Sal that have decided to introduce internal controls in their companies
e-ISSN: 2576-0971. October - December Vol. 7 - 4 - 2023 . http://journalbusinesses.com/index.php/revista
113
and execute them effectively, achieve a higher financial performance; unlike the
companies that have not done so, on the contrary, they reflect an inefficient control
system, because they do not establish risk evaluation systems, nor do they correctly
determine manuals, procedures and policies that help to constantly improve the
company.
The management systems that the companies incorporate must contain a feedback
program for all the areas involved. The most important point in this program is ongoing
training, since, being a new internal control system, most people are unaware of the
regulations and the processes that must be implemented, which can lead to a disorder
of uncontrolled activities. Training should be updated on accounting regulations, policies
and procedures to broaden the knowledge and skills of employees when applying
accounting practices and control levels.
Having a good internal control is essential, since it will provide real accounting records
and reliable financial reports, which will enrich the decision making action of the
management in front of the company's partners and shareholders, control institutions
and others. Therefore, it becomes important for managers to know their internal
control system, since it allows the company to reduce possible negative externalities and
even create its operations by knowing its particularities.
The internal control, allows to increase the security of the accounting systems of the
company, where the administrative, accounting and financial operations that achieve
business goals are established; it also identifies anomalies, faults and seeks a viable
solution considering the hierarchical levels of the company, methods and accounting
systems so that the product delivered by the auditor is truthful. Because an internal
control system is adequate for a company, it provides security in the efficiency and
effectiveness of operations, in the information, and in the legislative and regulatory
compliance of institutional operations, being considered as the best execution of
external control.
REFERENCES
Acara Chamba , L., Córdova Montaya , A., Vega Granda, A., & Sánchez Quezada, I. T.
(2021). Evolution in banana exports and impact of economic development, El
Oro province 2011-2020, prepandemic, pandemic; applying time series. Polo del
Conocimiento. doi:10.23857/pc.v6i8.
Alvarado, J. (2012). The internal control of a commercial company. Guatemala. Prentice Hall.
Argandoña, M. (2012). Internal Control and Risk Management in Public Management. Lima.
Marketing Consultores S.A.
e-ISSN: 2576-0971. October - December Vol. 7 - 4 - 2023 . http://journalbusinesses.com/index.php/revista
114
Beltrán , C., & Murcia, J. (2016). METHODS FOR HAZARD IDENTIFICATION,
ANALYSIS, EVALUATION AND TREATMENT OF RISKS IN COLOMBIA.
Ingenieria, Matemáticas y Ciencias de la información.
doi:10.2107/ricmi.2016.v3.n6.a12.
Brever, C. A. (2011). Politics, State and Public Administration..Caracas, Venezuela . Editorial
Ateneo .
Buyatti , & Ramón, J. G. (2001). Internal control in private companies. Quipukamayoc.
Calle, G., Narváez, C., & Erazo, J. (2020). Internal control system as a tool for optimizing
the financial processes of the company Austroseguridad Cia. Ltda. Scientific journal
Dominio de las ciencias .
Calle, G., Nárvaez, C., & Erazo, J. (2020). Internal control system as a tool for the
optimization of the financial processes of the company Austroseguridad Cía.
Ltda.
Carrasco (2011). Research called Study on the Implementation of Process Based Management
in Banco de Estado. Santiago de Chile .
Catágora , F. (2013). Accounting systems and procedures. Cáracas, Venezuela , Venezuela :
Editorial McGraw Hill.
Chacón , W. (2002). Internal control as a fundamental accounting and controlling tool for
organizations.
Charry-Rodríguez, J. (2013). El control inerno y los principios de evaluación de gestión en las
entidades del estado. Bogotá, Colombia : Editorial Asociación colombiana de
administradores .
Chiavenato, I. (2004). Introduction to the General Theory of Management. McGraw-
Hill/Interamericana, editors.
Economic and business science (n.d.). Retrieved from
http://dx.doi.org/10.23857/dc.v6i1.1155
Estrada , M. (2010). Internal control system. Lima, Peru: Editorial Publicidad & Matiz.
Estupiñán , G. R. (2006). Internal control and fraud based on transactional cycles: analysis of
COSO I and II report (Second ed. ed.).
Fonseca , L. O. (2011). Internal control system.
Fulldocs, & Charry, J. A. (2013). El Control Interno en Diez Módulos en Entidades y
Organismos del Estado. Medellín, Colombia: Editorial Diké.
Gómez , M. (2010). Internal control in the procurement areas of public companies in Andalusia.
Guerra, M. (2015). What is Administrative Management, Origin, Evolution, Precursors and
Principles. Quito, Ecuador.
