TABLE OF CONTENTS
Title
Page
Certification
i
Dedication
ii
Acknowledgement
iii
Abstract
iv
Table
of Contents vii
Chapter One
1.0 Introduction 1
1.1
Background of the Study 1
1.2
Statement of the Problem 2
1.3
Significance of the Study 2
1.4
Objectives of the Study 3
1.5
Scope and Limitations 5
1.6
Research Question 5
1.7
Hypothesis Formulation 6
1.8
Definition of Terms 6
Chapter Two
2.0 Literature Review 9
2.1
General Background 9
2.2
Types of Internal Control 11
2.3
Elements in Classification of Internal Control 12
2.4
Features of a Good Internal Control in an
Organisation 12
2.5
Internal Audit Department 15
2.6
Internal Control 16
2.7
Working of Internal Control in Unilag
Consultancy 18
2.8
Types of Internal Control Adopted by the
Organisation 20
Chapter Three
3.0 Research Methodology 24
3.1
Introduction 24
3.2
Research Instrument 24
3.3
Design of Questionnaire 25
3.4
Population 26
3.5
Limitation 27
3.6
Research Design 27
3.7
Sources of Data 28
Chapter Four
4.0 Analysis and Interpretation 30
4.1
Introduction 30
4.2
Evaluation of Data Collection 30
4.3
Analysis and Interpretation 31
4.4
Statistical Analysis 47
Chapter Five
5.0 Summary,
Conclusion and Recommendation 50
5.1
Summary 50
5.2
Conclusions 51
5.3
Recommendations 52
References 54
CHAPTER
ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF STUDY
In modern business organization, internal control system
is required in one form or the other, not only in public institution which this
research work is concerned about the even in some private establishment which
exercise control over their activities without being conscious of it.
Since there controls are not specified or spelt out
properly, it is therefore not surprising that many organizations, particularly
large ones are showing more interest in control system as an aid or instruments
to efficient management.
Internal control is necessary because it will guide
against fraud and error in order to safe assets. It will also help in making
sure workers comply the management’s policy.
In time past, emphasis has been placed in the area
of financial control which is also a type of internal control and only putting
their mind on benefit that can be derived from the financial aspect ands
forgetting that benefits that can be derived from the financial aspect and
forgetting that benefits can also be derived from other kinds of internal
control like; organizational controls, authorization and approval controls,
supervision controls might be very important because it deals with ensuring
accuracy and reliability of accounting record and so is essentials as far as
management and auditing are concerned.
1.2 STATEMENT OF PROBLEMS
It is a well known fact that most of the public
institutions and also other kinds of institutions have been grossly involved in
financial mismanagement, frauds, deviation from prescribed management policies
and principles as well as presentation of unreliable accounting records and
financial statement which is due to inadequate internal control system in an
organization. It is therefore necessary to examined and analyse internal
control system in institutions with problems, noted solutions and suggestion would
be offered which will guide against them.
1.3 THE SIGNIFICANCE OF THE STUDY
There is need for the evaluation of internal control
because of the fact that internal control system involves judicious use of
resources to yield efficient result, so there is a need for people to know how
to use their resources judiciously.
This research work will give a clear picture of the
nature of internal control system in government institution and what steps to
be taken whenever deficiency exist, it will lead to identification of weakness
and suggestions to strengthen such weakness. This will serve a long way in
improving the accountability of government revenue and expenditure as well as
reducing financial waste. The significance of the study is as follows:
a.
It goes a long
way to reducing financial mismanagement in an organisation.
b.
It helps to use
our available resources in an efficient and effective manner.
c.
It also helps in
safeguarding the assets of the organisation.
d.
Also it reduces
drastically, the rate of fraudulent practice in an organisation.
1.4 OBJECTIVE OF THE STUDY
A well designed, adequate and properly implemented
internal control system is very important for the longevity and growth of every
organisation. It is on this, that the researcher find it necessary that there
is a need to examine on appraise the quality of internal controls system in
operation in government establishment form time-to-time.
The objectives of the study will be:
i.
