1

Chapter 1

THE PROBLEM AND ITS BACKGROUND

This chapter presents the Introduction, Background of the Study,

Theoretical Framework, Conceptual Framework, Statement of the Problem,

Hypotheses, Assumptions, Scope and Limitations, Significance of the Study and

Definition of Terms.

Introduction

Globalization and product positioning has been the focus of business

industry today, and beauty products manufacturers is one of them. Beauty

products manufacturers have been expanding their operations and activities

national and international with the help of advancement in technology. The

expansion of business, Globalization, and the advanced technology also exposes

business to frauds and other risk that affects business operations. In line with this,

the effectiveness of internal control systems will test.

Internal Control refers to the policies and procedures implemented by the

management tend to meet its objectives. The primary objective of the business is

to maximize shareholders wealth and to gain reasonable profit for them to provide

applicable resources that will help the business to grow and become successful.

In pursuing these objectives, the organization should provide resources and

hire different staff that will render good services with the proper seminars and
 2

training that will test their competencies in their chosen field and develop

relationship with employees which is the most important asset in the organization.

In addition, internal control refers to the policies and procedures that will

help the company to operate effectively. It must be well organize and executed

properly to have a strong internal control and lessen and mitigate the internal

control deficiencies.

Therefore, internal control provides different assertions that there is no

material misstatement or weaknesses on the operation of the business that will

affect negatively to meet its objectives.

In line with this, Brilliant Skin Essentials Inc. is a company that endures

success even in a short period of time and people tend to know the business

success but the pain and suffering behind that success will not be easy as they

think.

The researcher’s aim to assess the internal control mechanism of Brilliant

Skin Essential Inc. if the organization experience internal control deficiencies and

how it affects the organization.

Background of the study

All entrepreneurs want their company to be one of the top leading names in

terms of their respective industries. However, there are some internal and external

factors that hinder this dream to be on the number one spot. Thus, internal control
 3

is one of the critical factors that affect the success of a company and also it helps

the company to realize the importance of their internal control in achieving their

long term goals and objectives.

According to the statement of Auditing standards (SAS,300); Internal

Control is defined as all the policies and procedures adopted by the directors and

management of an entity to assist in achieving their objective of ensuring, as far

as practicable, the orderly and efficient conduct of its business, including

adherence to internal policies, the safeguarding of assets, the prevention and

detection of frauds and errors, the accuracy and completeness of accounting

records, and the timely preparation of reliable financial information.

It explain that internal control is a policies and procedures that enable the

business to operate effectively and execute them with a proper and organize plan

and actions to aim its goals and objectives and also to prevent and detect internal

control deficiency.

Futhermore, the internal control mechanism of Brilliant Skin Essentials set

as a policies and procedures that should be properly and orderly implemented and

well executed in their business operation that will help the company to mitigate

fraud and put error and other issues when it comes to internal control and to avoid

hindrances in achieving its objectives.

According to Adowale and Afolabi internal controls are put in place to keep

the company on course toward profitability goals and achievement of its mission,

and to minimize surprises along the way. They enable management to deal with
 4

rapidly changing economic and competitive environments, shifting customer

demands and priorities, and restructuring for future growth. Internal controls

promote efficiency, reduce risk of asset loss, and help ensure the reliability of

financial statements and compliance with laws and regulations.

The study entitled The Impact of Internal Control Mechanism on the

Operational Efficiency of Small and Medium Scale Enterprises in Nigeria by

Adowale and Afolabi revealed that it is pertinent to state at this juncture that it takes

a number of measures and policies to develop and put in place a sound internal

control mechanism. Therefore, the management and staff of small and medium

scale industries should work together to establish an efficient and effective system

of control.

Regarding the size of the organization, small, medium or large, involvement

of all people within the organization is needed to execute properly the effectiveness

of the internal control system.

According to New York State Internal Control task Force (2006) the

fundamental principles of internal control are rooted in well-established

organizational techniques and practices. These techniques and practices can best

be understood as internal control if they are placed in the following conceptual

framework: the five basic components of internal control (control environment,

communication, assessing and managing risk, control activities, and monitoring).

(Kansas University, 2003) A company’s system of internal control compromises:

 5

Control Environment is a set of standards, structures, and processes that

provide the foundation for performing internal control within the entity

Risk Assessment is a process used to identify (on an iterative basis), assess,

and manage risks to the achievement of the entity’s objectives

Control Activities are actions performed under the direction of management,

as directed by an entity’s policies and procedures, to mitigate the risks to the

achievement of the entity’s objectives

Information and Communication is the distribution of information needed to

perform control activities and to understand internal control responsibilities to

personnel internal and external to the entity

Monitoring Activities are ongoing evaluations of the implementation and

operation of the five (5) components of internal audit.

It explain that the five components of internal control will be able to help the

company to assess, identify and mitigate risk that will serve as guide to create a

better policies and techniques for the company’s success.

Therefore, this five components will assess and identify whether the company

have a good and effective internal control mechanism or not and it will also help

them to change and improve their policies and procedures to make the company

more productive and to provide an organize operations.

 6

Mawanda (2008), states that “there is a general perception that institution

and enforcement of proper internal control systems will always lead to improved

financial performance”. It is also a general belief that properly instituted systems

of internal control improve the reporting process and also give rise to reliable

reports which enhances the accountability function of management of an entity.

It states that a good and strong internal control can improve the financial

performance of the companies accountability, competence, responsible

employees and management because an effective workers can provide a reliable

information that will reflect to a good internal control mechanism of the entity.

Therefore, the company should focus on the employee’s capabilities and

competences and give them credits in order to inspire the employees to work

harder which will reflect to the internal control of the company and can prevent

fraud risk and different types of risk.

Presidential Decree 1445 Section 123. Defines

Internal control as “the plan

of organization and all the
coordinate methods and
measures adopted within an
organization or agency to
safeguard its assets, check
the accuracy and reliability of
its accounting data, and
encourage adherence to
prescribed managerial
policies.”

The above mentioned Presidential Degree explained that company must

have a plan on what were the policies and procedures to be adopted because a
 7

good internal control mechanism helps the company to be organized, obtain

accurate and reliable information that will reflect on the success of the business.

Cunningham (2004) states that internal control systems begin as internal

processes with the positive goal of helping a corporation meet its set objectives.

Management primarily provides oversight activity; it sets the entity's objectives and

has overall responsibility over the ICS. Internal controls are an integral part of any

organization’s financial and business policies and procedures.

It states that Internal control has a process to help the firm to provide

information regarding achievement of operational, financial reporting and

compliance objectives; promoting orderly, economical, efficient and effective

operations; safeguarding resources against loss due to errors and fraud.

With this, the process of internal control will help the firm to prevent and

detect different issues and problem regarding internal control. Aside from this, it

will help them achieve its financial, operational goals and objectives.

According to Richard et al (2009), organizational performance

encompasses three specific areas of firm outcomes' financial performance which

is concerned with profits, returns on assets, and return on investment' product

market performance which centers on sales and market share' and shareholder

return that involves total shareholder return and economic value added.

It states that the organizational performance will reflect to the result of the

operation and the profit itself. Furthermore, if the company are capable on the
 8

maximization of shareholders wealth that will assess and determine if the company

meets its objectives.

Therefore, if the company obtained good sales and function effectively, then

the policies and procedures implemented are good and effective.

Theoretical Framework

This study was anchored from the 2013 updated Internal Control —

Integrated Framework of the Committee of Sponsoring Organizations of the

Treadway Commission (COSO).

The COSO (Committee of Sponsoring Organization) Framework is a

framework for designing, implementing and evaluating internal control for

organizations, providing enterprise risk management. The goal was to create a

framework for providing guidance on internal control, allowing organizations to

establish controls throughout their environment. The five principles of COSO

Internal Control are Risk Assessment, Control Activities, Information and

Communication, Control Environment and Monitoring Activities. (Thea Garcia,

2019)

It means that there are guidelines that will help the entity’s internal control

for them to improve the organizational goals and performance through different

policies and procedures. It implies that this framework was used to help the

researchers to assess and enhance the internal control mechanism of Brilliant Skin

Essentials, Inc. in Morong, Rizal.

 9

Conceptual Framework

This study entitled Internal Control Mechanism of Brilliant Skin Essentials,

Inc. In Morong Rizal utilized a Coombs System Approach where in it shows the

connection of the input, process, and output.

For the input model, it includes the Internal Control Framework answered

by the respondents to determine the Internal Control Mechanism of Brilliant Skin

Essentials, Inc. In Morong Rizal using Internal Control Checklist.

