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Mohamad Akoum

Diplômé DBA - 2019

Titre de thèse

Measuring the internal control effectiveness in the oïl & gas industry : an integrated framework


Veronique Blum-Garier

Domaines d'expertise

  • Audit et contrôle interne
  • Economie de l’information et de la connaissance
  • Gouvernance d’entreprise
  • Sens (rôle) des réserves pétrolières
Background / Purpose: Operational Internal Control (IC) has not benefited from enough focus compared to Financial Controls which drew the highest government attention following the financial scandals of the last decades. Oil & Gas industry is subject to serious operational risks which need to be managed in a very controlled manner. Credit rating agencies tend to focus on financial and organizational governance when rating large corporations granting less emphasis on the operational Internal Control practices. Hence, the industry need for a comprehensive and reliable Index to measure the effectiveness of Internal Controls in the Oil & Gas businesses.Design/Methodology/Approach: We followed the Evidence-Based Management (EBM) methodology to create a new Internal Control measurement framework. We selected COSO Internal Control Framework to use its Internal Control elements as a base. We identified additional components to complement COSO’s: A Performance Management Framework for Objectives definitions and setting; A Petroleum Business Process Reference Model to analyze the controls embedded in its business processes which are required to achieve the business Objectives; and an Enterprise Architecture framework which gives a cubical view about all control elements for weighing and scoring purposes.Research Results: We propose an Integrated Internal Control Effectiveness Measurement Framework (ICEMF) supported by a calculation method and a series of derived algorithms. The outcome is an Index that can measure the effectiveness of Operational Internal Controls of different situations with extended flexibility.Originality/Value: It is a breakthrough in the Internal Control measurement domain. We are proposing a comprehensive index which provides internal and external stakeholders with the necessary insights about their companies’ operations to avoid accidents and to improve the likelihood of achieving the business objectives.Practical Implications: Companies would henceforth use the ICEMF Index combined with the Credit Rating agencies Indices to take better informative decisions related to managing, investing, acquiring, merging, insuring, restructuring and others. Research limitation/implications: The focus of this research is on the Oil & Gas Industry due the fact that one of the proposed pillars of the Index is a petroleum related model. Substituting this Reference Model by other Industry verticals reference Models will make ICEMF a generic Index for all types of industries. Keywords: Internal Control, Corporate Governance, Oil & Gas, Performance Rating, Internal Control Measurement.Research Type: Case Study / Essay