Internal Controls and Financial Reporting Accuracy in Hotels: The Role of Management Commitment and Employee Training

This study examines the mediating role of management commitment and employee training in the relationship between internal control systems and financial reporting accuracy in the Ghanaian hotel sector. The study uses an exploratory quantitative research design and structured questionnaires to capture data from 402 employees in the hotels in the Sekondi-Takoradi area. Based on the PLS-SEM analysis, the study found a positive relationship between internal control systems and the accuracy of financial reporting, where management commitment acts as a mediator. However, employee training was found not to be a significant mediating factor in the relationship. These results show the necessity of top management’s engagement in developing and sustaining effective internal control systems for enhancing financial reporting and reliability in the hospitality sector. The study presents practical implications for policy and practice, where hotel managers are encouraged to pay attention to internal controls and management's commitment to improve their employees' training to correct reporting of financial statements. Several practical implications are outlined for the hotel managers as well as the regulatory bodies, especially the provision of increased management, training, and compliance checks to enhance internal control mechanisms. This research advances the understanding of corporate governance in hotels and the context of developing countries. Future research should explore the role of digital accounting systems and AI-driven financial controls in improving financial reporting accuracy.