MINISTRY OF EDUCATION AND TRAINING
UNIVERSITY OF ECONOMICS HO CHI MINH CITY

VÕ THU PHỤNG
THE IMPACT OF CONSTITUENT FACTORS OF THE
INTERNAL CONTROL SYSTEM ON THE BUSINESS
PERFORMANCE IN VIETNAM ELECTRICITY
Major: Accounting
Code: 62.34.03.01
SUMMARY OF ECONOMIC THESIS
Hồ Chí Minh City- 2016
LIST OF THE DISCLOSURE
1. Vo Phung Thu (2013), Interest groups and its negative effecting
on the economy and corrective solutions, Journal of Economics-
Technology, Binh Duong University, No. 04, pp 110-119,
December 2013.
2. Vo Phung Thu (2014), The impact of control environment on the
effectiveness and efficiency of the operations of Vietnam
Electricity, Journal of Economics- Technology, Binh Duong
University, No. 06, pp 77-95, June 2014.
3. Nguyen Dat Tien, Vo Phung Thu (2016), Factors of Internal
Control affecting performance by business group Vietnam
Electricity, Journal of Economics- Technology, Binh Duong
University;
4. Vo Nhi Van, Vo Phung Thu (2016), Internal Control System at
Southern Power Corporation_ current state and improving
solution, Proceedings of the International Conference on
Science and Technology of Electric Power University.
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PREFACE
1. Study’s reason
In recent years, many state-owned enterprises (SOEs) have not
fulfilled their most important political role, due to their inefficient
operation, as a tool supporting the government to regulate the
nation’s macro-economy.
Extant literature found that internal control affects operational
efficiency. However, in the context of Vietnam, there is lack of
evidence showing that operational inefficiency, specifically of SOEs,
is caused by weakness existed in internal control system. Therefore,
this study focuses on the impact of internal control on operational
efficiency, empirically at Vietnam Electricity Group (EVN).
2. Research aims
This research is aimed to explore elements of internal control system
and evaluate their impact on effectiveness and efficiency of EVN’s
operation, with the following goals:
Finding factors of Internal Control System which effect EVN’s
performance.
Evaluate those impact on EVN’s performance.
3. Research questions
Question 1: How is the current performance of EVN?
Question 2: Which factor of Internal Control System impacts on
EVN’s operation?
Question 3: What is the level of impact that each factor has on EVN’s
performance?
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4. Research Subjects and Research Scope
Research subjects: Factors of Internal Control System which impacts
on EVN’s performance.
Research scope: focus on the impact on EVN’s performance, but not
other goals such as: the truth and fair of financial reporting or
regulation compliance.
5. Research Method
This work employs mixed methodology, combining qualitative and
quantitative paradigm. All factors discovered in qualitative step by
using Exploratory Factor Analysis (EFA) model will be assessed in
quantitative step for hypothesis test.
Questionaire is filled via either face-to-face interviews or emails, by
non-probability sampling method. Survey process is conducted
through two stages:
Preliminary stage: is to evaluate the reliability of the scale (using
Cronbach's alpha) and discover factors (using EFA). Any flaw in
questionnaire found will be fixed before official questionnaire are
sent (in stage 2). This research optimally employs least-squares index
in STEPWISE model to define and evaluate the impact of internal
control factors on EVN’s performance. The suitability of the model is
tested by the R2 coefficient.
6. Dissertation contributions
In theory
Reviewing the theories of internal control and internal control
reports, both internationally and domestically.
Accomplishing the framework of the internal control consisting of 5
factors, 10 elements with 49 observed variables which affect SOEs’
performance, evidence from EVN.
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Building up a new measuring scales, which may be used by future
research in the field.
In practice
Discovering 20 new observed variables affecting the business
performance of EVN, this research mitigates weaknesses of internal
control at EVN which makes the entity’s operation inefficient. These
twenty variables together with the 29 variables identified in COSO
Report 2013 constitute measuring scales of factors in internal control
system which has an influence on the operational efficiency of EVN.
Via quantitative research this dissetation has discovered 49 measured
variables correlated with the 10 elements that affect the performance
of EVN. In this light, the work has developed a model comprising of
specific factors in the internal control system that affects efficiency
of EVN’s operation.
CHAPTER 1 OVERVIEW OF FORMER RESEACHES
ABOUT FACTORS OF INTERNAL CONTROL SYSTEM
AFFECTING THE EFFECTIVENESS OF BUSINESS.
1.1 Studies on factors of Internal Control System affecting the
business performance of the enterprise.
1.1.1 International studies
Main streams include:
Impact of Internal Control on efficiency of business operations:
Reviewed studies have shown that there is close relationship between
Internal Control and efficient business operations of firms. And the
performance of the business to be considered by profits, revenues,
liquidity, ROI, ROA [Beeler and colleagues (1999), Jensen (2003),
Ittner (2003), Fadzil and colleagues. (2005), Kenyon and Tilton