Training, attitudes, segregation of duties and internal control of church finances: an empirical study in Indonesia
-
DOIhttp://dx.doi.org/10.21511/imfi.21(3).2024.03
-
Article InfoVolume 21 2024, Issue #3, pp. 28-39
- 260 Views
-
66 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
Church organizations are non-profit organizations operating in the religious sector. Church financial management requires good and adequate internal control to protect and secure church assets from fraud, damage, and waste due to ineffective use of assets. Sacralization is a factor that gives rise to blind trust in financial managers and spiritual leaders in the church. This study aims to analyze the influence of trained accounting personnel, attitudes toward the importance of internal control, and separation of duties on the level of internal control of church finances. The sample used was 115 pastors at the HKBP Church in Jakarta, Indonesia. Data were obtained by distributing questionnaires to pastors as respondents. The analysis technique is carried out using multiple regression. The results of this study show that trained accounting personnel, attitudes about the importance of internal control implementation, and the existence of separation of duties in church organizations have a significant effect on the level of internal control of church finances. The results of the study strengthen support for the implementation of effective church financial internal control, which requires increasing the competency of accounting staff through accounting training, the attitude of organizational members to support the implementation of the church’s financial internal control system to make it more accountable, and the existence of a clear separation of duties within the organization to avoid fraud.
- Keywords
-
JEL Classification (Paper profile tab)H83, L31, M41, M53
-
References49
-
Tables8
-
Figures1
-
- Figure 1. Research model
-
- Table 1. Validity test
- Table 2. Reliability test
- Table 3. Descriptive analysis of variables by municipality
- Table 4. Descriptive analysis of variables by size
- Table 5. Hypothesis test
- Table 6. Coefficient of determination test
- Table 7. Results of multiple regression test to all models
- Table A1. Variable indicators
-
- Agang, S. B. (2020). Integrating Public Theology into African Theological Institutions’ Curricula’, African Theological Journal for Church and Society. African Theological Journal for Church and Society, 1(1), 3-21.
- Agyei-Mensah, & Kwame, B. (2016). Accountability and Internal Control in Religious Organisations: A Study of Methodist Church Ghana. African J. Accounting, Auditing and Finance, 5(2).
- Ahiabor, G., & Mensah, C. C. Y. (2013). Effectiveness of Internal Control on the Finances of Churches in Greater Accra, Ghana. Research Journal of Finance and Accounting, 4(13), 115-122.
- Ajzen, I. (1991). The Theory of Planned Behavior. Organizational Behavior and Human Decision Processes, 50, 179-211.
- Alleyne, B., & McGovern, P. (2020). Improving internal controls at the Church of God: a case study. Journal of Business Cases and Applications, 27, 1-12.
- Andrei, P., Balluchi, F., & Furlotti, K. (2018). Collaboration between For-profit and Non-profit Organisations: Some Insights into the Social Doctrine of the Church. Hybridity in the Governance and Delivery of Public Services, 7, 215-242.
- Bandura, A. (1978). Self-efficacy: Toward a unifying theory of behavioral change. Advances in Behaviour Research and Therapy, 1(4), 136-161.
- Behn, B. K., DeVries, D. D., & Lin, J. (2010). The determinants of transparency in nonprofit organizations: An exploratory study. Advances in Accounting, 26(1), 6-12.
- Bethlen, S. (2018). The Role of Calvinism in the Development of Modern Economy. Polgári Szemle, 14, 352-366.
- Bigoni, M., Gagliardo, E. D., & Funnel, W. (2013). Rethinking the Sacred and Secular Divide. Auditing & Accountability Journal, 26(4), 567-594.
- Boyd, J. C. (2022). Fuzzy Church: gospel and culture in the North of England. Practical Theology, 15(6), 616-618.
- Bryan, T. K., Robichau, R. W., & L’Esperance, G. E. (2020). Conducting and utilizing evaluation for multiple accountabilities: A study of nonprofit evaluation capacities. Nonprofit Management and Leadership, 12, 1-23.
- Chester, M. C., Laverdiere, R. G., & Unseth, A. D. (2008). Using an Internal Control Index to Evaluate the Internal Control Procedures of Churches. Journal of Ministry Marketing and Management, 5(1), 13-21.
- Christanti, R., Wibowo, W. S., & Wijaya, Y. (2023). Perceptions of Church Financial Transparency: Ethical-Theological Analysis and Financial Accountability. Evangelikal Journal, 7(1), 35-51.
- Crawford, L., Morgan, G. G., & Cordery, C. J. (2018). Accountability and not-for-profit organisations: Implications for developing international financial reporting standards. Financial Accountability and Management, 34(2), 181-205.
- Dethier, F., Delcourt, C., & Willems, J. (2021). Transparency of nonprofit organizations: An integrative framework and research agenda. International Journal of Nonprofit and Voluntary Sector Marketing, 21.
- DeVries, B. A. (2016). Spiritual gifts for biblical church growth. In Die Skriflig, 50(1), 1-10.
- Froud, H. (2021). Returning from exile? Reconciliation within the church after COVID-19. Practical Theology, 14(1), 123-131.
- Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E., Black, W. C., & Anderson, R. E. (2018). Multivariate Data Analysis. Cengage Learning.
- Halik, M., & Halik, J. B. (2020). Does the Basic Christian Community (BCC) need to do Financial Accountability to the Parish? Proceedings of the First International Conference on Economics, Business and Social Humanities, ICONEBS.
