TABLE OF CONTENTS
REVIEW OF THE RELATED LITERATURE
OF INTERNAL CONTROL
RECORDING AND CUSTODY PROCEDURE
MANAGERIAL SUPERVISION AND REVIEW
FUNDAMENTALS PRACTICAL APPLICATION
PROTECTION OF ASSET IN CUSTODY
INTERNAL CONTROL PROCESS
OF PROGRAMME IMPLEMENTATION
EFFECTIVENESS OF CONTROL
REWARD PENALTY SYSTEM
THE DEVELOPMENT AND NEED FOR INTERNAL AUDIT
RESPONSIBILITIES OF INTERNAL AUDIT
FOR EFFECTIVE INTERNAL AUDIT
RESEARCH DESIGN AND METHODOLOGY
POPULATION AND SAMPLE SIZE
OF DATA COLLECTION
DATA PRESENTATION AND ANALYSIS
ANALYSIS OF RESPONSE TO QUESTIONNAIRE
TEST OF HYPOTHESIS
SUMMARY OF THE FINDINGS, CONCLUSION
The study of this internal control
system of an organization is like the study of an anatomy of man. In word of
Peter Druker” Good organizational structure dose not buy itself produce good
performance just like a good constitution dose not guarantee great presidents
or good laws a moral society. But a poor organizational structure makes good
performance impossible, no matter how good the individual managers”.
this dictum, it is therefore obvious that the organizational structures of an
establishment will greatly determine to what extent the organization is to be
managed. In some organizations, jobs are not properly defined, duties are not
efficiently assigned to the right persons and functions are sometimes
duplicated with the result that in fighting within the organization results in
sub-optimization. By this I mean that each staff and sub-manager try to impress
the management and often times to the detriment of the overall goal of the
internal control system ensures that functions/duties are properly defined and
that duties are properly are properly assigned to qualified staff and that
there is an inbuilt control in the system to ensure feedback, detection and
correction of errors in good time.
It is the
overall good of any organization to ensure its continued existence and growth
hence establishments set up certain units/departments in their organization to
ensure that its good is achieved to a reasonable degree.
internal audit is one such unit established by the management to ensure
compliance to policy instructions and to correct for correction deviation from
the management set guideline .it objectively examines, evaluates and reports on
the adequacy of the internal control, thereby ensuring efficient and effective
application of limited resources.
check is also another internal control tool employed by the management to
ensure that the objective of the organization is attained.
system of check internal audit and internal check, which is geared towards the
attainment of the organizations goal, is called internal control.
control has different definitions but most widely accepted is that of the
statement of accounting standard (SAS) which defined internal control as “not
only internal check and internal audit, but the whole system of controls,
financial and otherwise establi9shed by management in order to carry on
business of the company in an orderly manner, safeguard its assets and secure
as far as possible the accuracy and reliability of its records”. The internal
control system should be an open one and should be cheap, conveniently
manipulated by management to ensure completeness and accuracy of records and
also prevent or uncover errors and fraud. It should be based on the overall
view of the organization and should provide information for all uses of the
STATEMENT OF PROBLEMS
human endeavor, problems and difficulties will arise. Manufacturing is not an
exception to this rule
problems encountered include:
Inadequate capital and poor administration
General increase in all aspects of operational costs
Unsteady policy by government resulting in
Internal control breakdowns
Stringent loan conditions by banks
general problems are easily identified and are associated with under
development of the society. There is also the psychological angle, the problem
of dissatisfaction of workers and the attending strike action which often
result to loss of many hours and disruption of the entire system.
will be aimed at accomplishing the following objectives:
To examine the nature and scope of internal control
systems in a manufacturing establishment using Peco feeds as a case study
To ascertain whether the internal control systems in
use are appropriate and will lead to efficient management
To identify the principal problems associated with
workers dissatisfaction and recognize the implications of such problems for
To seek purpose oriented solutions and make
recommendations that will go a long way in solving the identified problems
SIGNIFICANCE OF STUDY
research work has been undertaken in such a way that students, researchers and
interested persons would be educated in the following areas:
The various internal control systems
The causes of breakdown in internal control systems
The effects of an efficient or inefficient internal
control systems on the management of an organization
Corrective measure to ratify an inefficient control
STATEMENT OF HYPOTHESIS
purposes of the study, the researcher wishes to states the following
That the internal control system in operation in Peco
feeds limited is adequate in the area of promotion and encouragement of
effective operational efficiency and adherence to management plans and policies
That the internal control, internal check and internal
audit in Peco Feeds Limited has been of immense help to the management both in
the areas of safeguarding the assets of the organization and the prevention of
questionable claims and payments
that the research provides the results, the following research problems, which
revolve around the basic elements of an effective and efficient internal
control, system would be utilized in testing the research hypothesis.
To what extent does the organizational structure and
responsibility sharing arrangement in Peco Feeds Ltd reflect the existence of
an effective an efficient control system?
How efficient is the internal control system in Peco
Feeds Ltd with regards to the safeguard of its fixed and other assets as well
as in the prevention of questionable claims and payments?
How efficient is the accounting system in use in Peco
feeds Ltd with regard to responsiveness to the organizational objectives as
well as in the area of accuracy and reliability of the financial records
prepared under the system?
To what extent has the existence of an internal audit
unit in Peco Feeds Ltd helped in the promotion of operational efficiency and
encouragement of adherence to management policies?
LIMITATIONS OF TERMS
human undertaking, there has to be a limitation. The limitation could be
internal or external; internal to the extent of the researchers ability and
external to the extent of things outside the control of the researcher.
undertaking finance and time has been the most constraining factor. Some others
include the usual Nigerian attitude to label every imaginable piece of
information as confidential or to secret.
DEFINITIONS OF TERMS
- this is defined as “not only internal check and internal audit, but
the whole system of controls, financial and otherwise, established by
management in order to carry on the business of the company in an orderly
manner, safeguard the assets and secure as far as possible the accuracy and
reliability of its records.
Internal check- this is defined as “the allocation of
authority and work in such a manner as to afford checks on the routine
transactions of day to day work by means of the work of one person being checked
or controlled independently by another “.
Internal audit: this is defined as “an independent
appraisal activity within an organization for review of accounting, financial
and other operations as a basis for service to management.
It is a
management controls which functions by measuring and evaluating the efficiency
and effectiveness of other control.
System: this is define is an organized or a complex
whole. It is a set of a complex related or a an arrange of essential principles
or facts arranged in a rational dependence or collection forming a coherent
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