Internal Control System As A Neccessity To Survival And Growth In Public Organisation

Internal Control System As A Neccessity To Survival And Growth In Public Organisation

Chapter One

Preface

Background Of The Study

According to Oxford Learners Dictionary, association can be said to be a group of people who form a business, clubetc. together in order to achieve a particular end. It can also mean two or further people getting together for a purpose. In getting together, they decide to interact with one another to achieve the objects of the association( Unamka & Ewurum, 19951)

When we bandy association, we’ve variclasses among which are service association and social association etc. All these associations have in mind the end of continuing if not for eternity, a given period of time.( Unamka & Ewurum, 1995 1, 2, 3)

For an association to carry on its business there must be some factors put in place for the smooth handling of the association operation, man- power, accoutrements , plutocrat and machines. These need to be well coordinated in order for the success of the association to be achieved. They’re used by a group of persons known as operation; neither can operation live without association- the two are thick twin.( Unamka & Ewurum, 199565)

Good operation weaves together the colorful corridor of association so that all factors serve as a united body. operation refers to the group of directors or officers of a company who directs sweats towards common objects by using available coffers( Unamka & Ewurum, 199566) operation can also be said to be a process of planning, association to have an intergrated system that will prop the achievement of association objects( Musselman & Hughes, 1981)

Effective operation leads to purposeful, well coordinated, thing acquainted and thing directed conditioning. As earlier social associations have in mind “ durability ” and “ SURVIVAL ” as they’re being run for an association to survive and continue being without going void, or said to be illiquid, i.e. being its incapability to meet up with its liabilities as and when due, it must insure the safty of its means, cash and also the delicacy and trustability of its records, it should insure that it institutes a system of control, strong enough to insure similar. This system is what’s known as INTERNAL CONTROL SYSTEM.

According to WIKIPEDIA, the free encyclopedia, in account and association proposition, INTERNAL CONTROL is defined as a process effected by an association’s people and information technology(I.T) system, designed to help the association negotiate specific pretensions or objects. It’s a means by which an association’s coffers are directed, covered and measured. It plays an important part in precluding and detecting fraud and guarding the association’s coffers both physical(e.g. ministry and property) and intangible(e.g. Character and intellectual property similar as trade marks) the organizational position, internal co9ntrol objects relate to the trustability of fiscal reporting; timely feedback on the achievements of functional or strategic pretensions and compliance with laws and regulations. At the specific sale position, internal control refers to the conduct taken to achieve a specific ideal(e.g. how to insure the association payments to third parties are for valid services rendered)

There are also a variety of delineations of internal control as it affects a variety of constituencies( stakeholders) of an association in colorful ways.

Under the commission of financing association( COSO) internal control- integrated frame, a extensively- used frame work in the United States, internal control is astronomically defined as a process effected by an reality’s board of directors, operation and other labor force, designed to give reasonable assurance regarding the achievement of objects in the following orders Effectiveness and effectiveness of operations; trustability of fiscal reporting; and compliance with laws and regulations.

According to Millichamp( 200285), internal control system is defined as the whole system of controls, fiscal and else, established by the operation in order to carry on the business of the enterprise in an orderly and effective manner, insure adherence and operation programs, guard the means and secure as far as possible the absoluteness and delicacy of the records. Internal controls are to be an integral part of an association’s fiscal business programs and procedures. Internal control consists of all the measures taken by the association for the purpose of guarding its coffers against waste, fraud and inefficiency, icing delicacy and trustability in account and operating data, securing compliance with the programs of the association and assessing the position of performance in all organizational units of the association. Internal controls are simply good business practices.

Internal control according to Osita( 2002106) is the whole system of controls, fiscal or else, established by operation in order to secure as far as possible, the delicacy and trustability of the records, run the business in an orderly manner and guard the company’s means, its objects being the forestallment or early discovery of fraud and crimes. It may include internal auditing.

Everyone within the association has some places in internal controls. The places vary depending upon the position of responsibility and the nature of involvement by the existent. The Kansas Board of regents, chairman and elderly directors established the presence of integrity, ethics, capability and a positive control terrain. The director and department heads have oversight responsibility for internal controls within their units. directors and administrative labor force are responsible for executing control programs and procedures at the detail position within their specific unit. Each existent within a unit is to be conscious of proper internal control procedures associated with their job liabilities.

