The role of internal control and risk management on going concern of MSMEs
Keywords:
Internal control, Risk management, Going concern, MSMEsAbstract
Micro, Small, and Medium Enterprises (MSMEs) become the most important pillar of the Indonesian economy. However, MSMEs face more risks in business continuity due to a lack of resources, especially in developing countries. MSMEs are better able to carry out internal control and risk management to survive in a volatile market. As a risk management tool, internal control does contribute to the sustainability of MSMEs. The purpose of the study is to test and analyze internal control and risk management for ongoing concerns of MSMEs. This research is quantitative research. The population of this study is MSME business actors in Magelang Regency. The sampling technique uses convenience sampling with the number of samples used in this research being 135 MSMEs in Magelang Regency. Hypothesis testing uses the SEM-PLS analysis tool. The results of this study show that internal control and risk management are not significant in achieving MSMEs' business continuity. This study expands the literature by providing empirical evidence on the role of internal control and risk management in the growth of going concern of MSMEs.
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