For the process, it includes the Planning, Observation, Drafting of the

Internal control checklist, and administering the Internal Control Checklist and

tabulation and interpretation of data.

For the output of the study, it includes the Internal Control Mechanism of

Brilliant Skin Essentials, Inc. in Morong, Rizal.

The arrow signifies the continuous flow of the study from planning,

observation, interview, administering of checklist and interpretation of data.

And lastly, the feedback is the interaction between the variables.

The researchers conducted the study to know the internal control

mechanism and what are the uncertainties encountered that affects the operational

efficiency and good management of the company.

 10

Input Process Output

I. What is the profile of

the respondents in
terms of :
 Name(optional)
 Age
 Sex
 Civil status
 Educational
attainment
 Position  Planning
 Department INTERNAL
 Number of years in  Observation
CONTROL
service in the
company  Internal MECHANISM
II. What is the profile of OF BRILLIANT
the business in terms of control checklist SKIN
 Years of existence
ESSENTIALS,
 No. of Employees
 No. of Branches
 Gathering INC. IN
 Amount of Capital MORONG
 Form of business Data
RIZAL
organization
III. Does the internal  Interpretation
control mechanism of
Brilliant Skin Essentials of Data
Inc. function as
expected in terms of:
 Control
Environment
 Risk Assessment
 Control Activities
 Information and
Communication
 Monitoring
Activities

Feedback

Figure 1

A Conceptual Paradigm showing The Internal Control Mechanism of Brilliant

Skin Essentials, Inc. in Morong Rizal
 11

Statement of the Problem

The study seeks to assess the internal control mechanism of Brilliant Skin

Essentials

Specifically, this study answered the following questions:

1. What is the profile of the respondents in terms of :

1.1 Name (optional)

1.2 Age

1.3 Sex

1.4 Civil status

1.5 Educational attainment

1.6 Position

1.7 Department

1.8 Number of years in service in the company

2. What is the profile of the business in terms of

2.1 Years of existence

2.2 No. of Employees

2.3 No. of Branches

2.4 Amount of Capital

2.5 Form of business organization

3. Does the internal control mechanism of Brilliant Skin Essentials, Inc.

function as expected in terms of:

3.1 Control Environment

3.2 Risk Assessment

 12

3.3 Control Activities

3.4 Information and Communication

3.5 Monitoring Activities

Assumptions

As the researchers conducted the study entitled “Internal Control

Mechanism of Brilliant Skin Essentials” the following assumptions are made:

1. Brilliant Skin Essentials have good internal control mechanism

2. The respondents are truthfully and willingly answer the question stated

in the questionnaire.

3. Participants have a sincere answer interest in participating in the study

and do not have any other motives, such as impressing the management

because of agreeing to be a part of the study.

Scope and Limitation

The study entitled Internal Control Brilliant Skin Essentials, Inc. in Morong,

Rizal was conducted in the school year 2020-2021.

This study focused on the Internal Control Mechanism of Brilliant Skin

Essentials Inc. among the employees and management of the said company. The

study was conducted at Brilliant Skin Essentials, Inc. located at Morong, Rizal.

The respondents of the study are the owner and staff of Brilliant Skin

Essentials Inc. that helps the researchers to identify if the internal control
 13

mechanism of the organization are well applied and to determine how it affect the

efficiency of the organization.

Significance of the study

The researchers believe that the research will be a great help to the following:

To the Brilliant Skin Essentials, Inc. To assess and evaluate what needs

to be improve in their internal control.

To the Future Researchers. This study can be a guide to get some ideas or

information that may enhance their study. Also, for the aspiring entrepreneurs

someday who wants to put up a business this research can lend a hand.

To the University. This study could be the research reference and a basis

to review the internal control system of university

Furthermore, the researchers would be benefited to this study which could

be their stepping stone or to be exposed on what's really happening in the

corporate world.

Definition of Terms

The following terms are defined conceptually and operationally for better

understanding of the study.

Brilliant Skin Essentials Inc. A manufacturing company of beauty

products located at Morong Rizal. It is owned by a 24 year old entrepreneur, one

of the youngest female CEO, Glenda Dela Cruz Victorio.

 14

Internal Control Mechanism. Refers to the policies adopted by the

management to ensure that the company objective will achieve.

Control Activities. These are actions performed under the direction of

management, as directed by an entity’s policies and procedures, to mitigate the

risks to the achievement of the entity’s objectives.

Control Environment. A set of standards, structures, and processes that

provide the foundation for performing internal control within the entity.

Information and Communication. The distribution of information needed

to perform control activities and to understand internal control responsibilities to

personnel internal and external to the entity.

Internal Control Mechanism. Refers to the policies adopted by the

management to ensure that the company objective will achieve.

Monitoring Activities. The ongoing evaluations of the implementation and

operation of the five (5) components of internal audit.

Risk Assessment. A process used to identify (on an iterative basis),

assess, and manage risks to the achievement of the entity’s objectives.

 15

Chapter 2

RESEARCH METHODOLOGY

This chapter presents the Research Method, Setting of the Study, Subject

of the Study, Sources of Data, Procedure of the Study and Statistical Treatment.

Research Method

This study used a descriptive research design. It is defined as a research

method that describes the characteristics of the population or phenomenon

studied. This methodology focuses more on the “what” of the research subject than

the “why” of the research subject. The research design will help the researchers

when interpreting the gathered data through the questionnaire checklist answered

by the respondents.

According to Jaikumar (2012), descriptive designs are used to observe,

document and describe a phenomenon occurring in its natural setting without any

manipulation or control. It is also used to gain more information about

characteristics within a selected field of study. In addition, it identifies problem with

current practices, make judgments or determine alternative solutions for the

existing practices. It is created by gathering, analyzing, and presenting collected

data. This allows a researcher to provide insights into the why and how of research.

Descriptive design helps others better understand the need for the research.

Descriptive research is usually defined as a type of quantitative research,

though qualitative research can also be used for descriptive purposes. The
 16

research design should be carefully developed to ensure that the results are valid

and reliable (McCombes, 2019).

The researchers made used of this because it was the most applicable

research method in the study to determine the internal control mechanism of the

subject matter.

Setting of the Study

The study was conducted at Morong Rizal where the Brilliant Skin

Essentials Inc, manufacturing plant is located. Morong, officially the Municipality

of Morong (is a 2nd class municipality in the province of Rizal, Philippines.

According to the 2015 census, it has a population of 58,118 people. Morong is

politically subdivided into 8 barangays with 3 situated in the poblacion namely;

Bombongan, Caniogan-Calero-Lanang, Lagundi, Maybancal, San Guillermo/ San

Guilmo, San Pedro (Poblacion), San Jose (Poblacion), San Juan (Poblacion).

Among the 8 Barangays in Morong Rizal, Barangay San Juan is the center

of business and trade in the town of Morong Rizal. It is also said to be the highest

remitting income revenue in the whole barangay of the town. This is where

establishments are seen such as Jollibee, Morong Centerpoint, SM Savemore,

RCBC Savings Bank, UCPB Savings Bank, D.I.Y Hardware, Mercury Drugstore,

and Mang Inasal. Other local establishments found in this area are THRIFTMART

(former: Ronan grocery store), Camillus chicken, Mateo's bookstore, Morong

Doctor's Hospital, Rizal Provincial Hospital, Hernandez bookstore, ERWIN'S

boutique, Skin Cellance de Rizal, Supreme Care Medical Diagnostic and Imaging
 17

Center Inc., Cesar S.D. Mateo Memorial Clinic, and Cristina Mart. The facade of

the St. Jerome's church, a Department of Tourism recognized tourist spot is also

located.

Subject of the Study

The subject of the study is the Brilliant Skin Essentials, Inc., it is a

manufacturing business located at Morong Rizal. Brilliant Skin Essentials, Inc is a

gem in the beauty and cosmetics brand in the Philippines. Natural, safe and proven

formulation offered by Brilliant Skin Essentials, it continuously creates accessible

beauty products to fulfill the skin care needs of Filipinos.

It is owned by a 24 years old Glenda Dela Cruz Victorio from the Province

of Morong, Rizal. Glenda is one of the country’s youngest CEOs. Gawad Award

Amerika in Hollywood recognized her as the Youngest Filipino CEO in the Field of

Cosmetics and Skin Care in 2018.

The researchers selected Brilliant Skin Essential and its Internal Control as

the subject of the study of the said company. The researchers used the

questionnaire checklist to be answer by owner, manager and employees in order

to gather the data and information needed.

The subject of the study helped the researchers to determine the Internal

Control Mechanism of Brilliant Skin Essentials, Inc.

