THE IMPACT OF INTERNAL CONTROL SYSTEM ON THE FINANCIAL MANAGEMENT OF AN ORGANISATION

ABSTRACT

Over the years, there have being a problem of incorrect and unreliable

financial record which has lead to loss of organizational integrity. The

research work aimed among others at determining the relationship between

internal measures to proper accounting records. A survey research design

was adopted for this research study and a sample size was selected using

Yaro Yamane sampling technique as data used were obtained from both

primary and secondary sources. Four research questions were formulated

out of which three hypothesis were formulated using regression co-efficient

analysis method at 5% level of significance and the Z table was also used

for comparison between calculated value of significance B and tab le value.

The finding from the analysis indicates that internal control measure

management performance and is necessary for the growth and

effectiveness of the organization. Financial management of any

organization cannot do without internal control as true and fair presentation

of financial statement may never be possible if the board and senior

management are not committed to providing a well planned internal control

system. It also recommends that a periodical review of the organization

should be done by the management so as to cope with the model trends in

organizational fraud prevention.7

TABLE OF CONTENTS

Cover page

Title Page i

Dedication ii

Acknowledgement iii

Approval Page iv

Abstract v

Table of contents vi

CHAPTER ONE

INTRODUCTION

1.1 Background of the study 1

1.2 Statement of problem 3

1.3 Objective of the study 4

1.4 Research Questions 5

1.5 Statement of hypothesis 5

1.6 Significance of the study 7

1.7 Scope of the study 7

1.8 Limitation of the study 8

1.9 Definition of terms 88

1.10 References 10

CHAPTER TWO: LITERATURE REVIEW

2.1 Introduction 11

2.2 Internal control 11

2.3 Role and Purpose of internal control 13

2.4 Types of Internal control 15 2.5

Function of internal control 19

2.6 Internal control in financial institution 20

2.7 Element of a good internal control system 24

2.8 Relationships between internal auditing and internal control

system. 27

2.9 Management and internal control system 28

2.10 Defect and shortcoming of internal control 29

2.11 Possible solution to defects internal control system 31

2.12 Limitation of internal control 32

CHAPTER THREE 34

3.0 Research methodology

3.1 introduction 34

3.2 Research design 349

3.3 Sources of data 34

3.4 Area of study 35

3.5 population of the study 35

3.6 sample size and sampling technique 35

3.7 Research instrument 36

3.8 Validation and Reliability of instrument 37

3.9 Method of data analysis 37

CHAPTER FOUR

4.0 Data Presentation and analysis 40

4.1 introduction 40

4.2 Data Presentation 40

4.3 Test of hypothesis 45

CHAPTER FIVE

Summary, Conclusion and Recommendation 54

5.1 Summary of findings 54

5.2 Conclusion 54

5.3 Recommendation 55

Bibliography 57

Appendix 59

Questionnaire