Internal control systems in US churches: An examination of the effects of church size and denomination on systems of internal control

Abstract

The concept of internal control is just as relevant to churches as it is to profit seeking organizations. Inadequate internal controls can hinder the management responsibilities of church officers and employees and place them in a position where they may be tempted to engage in questionable activities and accounting practices, or could subject individuals to unwarranted accusations of such activities. This study was designed to evaluate the effects of church size as well as the polity and hierarchical structure of denominations on systems of internal control. A questionnaire was used to collect data regarding internal controls currently in place in churches. The internal control evaluation scores were found to be significantly different based on church size. Three major denominations with different types of church polity and differing hierarchical structures were included in the study. The internal control evaluation scores were found to be significantly different based on denomination. This suggests that the polity and hierarchical structure of a denomination affect the quality of a local church’s system of internal control.

Citation

Duncan, J.B., Flesher, D.L. and Stocks, M.H. (1999), "Internal control systems in US churches: An examination of the effects of church size and denomination on systems of internal control", Accounting, Auditing & Accountability Journal, Vol. 12 No. 2, pp. 142-164. https://doi.org/10.1108/09513579910270084