 18

Sources of Data

In the conduct of research, researchers rely on two kinds of data sources—

primary and secondary.

The primary sources of data are obtained from the questionnaire checklist

answered by the business owner, manager, and employees of the company, as

well as interviews.

The secondary data are those derived from literatures and studies related

to the paper that found on the internet.

Procedures of the Study

In the particular study, the researchers made used of different procedures

as follows: First, the researchers drafted their chapter 1 and 2 then the researchers

submit it to their research instructor through online. The instructor gave comments

and suggestions that help the researchers to improve their paper through as well.

Furthermore, after receiving some comments and suggestions, the researchers

revised their paper immediately. Moreover, the researchers ask the permission of

the owner of the Brilliant Skin Essentials to conduct a study in their company with

proper communication and request letter. Next, they drafted a questionnaire

checklist and validated it by some experts. After validating the questionnaire

checklist, they administered it to their chosen respondents, and start gathering

data through answered questionnaire checklist and interviews. After gathering the

data, the researchers presented, tabulated, analyzed the results and make an
 19

interpretation which is discussed in chapter 3. Then summary of findings,

conclusions and recommendations are presented in chapter 4.

Lastly, the researchers finalized their paper, after some revision they

submitted it as a compliance to the academic course.

Statistical Treatment

The collected data in the study are subject to the some statistical

treatments. The data are gathered, tallied, and presented in a table for better

understanding together with its interpretation. The following statistical treatments

are used to analyzed and interpret data.

To determine the profile of the respondents in terms of age, sex, civil status,

educational attainment, position, department, and number of years in service in

the company percentage and frequency are used.

The percentage of each item was computed by dividing it with the sample

total number of respondents who answered the survey. The formula used in the

application of this technique was

% = (f/n) x 100

where:

% = percentage

f= frequency

n= total sample
 20

The Arithmetic Mean is the average of the numbers: a calculated "central"

value of a set of numbers. To calculate it, add up all the numbers, then divide by

how many numbers there are.

In order to interpret the means, the Likert Scale below is used:

Scale Range Qualitative Degree of the respondents’ perception

description on the Internal Control Mechanism of
Brilliant Skin Essential Inc.

5 4.20-5.00 80-100 Always

implementation
or practiced

4 3.20-4.19 60-79 Frequent

3 2.60-3.19 40-59 Sometimes

2 1.80-2.59 20-39 Seldom

1 1.00-1.79 0-19 Never

Figure 2

The Five-Point Likert Scale

The Likert Scale is used to interpret items in the questionnaire. These

responses are based on the respondents profile and the respondents’ perception

on the Internal Control Mechanism of Brilliant Skin Essentials, Inc.

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Chapter 3

PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA

This chapter shows the Presentation, Analysis and Interpretation of the

gathered data base from the 47 respondents answered on the survey.

Personal Data of the respondents with respect to Age, Civil Status,

Educational Attainment, Position, Department, and Number Of Years In
Service In The Company

Table 1 shows the frequency, percentage and rank distribution of the

Personal Data of the respondents in terms of Age.

Table 1

Frequency, Percentage and Rank Distribution of the Personal Data of

the respondents in terms of Age
Age Frequency Percentage Rank

18-22 years old 16 34.04% 2

23-27 years old 23 48.94% 1

28-32 years old 4 8.51% 3

33-37 years old 2 4.26% 4

38-42 years old 1 2.13% 5

Total 47 100%

It could be gleaned from the table that 26 out of 47 respondents belong to

the age bracket of 23-27 years old represents the highest percentage having

48.94% of the respondents. The second highest ranking age brackets were those
 22

respondents whose ages were 18-22 years old or 34.04% of respondent’s

population. The third highest ranking percentage was those respondents who are

within the age bracket of 28-32 years old or 8.51. The fourth one goes to ages

ranging from 33-37 or 4.26%. And lastly, ages 38-42 years old turned out to be 5%

of the total respondents.

It implies that most of the employees working on the company are between

in the age of 23-27 years old which is adult and there is no minor working at the

company.

According to Professor Bill Pelz (n.d), in levinsons theory, entering the adult

world is the ages of 22-28, is the stage where committing to an occupation, defining

goals, and finding intimate relationships is what people usually do.

It implies that most people ages between 23- 27 is the stage where the

people starts to decide focus on their careers, their dream jobs and start thinking

on whether they should commit to someone or continue to do what makes them

happy.

Table 2 shows the frequency, percentage and rank distribution of the

Personal Data of the respondents in terms of Sex.

Table 2

Frequency, Percentage and Rank Distribution of the Personal Data of the

respondents in terms of Sex

Sex Frequency Percentage Rank

Male 25 53.19% 1
 23

Female 22 46.81% 2

Total 47 100%

It could be gleaned from the table that most of the respondents are male

with 53.19% having the highest percentage and female having 46.81% or 23 out

of 47 of the total respondents.

It implies that most of the employees working in the manufacturing plant are

males because the company need a strong person to transfer and deliver the

products from one place to another.

According to Florida Technical College (2019), stereotypes are changing

and that’s good for everyone. Having more men in the beauty industry means

adding new perspectives to an ancient art. Men have as much of an ability and

affinity for styling and creative beauty as women do and it’s time to start breaking

the stereotype of the typical person seeking a career in the beauty industry. There

is major growth happening in beauty and cosmetology and there is room for men

and women in this exciting and prosperous career.

It implies that in a manufacturing company, a lot of men are needed in a

production area of the company to ensure the safety of different product that will

be transfer to other departments. Men and woman are capable of that job but men

are strong enough to handle this kind of job.

Table 3 shows the frequency, percentage and rank distribution of the

Personal Data of the respondents in terms of Civil Status.

 24

Table 3

Frequency, Percentage and Rank Distribution of the Personal Data of the

respondents in terms of Civil Status

Civil Status Frequency Percentage Rank

Single 43 91.49% 1

Married 4 8.51% 2

Widow 0 0%

Total 47 100%

It could be gleaned from the table that the majority of the respondents were

single with a percentage of 91.49% or 43 of the total respondents and the rest are

married respondents with a percentage of 8.51% or 4 of the total respondents.

It implies that most of the respondents are single and focused on their

current job.

According to Nitro (n.d.), considering more than 1 in 3 working employees

are additionally clocking in at one or more side gigs, their long hours may not be

good for fostering romantic relationships in the first place. Perhaps even more

relevant to working millennial, experts suggest personal relationships can have a

major impact on people’s professional life, and dating someone whose career

goals don’t line up with your own could be a roadblock to success.

It implies that most people tend to be single because they are more career

oriented, more focused on their assigned job.

 25

Table 4 shows the frequency, percentage and rank distribution of the

Personal Data of the respondents in terms of Educational Attainment.

Table 4

Frequency, Percentage and Rank Distribution of the Personal Data of the

respondents in terms of Educational Attainment

Educational Frequency Percentage Rank

Attainment

Elementary 0 0%
graduate

High school 10 21.28% 2

graduate

College graduate 37 78.72% 1

Total 47 100%

Table 4 reveals that out of 47 respondents, 37 or 78.72% of the respondents

are college graduate and 10 or 21.28% of the respondents are high school

graduate.

It implies that most of the respondents are college graduate, which means

they are degree holder that signifies they have a good educational background.

As stated by Kaplan (2018), degrees are more important now than ever

before. Since so many people obtain a degree prior to entering the workforce,

employers are less likely to consider those without good education. Though

gaining job experience is important, having a degree will put you ahead of the

candidates who don’t.

 26

It implies that it is easier to find a job if people have college degrees, Also,

it became an advantage toward those who are not a degree holder. Another factor

that the employer looks was the experience.

Table 5 shows the frequency, percentage and rank distribution of the

Personal Data of the respondents in terms of Position.

Table 5

Frequency, Percentage and Rank Distribution of the Personal Data of the

respondents in terms of Position

Position Frequency Percentage Rank

CEO 1 2.13% 8.5

Executive 1 2.13% 8.5

Secretary

Department Head 3 6.38% 2.5

Staff 23 48.94% 1

Merchandising 1 2.13% 8.5

Manager

Document 1 2.13% 8.5

Controller

Support Officer & 2 4.26% 4.5

Staff

Coordinator 2 4.26% 4.5

Customer Service 2 4.25% 4.5

Representative

Associates 3 6.38% 2.5

 27

Accounts 1 2.13% 8.5

Receivable Clerk

Quality Control 2 4.25% 4.5

Inspector

H.R. Generalist 1 2.13% 8.5

Safety Officer 1 2.13% 8.5

H.R. Head 1 2.13% 8.5

Graphic Designer 1 2.13% 8.5

Sales 1 2.13% 8.5

Representative

Total 47

It could be gleaned from table that out of 47, 23 of the respondents or

48.94% are staff of their respective department. Department and Associates are

tied with both 3 and 6.38% out of all the total respondents’ population. On the other

hand, the Support Officer and Staff, Coordinator, Customer Service

Representative and Quality Control Inspector are also both have 2 or 4.5% of the

total population. Lastly, the CEO, Executive Secretary, Merchandising Manager,

Document Controller, Accounts Receivable Clerk, H.R. Generalist, Safety Officer,

H.R. Head, Graphic Designer. And Sales Representative is all within the 2.13% or

1.