- Harris, E. E., & Neely, D. (2021). Determinants and Consequences of Nonprofit Transparency. Journal of Accounting, Auditing and Finance, 36(1), 195-220.
- Irvine, H. J. (2005). Balancing Money and Mission in a Local Church Budget. Accounting and Accountability Journal, 18, 2, 211-237.
- Jałocha, B., Góral, A, & Bogacz-Wojtanowska, E. (2019). Projectification of a global organization – case study of the Roman Catholic Church. International Journal of Managing Projects in Business, 12(2), 298-324.
- Joo, S. (2022). Financial Literacy Education for the Elderly: A Case Study on Providing Basic Financial Literacy Education to the Elderly via Religious Communities.
- Lachney, K. (2022). An Exploration of Internal Controls and Their Impact on Fraud in Protestant Churches. Journal of Forensic and Investigative Accounting, 14(3), 486-504.
- Laughlin, R. C. (1990). A Model of Financial Accountability and The Church of England. Financial Accountability & Management, 6(2), 93-114.
- London, L., & Richardson, V. (2020). Church Accounting: The How to Guide for Small & Growing Churches: Deep River Press, Inc.
- Magdalena, R., Konde, Y. T., & Kurniawan, I. S. (2022). Analisis penerapan PSAK no. 45 tentang pelaporan keuangan organisasi nirlaba entitas gereja dengan menggunakan komponen arus kas. [Analysis of the application of PSAK no. 45 concerning financial reporting of non-profit church entities using cash flow components]. Jurnal Akuntansi Mulawarman, 7(2), 1-11. (In Indonesian).
- Martes, A. C. B., & Rodriguez, C. L. (2003). Church Membership, Social Capital, and Entrepreneurship in Brazilian Communities in The U.S. International Research in the Business Disciplines, 4, 171-201.
- Muller, R. (2015). Incarnation Theology versus the Sacralisation of Authority. South Africa: AOSIS.
- Myers, D. (2012). External Stakeholders and Internal Controls in Churches.
- Niederwimmer, K. (2017). Accounting als Komponente der Corporate Governance in christlichen Organisationen [Accounting and Corporate Governance in Christian Organization]. Springer Gabler, Wiesbaden, 103-114. (In Indonesian).
- Njobvu, E. N., Kaira, B., & Chowa, T. (2020). Financial Accountability and Internal Controls in Religious Organizations: A Case Study of Holy Spirit Catholic Parish. The International Journal of Business Management and Technology, 4(3), 248-261.
- Nwankwo, S., Gbadamosi, A., & Ojo, S. (2012). Religion, spirituality and entrepreneurship: The church as entrepreneurial space among British Africans. Society and Business Review, 7(2), 149-167.
- Ortega-Rodríguez, C., Licerán-Gutiérrez, A., & Moreno-Albarracín, A. L. (2020). Transparency as a key element in accountability in non-profit organizations: A systematic literature review. Sustainability (Switzerland), 12(14).
- Pang, A., Hogan, E., & Andrasevic, I. (2022). The Catholic Church abuse scandal in Ireland: two steps forward, one step back by Pope Francis? Corporate Communications: An International Journal, 27(1), 15-33.
- Parker, L. D. (2002). Budgetary Incrementalism in A Christian Bureaucracy. Management Accounting Research, 13(1), 71-100.
- Quattrone, P. (2015). Governing Social Order, Unfolding rationality, and Jesuit Accounting Practices: A Procedural Approach to Institutional Logics. Administrative Science Quartely, 60(93), 411-445.
- Quinn, M., Oliveira, J., & Santidrián, A. (2022). Accounting controls at the Society of Jesus – 1646 to 2005. Journal of Management History, 28(2), 255-283.
- Radianto, W. E., & Laturette, K. (2019). Increasing Accountability Through Internal Control Mechanism in Religious Organization. Humanities & Social Sciences Reviews, 7(6), 1204-1209.
- Rojas, R. R. (2022). Contextualizing faith-based leadership models: A competency approach to Pastoral leadership. Practical Theology, 15(6), 555-568.
- Sharma, U., & Frost, D. (2023). Social Capital and Budgeting in a Local Church. Advances in Management Accounting, 35, 45-71.
- Suryandari, I., & Lintang, F. (2018). The Perspective of Javanese Christian Church on the Implementation of Internal Controls in GKJ Wiladeg. ProceeJournal of Contemporary Accounting and Economics, 302-308.
- Tanui, P. J., Omare, D., & Bitange, D. J. (2016). Internal Control System for Financial Management in the Church: A Case of Protestant Churches in Eldoret Municipality, Kenya. European Journal of Accounting, Auditing, and Finance Research, 4(6), 29-46.
- Tetteh, L. A., Muda, P., Yawson, I. K., Sunu, P., & Ayamga, T. A. (2021). Accountability and Internal Control Practices: A Study of Church Fund Management. Academy of Accounting and Financial Studies Journal, 25(6), 1-15.
- Wibowo, E. A., & Kristanto, H. (2018). Church members’ perceptions of internal control. Theological Echoes, 3(1), 53.
- Williams, C. (2022). Towards a Pentecostal theology of praxis. Practical Theology, 15(2), 192.
- Yohanna, E. R., Pujiningsih, S., & Juliardi, D. (2021). Internal Control Systems in Modern and Biblical Perspectives: Preventing Financial Fraud at The X Church in East Java. Jurnal Riset Akuntansi dan Bisnis Airlangga, 6(1), 974-991.
- Young, E. (2018). Preventing Fraud in Churches: an Analysis of Segregation of Duties Implementation.