ABSTRACT
The
constant failure of many organization resulting from fraud due to loopholes in
the Accounting system of the organization calls for a proper understanding of
the “Internal control System” and its impact on manufacturing organization. Internal control System has remained the
bedrock for organization or management efficiency. The objectives of these
study is to find out what makes the Internal control System of a manufacturing
company, to examine critically the impact of Internal control in the management
of the company under these study to access the strength and weakness of
Internal control System in the manufacturing organization, to make necessary
recommendation on how to correct lapses in Internal control which may be discovered at the course of the
research. Method of data collected, was done through questionnaire oral
interview and other relevant literature. Data collected were properly analyzed
and frequency table was used in the analysis. The techniques adopted was random
sampling techniques, used to get total number of forty (4) staff out of which
ten (10) of them were management staff who were interviewed and the rest were
given questionnaires. The major findings of this research work states that good
accounting system of the company is product of its Internal control System.
Recommendation state that, it is imperative that companies should operate with
effective Internal control System.
TABLE OF CONTENTS
Title page
Approval page………………………………………………………………………i
Dedication …………………………………………………………………………ii
Acknowledgement ………………………………………………………...………iii
Abstract………………………………………………….…………………………iv
Table of content
……………………………………………………………………v
CHAPTER ONE
Introduction ……………………………………………………………..…………1
1.1
Background of the study…………………………………………………..……1
1.2 Statement of the problem………………………………………………………2
1.3 Objective of the study………………………………………….………………2
1.4 Significance of the study………………………………………………………3
1.5 Research Question …………………………………………….………………4
1.6
Research Hypothesis………………………………………..…………………4
1.7
Scope of the study……………………………………………..………………5
1.8
Definition of terms……………………………………………………………5
CHAPTER TWO
REVIEW OF RELATED LITERATURE
2.1 Research Question …………………………………………………..………7
2.2 Current Literature on Theories and Models…………………………………7
2.3 Summary of the literature Review …………………………………………24
CHAPTER THREE
Research Methodology………………………………….…………………29
3.1 Research Design ……………………………………………..……………29
3.2 Area of the study……………………………………………………...……29
3.3 Population of the study…………………………………………..…………29
3.4 Sample size of the study……………………………………………………30
3.5 Instrument for data collection ……………………………...………………30
3.6 Validation of the instrument ………………………………………………31
3.7 Distribution and Retrieval of the
instrument ………………………………31
3.8 Method of Data Analysis…………………………………………...………32
CHAPTER FOUR
4.1 Data presentation and Analysis……………………………………………33
4.2 Discussion of findings ………………………………………..……………47
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION
5.1 Summary of findings………………………………………..…………...…48
5.2 Conclusion ………………………………………..…………………..……49
5.3 Recommendations………………………………………….....……………49
5.4 Limitations of the study……………………………………………….……50
5.5 Suggestions for further Research …………………………………….……50
References…………………………………………………………….……52
Appendix A…………………………………………………………...……53
Questionnaire ……………………………………………………..….……54
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND
OF THE STUDY
Internal control is an indispensable
element in the life of any organization, organization cannot meet it’s
objectives very well without having an internal control. The need to install
internal control becomes imperative due to the increase in size and complexity
of the activity of the modern organization. The installation of internal
control has a lot of impact on manufacturing organization.
Control on the other hand has been
identified as one of the essentials of management functions. It is difficult if
not impossible to talk about management without control. Control according to
Robert. C. apple is an activity that involves checking to see that plans have
carried out and derivation attended to control therefore is one element of
management to serious organization has it own idea of control over finances,
control over expenditure tangible assets and the internal control originated
from control.
The statement number one of the institute
of chartered internal control as one consisting of one only internal check nd
internal audit but the whole system of controls, financial or otherwide
established by management in order to carry on the business in an orderly
manners.
internal control can simply be defined as
all measures used by management to regulate and control the affairs of the
business without an internal control an organization is likely to be effective
and too costly to operate due to constant occurrence of fraud. Regardless of
the size, type and occurrence of structure of any organization manger and
accountants should know the rudiment of it’s accounting system and internal
controls. This will help the managers and other staff to operate the
organization effectively and efficiently.
1.2 STATEMENT OF PROBLEMS
* Does internal
control give rise to organization efficiency and good management?
* Is it possible to have a good accounting system
without an internal control system?
* Can the organization achieve its objectives without
internal control?
1.3 OBJECTIVE
OF THE STUDY
1 To find out what makes up the internal
control system of a manufacturing organization.
2 To examine critically the impact of
internal control in the management of the company understudy.
3. To access the strength and weakness of
internal control system in the manufacturing organization.
4. To make necessary recommendation on how
to correct lapses in internal control which may be discovered at the course of
the research.
5 To increase the knowledge of the
research on the internal control system of a manufacturing organization.
1.4 SIGNIFICANCE
OF THE STUDY
1. The study will equip the direction of the
company with all the necessary principles, design implementations and the
operations of a good internal control system.
2. This will help the workers of the company
to know their shortcomings and that of internal control system and hence put
corrections in place.
3. The researcher after the study will have
a broad knowledge of the role of internal control system in management.
4 The investors will equally gain from
this study because they are sure that investment in the organization is well
secured against fraud.
5 Finally, this study will also serve as
reference literature to future researchers.
1.5 RESEARCH
QUESTIONS
1. What constitute the internal control
system of organization?
2. How effective is the internal control
system of the organization and to what extent is the organization staff
complying to it?
3 Does reliability to accounting
information depends in internal control.
4 Does internal control assists the
external auditor in auditing the organization?
5 Does installation of internal control
serve as a check on the activities of the staff of the organization?
6 Does installation of internal control
prevent the occurrence of fraud in the organization?
1.6 RESEARCH
HYPOTHESIS
According to Willy Nnamani (2007) to
effective find a solution or a useful result to the problem, the following
hypothesis were formulated.
1. The low installation of internal control
serves as a check on the activities of the staff of the organization.
2 Due to the issue or consistent failure
of many organization constitute the internal control system in some
organization.
3. The low installation of effective
internal control system serves as a loophole in preventing occurrence of fraud
in the organization.
4. How does internal control system assists
the external auditors in auditing the organization.
5 The declining force of internal control
system in some organization has made the staff not complying to it.
1.7 SCOPE OF
THE STUDY
The study impact of internal control
system on manufacturing organization is limited only to the internal control
system of Nigeria
bottling company Plc Onitsha, Anambra state. Due to many limitation, the
researcher encountered while striving to make a through research.
1.8 DEFINITION
OF TERMS
* INTERNAL
CONTROL: It is all measure used by management to regulate and control the
affairs of the business.
* FINANCE:
It is an issue of distribution of and purchase of liability and equity claims
for the purpose of generating revenue producing assets.
* ASSETS:
Anything owned by a person, company etc, that have money value and that may be
sold to pay debts.
* CHARTERED
ACCOUNTANT: He is a member of professional body recognized by any act or
degree of federal republic
of Nigeria.
* INTERNAL
CHECK: It is an aspect of internal control system and it is an arrangement
in which a person work is complementary to the work of another person.
* INTERNAL
AUDIT: It is the type of audit
conducted by an employee of a business into any aspect of it’s affairs and in
compliance with the accounting system and objective of the business.
* FRAUD:
It
is the misappropriation of the asset internal falsification of the books of
accounts other records of the business organization.
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