The internal inspection part is to examine the acceptability and effectiveness of the association internal controls and make recommendations where control advancements are demanded. Since internal auditing is to remain independent and objective, the internal inspection office doesn’t have the primary responsibility for establishing or maintaining internal controls. still, the effectiveness of the internal controls are enhanced through the reviews performed and recommendations made by internal auditing.

The institution of internal control system is an association isn’t without a purpose; these purposes will be bandied latterly in this sturdy. One of similar is to insure that the association survives, continue to live, grows, come vibrant in whatever terrain it might be being or located. It’s against this background that this sturdy seeks to unveil and look at the place, significance and ineluctable nature of internal control system on the survival and growth of an association.

Statement Of The Problem

When we relate to internal control system, we talk of a system which will enable an association achieve its objects, we talk of a system which is veritably important to the actuality of an association, we talk of a system which will avert the performance of acts that can act as a clog in the wheel to the success of an association. This system is an all round system, that’s to say, it encompasses both fiscal andnon-financial control in realizing the pretensions and objects of running the association in an orderly manner, securing the means of the association and also icing the delicacy and trustability of the association’s records.

We might not really understand the impact of internal control system on an association’s performance until presumably, we run an association void of internal control system. Thenon-institution of internal control system in an association is mischievous to the continual growth and survival of that association. Non institution of internal control system in an association result in indecorous keeping of records which could lead to the late medication of accounts, doctoring of books of accounts, misappropriation of finances which are meant to be used for planning, decision makingetc. illegal deals being transacted, pilferage, abuse of fixed meansetc. indecorous keeping of records can also lead to incapability to ascertain the association’s factual means; goods in stock, which could breed purloining.

Lack of proper record keeping, controlling of proceedings or conduct in an association could lead to concealing of crimes and fraud that might crop- up to bring down an association.

Thenon-institution of internal control system could lead to incapability of the association to make proper opinions and plan ahead effectively. When an association fails to plan, surely it’ll avert the growth of the association; make the association to start abating and floundering for survival, which will also bring the association to an end.

Objects Of Study

As earlier said that this sturdy of internal control isn’t without objects and as similar we shall see some of the objects for the institution of internal control system in an association. The objects of this sturdy are

To ascertain the extent to which fraud and crimes can be averted or detected beforehand.

ii. Highlight areas of under performance, weakness and specific failures connected to internal control system in order that corrections may be effected for performance to ameliorate.

Exploration Questions

The following exploration questions will be answered in this study

Does record keeping aid the proper handling of business?

ii. Does isolation of duties aid preventing crimes and fraud?

iii. Does your association carry out internal check or vouching?

iv. Are your fixed means used for other business outside your normal business

v. In what ways does internal control affect the survival and growth of an association?

Exploration Thesis

H01 There are no significant connections between internal controls and the orderly and effective handling of an association.

HA1 There live significant relationship between internal controls and the orderly and effective of an association.

Significance Of The Study

This exploration is on attempt to survey the formative corridor, which internal auditing can play in Nigeria with reference to public associations.

A lot of problems are facing public associations as not having an effective inspection central system. One of these problems is the operation seems to buff over the operation of the public associations, which are carried out in disorganized manner. This is so because an effective control system will enable the operation to cover the performances of the directors and take necessary and acceptable corrective conduct to insure high performances at all situations.

Compass Of The Study

This study focuses on internal control system as a neccessity to survival and growth in public organisation. Specifically, this study focuses on catching on the extent to which fraud and crimes can be averted or detected beforehand and pressing areas of under performance, weakness and specific failures connected to internal control system in order that corrections may be effected for performance to ameliorate.

This study will use staff of the Nigerian Television Authority, Lagos State as repliers for the check of this study.

Limitations Of The Study

The study has been limited by a number of factors notable among the limitations was our people’s poor response to exploration questions and reading meaning into any attempt at any form of interview.

It took experimenter important trouble to move some replier, that he’s not in anyway trying to find out the well or else they’re carrying out their work.

Capital Restrains This exploration bring the experimenter capital transport fares, buying of accoutrements and browsing the internet to gain further points.

Ignorance utmost of the repliers were ignorant of giving out information demanded by the experimenter, they were ignorant of the exploration purpose and allowed it’ll be used for negative reasons.

elusion of sequestration Some of the questions that was asked in this study appeared to be escaping the sequestration of the repliers, for this reason, the experimenter didn’t get all the cooperation he requires in order to conduct a good exploration

Description Of Terms

Internal Control Internal control, as defined by account and auditing, is a process for assuring of an association’s objects in functional effectiveness and effectiveness, dependable fiscal reporting, and compliance with laws, regulations and programs.