It implies that most of the respondents are staff, either production staff or

office staff. Manufacturing companies have more people in production area. This
 28

is the process where they are converting raw materials into finished goods.

Although there are some machines that can replace human job, still it requires

human skills.

Demand for production workers continues to be a critical factor when

evaluating a labor market. Labor demand can tell potential employers many things

about a market: competitive pressures, relative ease of hiring, and geographic

trends, to name a few. In any site selection exercise, labor demand should be used

in conjunction with other factors to verify that a skilled workforce is available. This

is especially critical in high-head count operations, such as manufacturing and

production. (Josh Bays, 2020).

It implies that production workers or staff will always be in demand

especially in manufacturing, this demand also indicate that the business is

growing.

Table 6 shows the frequency, percentage and rank distribution of the

Personal Data of the respondents in terms of Department.

Table 6

Frequency, Percentage and Rank Distribution of the Personal Data of the

respondents in terms of Department

Department Frequency Percentage Rank

Executive 2 4.26% 8.5

Business 1 2.13% 10.5

Development Unit
 29

Marketing 5 10.64% 5.5

Research and 5 10.64% 5.5

Development

Admin 6 12.77% 3.5

Warehouse and 1 2.13% 10.5

Logistic

Financial and 4 8.51% 7

Accounting

Sales Department 8 17.02% 1

Human Resource 7 14.89% 2

Department

Production 6 12.77% 3.5

Quality control 2 4.26% 8.5

Total 47 100%

It could be gleaned from the table that most of the respondents is from

Sales Department with 17.02% or 8 out of 47 respondents. Next is from Human

Resource Department having 7 or 14.89% of the total respondents. The Admin

and Production Department are both have 6 or 12.77%. Same with Marketing and

Research and Development Department, it also has both 5 and 10.64% of the total

population of the respondents. The Executive and Quality Control Department also

have both 2 and 4.26%. Lastly are the Business Development Unit and Warehouse

and Logistic tied with 1 or 2.13 of the total respondent’s population.

 30

It implies that most of the respondents are from Sales Department. Since

the type of business is manufacturing, it is important the sales of the business is

always monitored, and the big factor that contribute to sales shall be retained.

As stated by Levinson (2018), having a strong sales team is crucial to the

success of a company because the sales department is responsible for making

sales, growing your business and retaining existing customers. Ultimately, the

most important function of your sales department is maintaining relationships with

your customers. This personal touch is the key to happy, long-term client

relationships, not to mention increased profitability.

It means that aside from the product that company offers, sales department

is also a part that helps to retain their customer. If a company has good sales team

and build a very good relationship to the customers, it will bring more success to

the business. Furthermore, the profitability of the company will determine if the

business are having a strong internal control or not, because the strong internal

control will always be based on the employee’s performance. If the employees in

the sales department are doing a great job with their works then it will determine

the strong internal control of the company and its success.

Table 7 shows the frequency, percentage and rank distribution of the

Personal Data of the respondents in terms of Number of years in service in the

company.

Table 7

Frequency, Percentage and Rank Distribution of the Personal Data of the

respondents in terms of Number of years in service in the company
 31

Number of years Frequency Percentage Rank

in service in the
company

Less than 1 year 27 57.45% 1

More than 1 years 14 29.79% 2

2- 4years 6 12.77% 3

Total 47 100%

It could be gleaned from the table that most of the respondents has a less

than 1 year working experience in the company having a 27 or 57.45% of the total

respondents. The second to the highest rank is has more than 1 years working

experience in the company with a total of 14 or 29.79% of the total population of

the respondents. Lastly it is within the range of 2- 4 years working experience

which is 6 or 12.77% of the total respondent’s population.

It implies that most of respondents are working with the company for less

than 1 year now; they have witnessing how the business continuously expands in

the cosmetics industry and able to gain knowledge and experience and learn more

about the policies and procedures of the business.

According Ben Hoffman (2018), a successful business needs consistency

in all aspects, employees included. Having a high retention rate means keeping

staff members long-term, resulting in less time and resources required for training

new staff and having the loyalty needed to run a business. Maintaining your

employees, as long as they are a good fit for the company, is crucial to a successful
 32

business. A low employee retention rate will hurt the organization. Since the

business has newly established its manufacturing plant, currently on its 2 years

now, the retention rate of the employee is still low, and it do not have a huge impact

on the business.

It implies that if the company have high retention rate of employees they

treat the employees very well and the employees were satisfied with the benefits

that company offered. In regards to Brilliant Skin Essentials, although the most

dominated in the survey is with serving the company with less than 1 year, it

justified that because the business has recently established its own manufacturing

plant and will discover that there are a lot to learn in the business. However, having

a year work experience will not be enough to determine the employee’s capabilities

because there are a lot more to learn on the company’s policies and procedures

and also different factors about the entity that will enable them to work efficiently

and effectively.

Business Profile in terms of Years of existence, Number of Employees,

Number of Branches, Amount of Capital, and Form of Business

Organization.

Table 8 shows the response of the owner on the business profile in terms

of Years of existence, Number of Employees, Number of Branches, Amount of

Capital, and Form of Business Organization of the Brilliant Skin Essentials Inc.
 33

Table 8

Tabulated response on the Business Profile in terms of Years of existence,

Number of Employees, Number of Branches, Amount of Capital, and Form
of Business Organization

Years of existence 4

Number of employees More than 500

Number of branches 2 Manufacturing Plant with more than

50,000 sellers nationwide

Amount of capital 0-3,000,000 PHP

Form of business organization Corporation

It could be gleaned from the table that the Brilliant Skin Essentials Inc. exists

for almost 4 years, with more than 500 employees within its 2 branches. The

starting amount of capital was ranging from 0-3,000,000 as a corporation.

It implies that the Brilliant Skin Essential have been in the cosmetic industry

for almost 4 years now. They have a total of more than 500 employees in their 2

branches, with a starting capital range form 0-3,000,000 PHP. Brilliant Skin

Essentials Inc. is a corporate organization.

It implies that in a short span of time they continue to succeed and also

dominate the skin care products and also continue to inspire other small business

owners.
 34

Respondents Perception on the Internal Control Mechanism of Brilliant Skin

Essentials Inc. in Morong, Rizal

The following table shows the computed mean, rank distribution, and verbal

interpretation pertaining to the Internal Control Mechanism of Brilliant Skin

Essentials Inc. in Morong, Rizal. The researchers selected 50 employees in the

company including the owner as their respondents.

Table 9 shows the computed mean, rank distribution and verbal

interpretation of the respondents’ perception on the Internal Control Mechanism of

Brilliant Skin Essentials, Inc. in Morong, Rizal in terms of Control Environment.

Table 9
Obtained Mean on the Perception of the Respondents on the Internal
Control Mechanism of Brilliant Skin Essentials, Inc. in Morong, Rizal in
terms of Control Environment

A. Control Environment Mean Rank Verbal

interpretation

1. The management strive to

comply with laws, rules and
regulations affecting the
organizations 4.72 1 Always

2. The company ensure the

safety of the employees on
the different raw material
used to produce skincare
products 4.70 2 Always
 35

3. The management places

sufficient emphasis on the
importance of integrity,
ethical conduct, fairness and
honesty in their dealings with
employees, suppliers and
other organizations 4.60 3 Always

4.There an atmosphere of
mutual trust and open
communication between
management and
employees has been
established within the
organization 4.49 4 Always

5. The employees in
organization have the
knowledge, skill and training
necessary to perform their
job adequately 4.40 5 Always

Mean 4.58 Always

Table 9 reveals that the mean of 4.58 resulting to “always” in verbal

interpretation shows that the business has good control environment and always

comply on rules and regulation that could affect the operations of the company.

