This research applies the Committee of Sponsoring Organizations of the Treadway Commission (COSO) framework as a theoretical approach to assess the influence of an internal control system (ICS) on organizational effectiveness in public enterprises. Considering the case study of the North Lebanon Water Establishment (NLWE) as a public water utility, this paper illustrates how five components of the COSO framework – internal control environment, risk assessment, internal control activities, information and communications and monitoring – affect ICS effectiveness.
A quantitative approach was applied, using a representative survey of managers and employees from NLWE. Results were tested for validity and correlation coefficients. Five hypotheses, including the five dimensions of the COSO framework, were statistically examined.
The findings suggest that monitoring is the only element that has a meaningful impact on ICS effectiveness. Other elements had a positive influence without achieving statistical significance, apart from control activities, which had a slight negative impact.
The findings justify the need to enhance monitoring to reduce reliance on other components and achieve a greater impact on the ICS. This study also serves policymakers and managers by emphasizing the need to strengthen public enterprises’ governance, accountability and operational performance, attempting to examine how organizational and technological systems monitor, decide and interrelate.