Guerrero, A. (2008). The Theory of Public Administration. Mexico: Editorial Harla Mexico.
Herrera, R. (2015). Control Failure in the Public Sector. Mexico.
Koontz, H., & Heinz, W. (2009). Management, a global perspective. Mexico: McGraw-Hill.
Langrod, G. (2010). A treatise on management science.
e-ISSN: 2576-0971. October - December Vol. 7 - 4 - 2023 . http://journalbusinesses.com/index.php/revista
115
Larsen , J. (2004). Principles of auditing . Mexico: Editorial Diana.
Leiva, D. (2015). Internal conceptual framework. Retrieved from
http://www.minam.gob.pe/comite/wpcontent/
Leonard , W. (2001). Evaluation of methods and administrative efficiency . Mexico: Editorial
Diana .
López , A., & Cañizares, M. (2018). Internal control in the Ecuadorian public sector. Case
study: decentralized canonical autonomous governments of Morona Santiago .
Cofín Habana. Retrieved from http://scielo.sld.cu/pdf/cofin/v12n2/cofin04218.pdf
Mallar, M. (2010). Management by processes: an approach. "Vision of the Future."
Retrieved from https://www.redalyc.org/pdf/3579/357935475004.pdf Mantilla B.,
S. A.
Mancilla , M. (2010). Control in management for reliable financial information.
Accounting and business . Retrieved from
https://www.redalyc.org/pdf/2816/281621753005.pdf
Mantilla, S. A. (2008). Internal control of new financial instruments . Bogota, Colombia :
Editorial Ecoe .
Martillo, L. (2008). Internal control of financial instruments . Bogota, Colombia : Editorial
Ecoe .
Mejía, G. B. (2006). Process management for internal control. Bogotá, Colombia: Editorial
Ecoe.
Mendoza , L. (2022). The internal control system and its impact on the management of
construction companies in the city of Pilas, year 2021. Multidisciplinary Journal Latin
Science.
Mendoza Zamora , W., García Ponce , T., Delgado Chávez, M., & Barrero Cedeño, I.
(2018). Internal control and its influence on administrative management in the
public sector . Science domain . Retrieved from
http://dx.doi.org/10.23857/dom.cien.pocaip.2018.vol.4.n.4.206-240
Murillo, L., Narvaéz, C., & Erazo, J. (2019). Internal control system with focus on ISO
9001:2015 in Monterrey banana company. KOINONIA Interdisciplinary Refereed
Journal.
Otzen, T., & Manterola, C. (2017). Sampling techniques on a population under study. Int.
J. Morphol. Retrieved from http://dx.doi.org/10.4067/S0717-
95022017000100037
Pelayo, M., Joya, R., Velázquez, J., & Lepe, B. (2019). Internal control monitoring in
Mexican microenterprises. Management Challenges . Retrieved from
http://scielo.sld.cu/pdf/rdir/v13n1/2306-9155-rdir-13-01-1.pdf
Poch, R. (2000). Manual de Control Interno. Editorial Gestión 2000.
Pungitore, J. L. (2010). Administrative systems and internal control. Barcelona, Spain:
Editorial Osmar D.
Reyes , H. J. (2012). "Política y Administración". Mexico: INAP Praxis Series.
e-ISSN: 2576-0971. October - December Vol. 7 - 4 - 2023 . http://journalbusinesses.com/index.php/revista
116
Rivas , G. (2011). Contemporary models of internal control. Theoretical foundations.
Observatorio Laboral Revista Venezolana. Retrieved from
https://www.redalyc.org/pdf/2190/219022148007.pdf
Rodriguez , M., Piñeiro, C., & Llano, P. (2013). Risk mapping: risk identification and
management . Atlantic Review of Economics. Retrieved from
https://www.econstor.eu/bitstream/10419/146556/1/776123106.pdf
Rodríguez-Peñaherrera, C. (2000). The administrative reform process in Ecuador.
Serrano, P., Señalin, L., Vega, F., & Herrera, J. (2017). Internal control as an indispensable
tool for an efficient financial and accounting gestgion in banana companies in
Machala canton (Ecuador). Revista Espacios. doi:10.4802/espacios.
Vega , L., & Nives , A. (2016). Procedure for the management of supervision and
monitoring of internal control. Ciencias Holguín . Retrieved from
https://www.redalyc.org/pdf/1815/181543577007.pdf
Vergara, Y., Guamán, R., & Mogollón, P. (2021). Internal control and its impact on
Ecuadorian administrative and financial management of truck equipment
operations and mechanics (Fedesomec case study, 2020). Ciencia Latina Revista
Científica Multidisciplinar. doi:10.37811/CL_RCM.V5I5.866.