According to Zhang 2016, among the five components, control environment

provides the foundational basis for carrying out internal controls in an organization,

because control environment sets the tone of an organization and it is the

foundation for all other components of internal control, providing discipline and

structure. As an employee, it is important to understand the working environment

and management philosophy through understanding of the control environment.

 36

Having a strong internal control environment can provide management and

stakeholders reasonable assurance that the organization is operating in

accordance with company policies, industry standards, and regulatory

requirements (Clarke, 2020).

It implies that it is important that every employee should understand the

company’s control environment as it will be the guide to achieve company’s long

term goal and with compliance to regulatory requirements it will determine if the

business operate efficiently and effectively.

Table 10 shows the computed mean, rank distribution and verbal

interpretation of the respondents’ perception on the Internal Control Mechanism of

Brilliant Skin Essentials, Inc. in Morong, Rizal in terms of Risk Assessment.

Table 10

Obtained Mean on the Perception of the Respondents on the Internal

Control Mechanism of Brilliant Skin Essentials, Inc. in Morong, Rizal in
terms of Risk Assessment

B. Risk Assessment Mean Rank Verbal Interpretation

1.The management have an

emergency plan regarding
some circumstances like
natural disaster and viruses
that would affect the
operations and profitability of
the business

4.47 2 Always
 37

2. In organization, does the

processes for producing new
skincare products are
adequately managed 4.62 1 Always

3. The management comply

with different brand and
regulatory requirements
regarding the products they
are going to launch 4.49 3 Always

4. The management have a

security protocols that will
prevent the hackers to access
and steal confidential
information 4.36 5 Always

5. The management have

contingency plan if there were
a major disruption in provision
of services e.g. all staff on
leave of absence, information
systems crash, permanent
loss of facilities or key
personnel an all paper record
are destroyed 4.40 4 Always

Mean 4.47 Always

It could be gleaned from the table that the mean of 4.47 with a verbal

interpretation of “always” shows that the business have strategy in assessing the

risk they could encounter in releasing new product and in case when there is an

unexpected disaster they handled it very well.

The risk assessment is the place to note any further improvements that are

needed to a task or process, gaps may be identified such as: a lack of training,

insufficient lighting or damaged guarding etc. Returning to the risk assessment

 38

sometime later to update it with the further actions is a very good way of keeping

a record to demonstrate your organization’s continuous improvement. Risk

assessments shouldn’t just sit on a dusty shelf where they are good to nobody

(Britanis, 2016).

It implies that risk assessment is one of the ways to find out whether there

is a need to improve on selected areas that lack on supervision or lack on strategy

on the risks should be handled.

Table 11 shows the computed mean, rank distribution and verbal

interpretation of the respondents’ perception on the Internal Control Mechanism of

Brilliant Skin Essentials, Inc. in Morong, Rizal in terms of Control Activities.

Table 11

Obtained Mean on the Perception of the Respondents on the Internal

Control Mechanism of Brilliant Skin Essentials, Inc. in Morong, Rizal in
terms of Control Activities
C. Control Activities Mean Rank Verbal Interpretation

1. The equipment, supplies,

inventory, cash and other
assets are physically
secured and periodically
counted and compared to
the amounts shown on
control records

4.49 1 Always

2. The management
assigned well-trained
employees to access to a 4.36 4 Always
certain account in
 39

accounting information
system

3. The management
provides pre-numbered
documents that will prevent
duplicate transaction 4.45 2 Always

4. The organization easily

discover theft and robberies
and apply appropriate
actions 4.30 5 Always

5. The organization have

adequate mean of
supervision 4.43 3 Always

Mean 4.43 Always

Table 11 depicts that the mean of 4.43 that results to verbal interpretation

of “always” it means that the business have good control activities on how the

company will manage or mitigate the risk identified and they have a sound system

on keeping their assets and financial records.

Ahn et al. (2020), mentioned that control activities are carried out at all

levels of an entity, in various stages of the business process and in technology

environment. They can include a series of manual and automatic activities such as

authorizations, approvals, verifications, reconciliations and reviews of operating

performance and can be designed to prevent or review the implementation of

management directives. Therefore, if higher efficiency control activities achieve,

more effective internal control is achieved.

 40

It implies that if a company have efficient control activities, the more they

mitigate risk, the business will likely to have a smooth run of the operation because

of the efficient internal control activities.

Table 12 shows the computed mean, rank distribution and verbal

interpretation of the respondents’ perception on the Internal Control Mechanism of

Brilliant Skin Essentials, Inc. in Morong, Rizal in terms of Information and

Communication.

Table 12

Obtained Mean on the Perception of the Respondents on the Internal

Control Mechanism of Brilliant Skin Essentials Inc. in Morong, Rizal in
terms of Information and Communication
D. Information And Mean Rank Verbal Interpretation
Communication

1. The management assigned

someone to do reporting
responsibilities that specify what
reports are to be prepared, what
they are to contain, and how
they are to be used 4.53 1 Always

2. The management provide a

timely report the will help the
management to facilitate
decision making 4.47 3.5 Always

3. The management is being

transparent on the financial
report of the operation of the
business 4.36 5 Always

4. The information system allow

some interactions between
management and employees 4.49 2 Always
 41

5. The organization provide a

way for the employees to
provide recommendations for
process improvements 4.47 3.5 Always

Mean 4.46 Always

It could be gleaned from the table the mean of 4.46 that results to “always”

verbal interpretation. It means that they have a strong process on information and

communication system between management, and employees.

According to State University of New York (2021), communication of

relevant, reliable, and quality information is essential in carrying out internal control

responsibilities. Objectives and responsibilities for internal control are

communicated internally, allowing employees to understand the importance of, as

well as their role in, maintaining effective internal controls. Matters affecting the

functioning of other components of internal control are communicated externally.

Use of effective communication provides the information necessary to carry out

the day-to-day internal control activities. Organizations with truly effective internal

control provide training to personnel on a regular basis, keep current policies and

procedures available to personnel, and communicate other critical information in a

timely manner via company meetings or emails as needed (Clarke, 2020).

It is implicitly stated that all employees must be aware of their

responsibilities on the efficiency of the company’s internal control and the impact

of it on achieving business goals. All of the relevant information that can affect the

functions of internal control should be communicated directly to management.

 42

Table 13 shows the computed mean, rank distribution and verbal

interpretation of the respondents’ perception on the Internal Control Mechanism

of Brilliant Skin Essentials, Inc. in Morong, Rizal in terms of Monitoring Activities.

Table 13

Obtained Mean on the Perception of the Respondents on the Internal

Control Mechanism of Brilliant Skin Essentials, Inc. in Morong, Rizal in
terms of Monitoring Activities
E. Monitoring Activities Mean Rank Verbal Interpretation

1. The management has means

to monitor and evaluate all
activities per department 4.68 4.5 Always

2. The management consider

customer complaints and
feedback in order to identify
quality problems 4.70 2.5 Always

3. The management is aware of

problems that the employees
encounter when doing their
work 4.68 4.5 Always

4. The organization easily

identify mistake and gap in work
performance 4.51 5 Always

5. The management have

access to enough information to
monitor employee’s
performance 4.70 2.5 Always

Mean 4.66 Always

Table 13 reveals that the mean of 4.66 that results to verbal interpretation

of “always” means that the monitoring activities are highly effective in evaluating

that the established controls are carried out effectively.

 43

Jacobson Jarvis (2009), indicated that monitoring helps ensure that internal

controls continue to operate effectively. When monitoring is designed and

implemented appropriately, organizations benefit because they are more likely to

identify and correct internal control problems on a timely basis. Internal control

deficiencies can be identified and communicated in a timely manner to those

parties responsible for taking corrective action and to management and the board

as appropriate. Effective monitoring can best be achieved when it is based on

supportive tone at the top and an effective organizational structure that assigns

monitoring roles to people with appropriate capabilities, objectivity and authority.

It is stated that if a company has a good monitoring system, any deficiencies

could be detected and corrected immediately so that it will not result to a worse

scenario

Table 14 shows the Composite Table on the Respondents’ Perception on

the Internal Control Mechanism of Brilliant Skin Essentials, Inc. in Morong, Rizal in

Terms of Control Environment, Risk Assessment, Control Activities, Information

and Communication, and Monitoring Activities.

Table 14
Composite Table on the Respondents’ Perception on the Internal Control
Mechanism of Brilliant Skin Essentials, Inc. in Morong, Rizal in Terms of
Control Environment, Risk Assessment, Control Activities, Information and
Communication, and Monitoring Activities

Internal Control General Mean Verbal Rank

Mechanism Interpretation

a.Control 2
Environment 4.58 Always
 44

b. Risk Assessment 4.47 Always 3

c. Control Activities 4.43 Always 5

d. Information and
Communication
4.46 Always 4

e. Monitoring 1
Activities 4.66 Always

Grand Mean 4.52 Always

Table 14 shows the composite table about the summary of Internal Control

Mechanism of Brilliant Skin Essentials, Inc., in Morong Rizal.