To examine the
effectiveness of internal control system institutions.
ii.
To identify
important internal control measures necessary in any standard accounting
system.
iii.
To outline the
internal control system in named institutions and also the standard internal
control system and compare both.
iv.
To identify
their weakness and offer suggestions for improvement.
v.
To determine
whether managerial or human control are sufficiently strong to compensate for
the limitations in the present system of internal control.
The research is to give more understanding on
internal control, which is an indispensable aspect of any organisation. It
should also throw more light on the meaningless, necessity, features an types
of internal control and also make any persons going through it to know the type
of internal control for a particular organisation.
1.5 SCOPE AND LIMITATION OF STUDY
This research work will look into how internal
control is being used ass an instrument for achieving management control in the
public institutions.
This study will be limited to work in the Unilag
Consult. It will be limited to the degree and extent of data availability, time
constraints and extent to which questionnaires given out are completed and
returned by the staff. Also worthy of mentioning, is the financial and time
constraints on the part of the research in carrying out the study.
1.6 RESEARCH QUESTIONS
Looking at all there, it is therefore necessary to
examine and analyse their problems with the following questions in our minds
with a view of suggesting solutions to their problems in our public
institutions (Unilag Consult).
i.
What are the
existing accounting internal control weakness of the organisation?
ii.
Are there
adequate implementation of the system?
iii.
What are the
calibers of person(s) involved in the control system?
iv.
Are there proper
accounting systems in place that can effectively aid the control system?
v.
Are the control
properly monitored and periodically reviewed and evaluated?
1.7 HYPOTHESIS FORMULATION
Hypothesis and periodically into:
i.
Null-hypothesis
(Ho)
ii.
Alternative
hypothesis (Ha)
Ho: There is no
relationship between the internal control and management control system.
Ha: There is a
relationship between the internal control and management control system.
1.8 DEFINITION OF TERMS
Audit:
This is an independent examination of the expression or opinion on the financial
statement of an enterprise by an appointed auditor in pursuance of that
appointment and in compliance with any relevant statutory obligation.
Auditors: He
is an individual or firm carrying out the audit of an enterprise and the
partner of such firm who is appropriate.
Internal Control: They
are the whole system of control financially and otherwise established by
management.
-
To carry on
business is an orderly and efficient manner
-
To ensure
adherence to management policy
-
To secure as far
as possible the accuracy and reliability of records.
-
To safeguard the
assets of the business
Internal Audit: This
is defined as continuous review of operation and record undertaken within a
business by specially assigned staff.
Supervisory Control: This is the type of control that rests with the
managers themselves. The system deserves surveillance to see that the control
is working as prescribed and see if changes are needed. S
Documentary Control: This is immediate complete and hamper proof
recording which includes; cash register, sales invoice, purchase order,
subsidiary ledgers, formal and bank reconciliation.
Segregation of Duties: This is the involvement of several people
responsible for recording and processing of a complete transaction so as to
reduce the risk of international manipulation or accidental error and also
increasing the elements of checking at work.
Physical Control: This is to ensure that only the
proper person is given access to the custody of an asset.
Arithmetic and Accounting: This type of control ensures that the records of the
organisation are accurate and reliable.
INTERNAL CONTROL QUESTIONNAIRE (ICQ)
Internal control questionnaire is the list of
control questions that are carefully produced to test the existence of internal
control system in an organisation.
INTERNAL CONTROL EVALUATION QUESTIONNAIRE (ICEQ)
Some audit firms use internal control questionnaires
exclusively, while other firms prefer to ascertain the clients system by
questioning staff and record the system by means of other methods like
flowcharts or written note. The (ICEQ) internal control questionnaire, and
which ensures that all the right questions are asked to bring out the
strengthen and weakness of a system.
Intern Check: These
are those internal control generally exercised on a day-to-day basis, which
ensure that no single individual or groups of individuals is responsible for
carrying out a transaction from its origin to its conclusion. They are
controls, which ensure that the work of one person is independently proved to
that of another person. The main objective of internal checks is to minimize
the risk of fraud and error.
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