Overall the grand mean of Internal Control Mechanism was 4.52 and

interpreted as “Always”.

It implies that the Internal Control Mechanism established by the company

is always functions as expectedly.

As stated by Michael Brent (2019), internal controls are put into place so an

organization's activities, policies and plans are efficiently integrated to best achieve

business goals. Other purposes of internal control are to protect a firm from

mismanagement or fraud, to ensure the company's actions are within the bounds

of the law, and to compile financial and managerial data that can be evaluated so

that feedback can be given and implemented. Ultimately, the information gathered

will be presented to the company's directors, board and/or shareholders. Strong

internal controls will ensure a company's resources are utilized only for their

intended purposes, greatly minimizing the risk of resource misuse. Internal control

also prevents any financial irregularities by detecting them quickly and thus
 45

resolving any issues that arise in a timely manner. In addition, having strong

internal controls in place can prevent a company's employees from being accused

of any irregularities or misappropriations of funds.

It implies that having a strong internal control means all the policies and

every activities in the company is well monitored and implemented, if there is any

irregularities happen, it can detects quickly so that it prevents from any huge

impact to operation of the business.

 46

Chapter 4

SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

This chapter presents the summary of findings of the study, concretized

conclusions from the findings and recommendations offered.

Summary of findings

From the analysis and interpretation of data, the following findings were hereby

summarized:

1. Frequency, percentage and rank distribution of the Personal Data of the

respondents in terms of:

1.1. Age. Majority of the respondents had age bracket of 23-27 years old

with a frequency of 23 and a percentage of 48.94%.

1.2. Sex. Majority of the respondents are male with a frequency of 25 and

a percentage of 53.19%

1.3. Civil Status. Majority of the respondents are single with a frequency

of 43 and a percentage of 91.49%.

1.4. Educational Attainment. Majority of the respondents are college

graduates with a frequency of 37 and a percentage of 78.72%.

1.5. Position. Most of the respondents dominated in the survey are staff

with a frequency of 23 and a percentage of 48.94%.

1.6. Department. Most of the respondents are in the sales department

with a frequency of 8 having a percentage of 17.02%.

 47

1.7. Number of years in service in the company. Most of the respondents

are has a less than 1 year working experience in the company having

a frequency of 27 and a percentage of 57.45%

2. Tabulated response of the owner on the Business Profile in terms of:

2.1. Years of Existence. The company is in the cosmetic industry 4 years

as of now.

2.2. Number of employees. The company has a total of more than 500

employees in all of it branches.

2.3. Number of branches. The company has a total of 2 branches of

manufacturing plant with more than 50,000 sellers nationwide

2.4. Amount of capital. The company has a staring capital ranging from

0-3,000,000 PHP.

2.5. Form of business organization. The company is a corporation type of

organization.

3. Weighted Mean of the Respondents’ Perception on the Internal Control

Mechanism of Brilliant Skin Essentials, Inc. in Morong, Rizal in terms of:

3.1. Control Environment. The first rank is “The management strive to

comply with laws, rules and regulations affecting the organizations”,

with a mean of 4.72 which obtained the verbal interpretation

“Always”. Next is “The company ensure the safety of the employees

on the different raw material used to produce skincare products”

obtained the mean of 4.70 verbally interpreted as “Always”, followed

by “The management places sufficient emphasis on the importance

 48

of integrity, ethical conduct, fairness and honesty in their dealings

with employees, suppliers and other organizations” with a mean of

4.60 which is interpreted as “Always”. The fourth rank is “There an

atmosphere of mutual trust and open communication between

management and employees has been established within the

organization” having a mean of 4.49 and a verbal interpretation of

“Always”. And lastly, “The employees in organization have the

knowledge, skill and training necessary to perform their job

adequately” with a mean of 4.40 which is verbally interpreted as

“Always”.

3.2. Risk Assessment. “In organization does the processes for producing

new skincare products are adequately managed” got the first rank

having the mean of 4.62 and “Always” as a verbal interpretation. The

second is “The management have an emergency plan regarding

some circumstances like natural disaster and viruses that would

affect the operations and profitability of the business” with a mean

and verbal interpretation of 4.47 and “Always” respectively. “The

management comply with different brand and regulatory

requirements regarding the products they are going to launch” is the

third with a mean of 4.49 which is verbally interpreted as “Always”,

and then, “The management have contingency plan if there were a

major disruption in provision of services e.g. all staff on leave of

absence, information systems crash, permanent loss of facilities or

 49

key personnel an all paper record are destroyed” as the fourth one

with a mean of 4.40 and a verbal interpretation of “Always”. Lastly is

“The management have a security protocols that will prevent the

hackers to access and steal confidential information” with a mean of

4.36 and verbal interpretation of “Always”.

3.3. Control Activities. The first rank is “The equipment, supplies,

inventory, cash and other assets are physically secured and

periodically counted and compared to the amounts shown on control

records” weighing a mean of 4.49 verbally interpreted as “Always”.

Followed by “The management provides pre-numbered documents

that will prevent duplicate transaction” with a mean of 4.45 and a

verbal interpretation of “’Always”. Then “The organization have

adequate mean of supervision” with mean of 4.43 and a verbal

interpretation of “Always”. “The management assigned well-trained

employees to access to a certain account in accounting information

system” is s the fourth rank with a mean and verbal interpretation of

4.36 and “Always”. Last is the “The organization easily discover theft

and robberies and apply appropriate actions” with a mean of 4.30

and verbally interpreted as “Always”.

3.4. Information and Communication. “The management assigned

someone to do reporting responsibilities that specify what reports are

to be prepared, what they are to contain, and how they are to be

used” is the leading with a mean of 4.53 and “Always” as a verbal

 50

interpretation. Followed by “The information system allows some

interactions between management and employees” with a mean of

4.49 and verbally interpreted as “Always”. Next is, “The management

provide a timely report the will help the management to facilitate

decision making” and “The organization provide a way for the

employees to provide recommendations for process improvements”

both obtained a mean of 4.47 and a verbal interpretation of “Always”.

Lastly, “The management is being transparent on the financial report

of the operation of the business” with a mean of 4.36 and “Always”

as verbal interpretation.

3.5. Monitoring Activities. “The management considers customer

complaints and feedback in order to identify quality problems” is tied

with “The management have access to enough information to

monitor employee’s performance” which obtained both mean of 4.70

and a verbal interpretation of “Always”. Also, “The management has

means to monitor and evaluate all activities per department” and

“The management is aware of problems that the employees

encounter when doing their work” both obtained a mean of 4.68 and

a verbal interpretation of “Always”. Lastly is “The organization easily

identify mistake and gap in work performance” weighing a mean of

4.51 and verbally interpreted as “Always”

Overall the grand mean of Internal Control Mechanism was 4.52 and

interpreted as “Always” based on the respondent’s perception.

 51

Conclusions

Based on the summary of findings, presentation, analysis, and

interpretation of data, the researchers arrived at the following conclusions;

1. In regards to the business profile, Brilliant Skin Essentials Inc. is a

corporation with more than 500 employees, which implies that the

employees has their own duties and responsibilities that will help the

company to provide a good internal control, In contrary, when the

business has a lot of employees, fraud and sabotage can be occurred

that would affect the business internal control. In terms of years of

existence, BSEI existed in 4 years now, going on their 5th year on July.

This means that even though a business operates in a short period of

time, the success of the business continue to overflow and can compete

with the bigger market in a beauty and cosmetics industry. With the initial

capital ranges to P 0- 3,000,000, with that kind of capital the business

continue to grow and has a 2 manufacturing plant with more than 50,000

sellers nationwide. It is a realization that a good internal control wouldn’t

always be based on how they handle and manage the business but on

how they give importance to the employees. Taking good care of the

employees and the employees will take good care of the business.

2. Based on the findings, the last rank is the Control Activities, which

indicates that the ideas for improvement of the policies and procedures

of the company must be developed.

 52

3. In the short period of time that Brilliant Skin Essentials Manufacturing

Plant has existed, the experience on the encountered risks do not have

a great impact on their operation.

4. The Brilliant Skin Essential, Inc. in Morong, Rizal has a good internal

control that is need to be maintained and improved in order to make a

stronger internal control that enable to control different risk that the

company will encounter and to make the company more successful.

Although Brilliant Skin Essential encountered certain issues about the

compliance of the product and pulled out that product to the market, they

tend to cope with that issue and continue to look forward and improve

as much as they can. Therefore, a good internal control is already

acceptable but there is a need for improvement for the business to have

a strong internal control.

Recommendations

From the gathered information, the researchers have formulated the

following recommendations

1. The researchers are highly encouraging the management to continue

maintaining for having a good internal control.

2. Continue to value every employee and always be open to one another

if there are certain problem and issues to apply solution that would

reflect to have a strong internal control.

 53

3. The Brilliant Skin Essentials, Inc. even they are having good internal

control, The company should be open for suggestions that can enhance

the operations, reporting and compliance of the business which will lead

to have a strong internal control.

4. The employees should have a proper training and seminars to increase

the value and to gain deeper knowledge which can apply to a workplace.

In line with this, there are different factors to look up to: first, most of the

employees are having a less than 1 year experience about the

knowledge of the product. Proper training and seminars lessen the risk

that one might encounter such as the operation, policies, and procedure

that is being implemented by the company.

5. To the future researchers who will study this paper, the researchers

suggest that the business and other manufacturing companies in

improving, if there is a need to, and maintaining the internal control

mechanism that have a huge impact on the success of the business.

 54

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 55

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New York State University (2021), “Understanding Internal Controls”.

Retrieved from https://system.suny.edu/internal-
controls/understanding-internal-controls/

Nitro(2021), "Young, Single and Carreer Oriented". Retrieved from

https://www.nitrocollege.com/research/young-single-career-oriented

Professor Bill Pelz (n.d.), "Chapter 8: Early Adulthood". Retreived from

https://courses.lumenlearning.com/suny-hccc-ss-152-
1/chapter/psychosocial-development-2/

Thea Garcia (2019), “What is the COSO Framework”. Retrieved from

https://reciprocitylabs.com/resources/what-is-the-coso-framework/

Zhang (2016), “What Is Internal Control Environment?.” Retrieved from

http://www.carrtegra.com/2016/04/internal-control-
environment/#:~:text=Of%20the%20five%20components%2C%20c
ontrol,control%2C%20providing%20discipline%20and%20structure
 57

APPENDICES
 58

Appendix A

LETTER OF APPOINTMENT TO THE THESIS ADVISER

PAULO DEL PRADO, CPA

College of Accountancy
University of Rizal System
Binangonan, Rizal

Dear Sir:

In consideration of your field of specialization, expertise and experience you are

being proposed to be the research adviser of Maria Mikaela C. Gonzales, Gibel
May C. Del Rosario and Sophia Andrea S.J. Domingo, who’s conducting the study
entitled “Internal Control Mechanism Of Brilliant Skin Essentials, Inc. In
Morong, Rizal” in partial fulfillment of the requirements of the degree of Bachelor
of Science in Accountancy.

If you agree to this, please sign the conformed below.

Very truly yours,

ERNIE D. TANO, CPA, MBA

Dean, College of Accountancy

Conformed:

Date:
 59

Appendix B

LETTER OF ACCEPTANCEFROM THESIS ADVISER

ERNIE D. TANO, CPA, MBA

Dean, College of Accountancy
University of Rizal System
Binangonan, Rizal

Dear Sir:

I have the honor to inform your good office that I have accepted the proposal to be
the Research Adviser of Maria Mikaela C. Gonzales, Gibel May C. Del Rosario
and Sophia Andrea S.J. Domingo, who’s conducting the study entitled “Internal
Control Mechanism Of Brilliant Skin Essentials, Inc. In Morong, Rizal” in
partial fulfillment of the requirements of the degree of Bachelor of Science in
Accountancy.

Thank you very much and God bless.

Very truly yours,

PAULO DEL PRADO, CPA

Thesis Adviser

Conformed:

Date:
 60

Appendix C

LETTER OF APPOINTMENT TO THE ENGLISH CRITIC

QUEROBINE C. MILAN, LPT

College of Accountancy
University of Rizal System
Binangonan, Rizal

Dear Sir:

In consideration of your field of specialization, expertise and experience you are

being proposed to be the English Critic of Maria Mikaela C. Gonzales, Gibel May
C. Del Rosario and Sophia Andrea S.J. Domingo, who’s conducting the study
entitled “Internal Control Mechanism Of Brilliant Skin Essentials, Inc. In
Morong, Rizal” in partial fulfillment of the requirements of the degree of Bachelor
of Science in Accountancy.

If you agree to this, please sign the conformed below.

Very truly yours,

ERNIE D. TANO, CPA, MBA

Dean, College of Accountancy

Conformed:

Date:
 61

Appendix D

LETTER OF ACCEPTANCEFROM ENGLISH CRITIC

ERNIE D. TANO, CPA, MBA

Dean, College of Accountancy
University of Rizal System
Binangonan, Rizal

Dear Sir:

I have the honor to inform your good office that I have accepted the proposal to be
the Critic Adviser of Maria Mikaela C. Gonzales, Gibel May C. Del Rosario and
Sophia Andrea S.J. Domingo, who’s conducting the study entitled “Internal
Control Mechanism Of Brilliant Skin Essentials, Inc. In Morong, Rizal” in
partial fulfillment of the requirements of the degree of Bachelor of Science in
Accountancy.

Thank you very much and God bless.

Very truly yours,

QUEROBINE C. MILAN, LPT

English Critic

Conformed:

Date:
 62

Appendix E

LETTER OF APPOINTMENT TO THE THESIS STATISTICIAN

ALDRIN B. BOCA, MOS (CAR)

College of Accountancy

University of Rizal System

Binangonan, Rizal

Dear Sir,

In consideration of your field of specialization, expertise and experience you

are being proposed to be the research statistician of Maria Mikaela C. Gonzales,
Sophia Andrea SJ. Domingo and Gibel May C. Del Rosario whose study entitled
"Internal Control Mechanism of Brilliant Skin Essentials Inc. in Morong, Rizal”
in partial fulfillment of the requirements of the degree of Bachelor of Science in
Accountancy.

If you agree to this, please sign the conformed below.

Very truly yours,

ERNIE D. TANO, CPA, MBA

Dean, College of Accountanc

Conformed: ______________

Date: ___________________
 63

Appendix F

LETTER OF ACCEPTANCE FROM THESIS STATISTICIAN

ERNIE D. TANO, CPA, MBA

College of Accountancy

University of Rizal System

Binangonan, Rizal

Dear Sir,

I have the honor inform your good office that I have accepted the proposal
to be research statistician of Maria Mikaela C. Gonzales, Sophia Andrea SJ.
Domingo and Gibel May C. Del Rosario whose study entitled " Internal Control
Mechanism of Brilliant Skin Essentials Inc. in Morong, Rizal” " in partial
fulfillment of the requirements of the degree of Bachelor of Science in
Accountancy.

Thank you very much and God bless.

Very truly yours,

ALDRIN B. BOCA, MOS (CAR)

Research Statistician

Conformed: ______________

Date: ___________________
 64

Appendix G

LETTER OF APPOINTMENT TO THE CHAIRMAN OF THE PANEL

LIBERTY T. OCAMPO, CPA, MBA

College of Accountancy
University of Rizal System
Binangonan, Rizal

Dear Madame:

In consideration of your field of specialization, expertise and experience you are

being proposed to be the Chairman of the Panel of Maria Mikaela C. Gonzales,
Gibel May C. Del Rosario and Sophia Andrea S.J. Domingo, who’s conducting the
study entitled “Internal Control Mechanism Of Brilliant Skin Essentials, Inc. In
Morong, Rizal” in partial fulfillment of the requirements of the degree of Bachelor
of Science in Accountancy.

If you agree to this, please sign the conformed below.

Very truly yours,

ERNIE D. TANO, CPA, MBA

Dean, College of Accountancy

Conformed:

Date:
 65

Appendix H

LETTER OF ACCEPTANCE FROM THE CHAIRMAN OF THE PANEL

ERNIE D. TANO, CPA, MBA

Dean, College of Accountancy
University of Rizal System
Binangonan, Rizal

Dear Sir:

I have the honor to inform your good office that I have accepted the proposal to be
the Chairman of the Panelof Maria Mikaela C. Gonzales, Gibel May C. Del Rosario
and Sophia Andrea S.J. Domingo, who’s conducting the study entitled “Internal
Control Mechanism Of Brilliant Skin Essentials, Inc. In Morong, Rizal” in
partial fulfillment of the requirements of the degree of Bachelor of Science in
Accountancy.

Thank you very much and God bless.

Very truly yours,

LIBERTY T. OCAMPO, CPA, MBA

Chairman of the Panel

Conformed:

Date:
 66

Appendix I

LETTER OF PERMISSION TO CONDUCT THE STUDY

April 24, 2021

Date

Dear Madame:

Greetings!

The researchers are presently conducting a study entitled INTERNAL

CONTROL MECHANISM OF BRILLIANT SKIN ESSENTIALS, INC. IN
MORONG, RIZALas a part of the requirements for the DegreeBachelor of
Science in Accountancy.

In this regard we would like to request your permission to please allow us to

conduct our study among the employee of your company who can provide the
necessary information for the completion of this study.

We hope for your favorable response to this request.

Respectfully yours,

MARIA MIKAELA C. GONZALES

GIBEL MAY C. DEL ROSARIO
SOPHIA ANDREA SJ. DOMINGO

Approved by:

PAULO DEL PRADO

Research Adviser
 67

Appendix J

LETTER TO THE RESPONDENTS

Dear Respondents,

We are presently conducting a study of part of our requirements for theDegree

Bachelor of Science in Accountancy and you are chosen as respondents in our
researchentitledINTERNAL CONTROL MECHANISM OF BRILLIANT SKIN
ESSENTIALS, INC. IN MORONG, RIZAL. Your cooperation and honest
response will be greatly appreciated and treated strictly confidential.

Very truly yours,

MARIA MIKAELA C. GONZALES

GIBEL MAY C. DEL ROSARIO

SOPHIA ANDREA S.J. DOMINGO

Noted:

PAULO DEL PRADO

Research Adviser
 68

Appendix K

QUESTIONNAIRE CHECKLIST

I. Personal Data

Name(optional):

Age:

Civil status:

Educational Attainment:

Position:

Department:

Number of years in service in the company:

II. Business Profile

Years of existence:

Number of Employees:

Number of Branches:

Amount of Capital:

( ) 0-3,000,000 PHP

( ) 3,000,001-6,000,000 PHP

( ) 6,000,001-9,000,000 PHP

( ) 9,000,001-12,000,000 PHP

( ) 12,000,001-15,000,000 PHP

( ) 15,000,001 Above PHP

Form of business organization

( ) Sole
 69

( ) Partnership

( ) Corporation

III. Directions

Below is a set of criteria for assessing the internal control mechanism of Brilliant
Skin Essentials, Inc. Kindly rate, from the scale that will be the best describe the
practice in the company.

Scale Verbal Interpretation

5 Always

4 Frequent

3 Sometimes

2 Seldom

1 Never

CONTROL ENVIRONMENT 5 4 3 2 1

1. Does the management strive to comply with

laws, rules and regulations affecting the
organizations?

2. Does the company ensure the safety of the

employees on the different raw material used
to produce skincare products?

3. Does the management places sufficient

emphasis on the importance of integrity, ethical
conduct, fairness and honesty in their dealings
with employees, suppliers and other
organizations?
 70

4. Is there an atmosphere of mutual trust and

open communication between management
and employees has been established within the
organization?

5. Do the employees in organization have the

knowledge, skill and training necessary to
perform their job adequately?

RISK ASSESSMENT

1. Does the management have an emergency

plan regarding some circumstances like natural
disaster and viruses that would affect the
operations and profitability of the business?

2. In the organization, does the processes for

producing new skincare products are
adequately managed?

3. Does the management comply with different

brand and regulatory requirements regarding
the products they are going to launch?

4. Does the management have a security

protocols that will prevent the hackers to
access and steal confidential information?

5. Does the management have contingency

plan if there were a major disruption in
provision of services e.g. all staff on leave of
absence, information systems crash,
permanent loss of facilities or key personnel an
all paper record are destroyed?

CONTROL ACTIVITIES

1. Does the equipment, supplies, inventory,

cash and other assets are physically secured
and periodically counted and compared to the
amounts shown on control records?
 71

2. Does the management assigned well-trained

employees to access to a certain account in
accounting information system?

3. Does the management provide pre-

numbered documents that will prevent
duplicate transaction?

4. Does the organization easily discover theft

and robberies and apply appropriate actions?

5. Does the organization have adequate mean

of supervision?

INFORMATION AND COMMUNICATION

1. Does the management assigned someone to

do a reporting responsibilities that specify what
reports are to be prepared, what they are to
contain, and how they are to be used?

2. Does the management provide a timely

report the will help the management to facilitate
decision making.

3. Does the management is being transparent

on the financial report of the operation of the
business?

4. Does the information system allow some

interactions between management and
employees?

5. Does the organization provide a way for the

employees to provide recommendations for
process improvements?

MONITORING ACTIVITIES

1. Does the management have means to

monitor and evaluate all activities per
department?
 72

2. Does the management consider customer

complaints and feedback in order to identify
quality problems?

3. Does the management is aware of problems

that the employees encounter when doing their
work?

4. Do the organization easily identifies mistake

and gap in work performance?

5. Does the management have access to

enough information to monitor employee’s
performance?

-----ADAPTED FROM INTERNAL CONTROL SURVEY GUIDELINES-----

 73

APPENDIX J

CERTIFICATE OF CONTENT VALIDATION

This is to certify the following experts validated the adapted questionnaire

checklist of Maria Mikaela C. Gonzales, Gibel May C. Del Rosario and Sophia
Andrea S.J. Domingo for their Research Paper entitled INTERNAL CONTROL
MECHANISM OF BRILLIANT SKIN ESSENTIALS, INC. IN MORONG, RIZAL

NAME POSITION DATE SIGNATURE

1. Yolanda D. Vistal Instructor March 19, 2021

2. Susan D. Cadiente Instructor April 21, 2021

Researchers: Course and Section

1. Maria Mikaela C. Gonzales BSA 3-2

2. Gibel May C. Del Rosario BSA 3-2

3. Sophia Andrea S.J. Domingo BSA 3-2

 74

CURRICULUM
VITAE
 75

Gonzales, Maria Mikaela C.

206 Raymundo Street Lagundi Morong Rizal

09531076069

mariamikaela.gonzales17@gmail.com

PERSONAL INFORMATION

Date of Birth: February 17, 2000 Place of Birth: Morong, Rizal

Age: 21 years old Civil Status: Single

Gender: Female Religion: Church of Christ

Mother: Ester C. Gonzales Occupation: None

Father: Juanito T. Gonzales Occupation: Farmer

EDUCATIONAL ATTAINMENT

PRIMARY YEAR GRADUATED

Lagundi Elementary School 2011- 2012

Morong, Rizal

Junior High School

Lagundi CCL National High School 2015- 2016

Morong, Rizal

Senior High School

Morong National High School 2017- 2018

Morong, Rizal

College

University of Rizal System- Binangonan Campus 2018- Present

College of Accountancy
 76

Del Rosario, Gibel May C.

Azucena St. Old Hinubaan, Tayuman Binangonan, Rizal

09561394463

delrosariogibelmay03@gmail.com

PERSONAL INFORMATION

Date of Birth: May 09, 2000 Place of Birth: Binangonan Rizal

Age: 21 years old Civil Status: Single

Gender: Female Religion: Apostolic Catholic

Mother: Gina C. Del Rosario Occupation: House wife

Father: Abegael M. Del Rosario Occupation: Tricycle Driver

EDUCATIONAL ATTAINMENT

PRIMARY YEAR GRADUATED

Tayuman Elementary School 2011-2012

Junior High School

Don Jose Ynares Sr. Memorial National High School 2015-2016

Senior High School

ACLC College of Taytay 2017-2018

College

University of Rizal System- Binangonan Campus 2018- Present

College of Accountancy
 77

Domingo, Sophia Andrea S.J.

288 Turentigue Street Brgy. San Juan, Wawa Morong, Rizal

09286314795

sophiadomingo06@gmail.com

PERSONAL INFORMATION

Date of Birth: December 6,1999 Place of Birth: Morong, Rizal

Age: 21 years old Civil Status: Single

Gender: Female Religion: Roman Catholic

Mother: Normita S.J. Domingo Occupation: Housewife

Father: Laurence R. Domingo Occupation: Tricycle Driver

EDUCATIONAL ATTAINMENT

PRIMARY YEAR GRADUATED

Roman Tantiongco Memorial School 2011-2012

Morong, Rizal

Junior High School:

Morong National High School 2015- 2016

Morong, Rizal
Senior High School
Morong National High School 2017- 2018
Accountancy, Business and Management

College

University of Rizal System- Binangonan Campus 2018- Present

College of Accountancy