ABSTRACT
This study focused on internal control system in a computerized accounting environment. The objectives of the study were to; examine the effect of computerized accounting system on the effective performance of internal control unit in first bank Plc. To evaluate the extent of application of computerized accounting system in first bank Nigeria Plc. To determine the influence of internal control system in a computerized accounting environment and to identify the factors militating against internal control system in a computerized accounting system. To achieve these objectives, primary source of data was through the use of a well structured questionnaire. The questionnaire was distributed among sixty staff of first bank Nigerian plc. The empirical result of the study showed that there is significant effect of computerized accounting system on the effective performance of internal control unit in first bank Plc. Also that First bank Nigerian PLC do apply computerized accounting system in internal control unit. Finally there is significant influence of internal control system in a computerized accounting environment. We therefore concludes that the effect of computerized accounting system on the effective performance of internal control unit in first bank Plc include; It promote automation of computerized accounting system, computerized accounting system enhance accounting accuracy, computerized accounting system aid data access, computerized accounting system encourage accounting reliability, scalability can be achieved through computerized accounting system. Also that computerized accounting system is applied in first bank Nigeria Plc. Ba bvh se on the analysis I recommend the following: The organization should make funding’s available for the staff. The right information system should be provided to the staff. Control systems policies and procedures should be accommodating and finally, the staffs should be provided with strong internal control system and also the leadership should try and be more effective.
TABLE OF CONTENTS
Cover page
Approval page i
Certification ii
Dedication iii
Acknowledgement iv
Table of contents v
List of tables viii
Abstract ix
CHAPTER ONE
INTRODUCTION
1.1
Background to the Study 1
1.2
Statement of the Problem 2
1.3 Objectives
of the Study 3
1.4 Research
Questions 4
1.5 Research
Hypotheses 4
1.6
Significance of the Study 5
1.7 Scope/Limitations of the
Study 6
1.8 Definitions of Terms 6
CHAPTER TWO
LITERATURE REVIEW
2.1.1 Internal
Control= 7
2.1.2 Objectives
of Internal Control System 8
2.1.3 Types of Internal Control System 9
2.1.3.1 Administrative Controls 9
2.1.3.2 Accounting
Controls 9
2.1.4 Components
of Internal Control Measure 10
2.1.5 Measure
of Internal Control Strategies 10
2.1.6 Computerized
Accounting Systems 12
2.2 THEORETICAL
FRAMEWORK
2.2.1 Agency
Theory 13
2.2.2 Stakeholder’s Theory 14
2.2.3 Stewardship Theory 15
2.2.4 Institutional Theory 15
2.2.5 The Theory of the Firm 16
2.2.2
Contingency Theory 17
2.3 Empirical Review 17
2.4
Summary of Review of Related
Literature 19
2.5
Gap in Literature Review 20
CHAPTER THREE
METHODOLOGY
3.1 Research Design 21
3.2 Sources of Data 21
3.3 Population of the Study 21
3.4 Sample Size Determination 21
3.5 Validity
of the Instruments/ Reliability of the Instruments 22
3.6 Method
of Data Analysis 22
3.7
Data Analysis Techniques 22
CHAPTER 4
DATA PRESENTATION,
ANALYSIS AND INTERPRETATION
4.2 Data Presentation 26
4.3
Test of Hypotheses 31
4.4 Discussion of Results 35
CHAPTER 5
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1 Summary 37
5.2
Conclusion 37
5.3 Recommendations 38
REFERENCES 39
APPENDIX 39
LIST OF TABLES
Table 4.1: Distributed
and Return of the Questionnaire 24
Table 4.2 Distribution of
Respondents According to Gender 24
Table 4.3 Distribution of Respondents According to Age 24
Table 4.4: Distribution
of Respondents According to Years of Experience 25
Table 4.5: Distribution
of Respondents According to their Academic Qualification 25
Table 4.6: Distribution
of respondents according to their Marital Status 26
Table
4.7:To examine
the effect of computerized accounting system on the effective
performance of internal control unit in first bank Plc 26
Table
4.8: To evaluate
the extent of application of computerized accounting system in first
bank Nigeria Plc 28
Table
4.9: To determine
the influence of internal control system in a computerized accounting
environment 29
Table 4.10: identify
the factors militating against internal control system in a computerized
accounting system. 30
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Internal controls system comprised of
set of rules, policies, and procedures an organization implements to provide
direction, increase efficiency and strengthen adherence to policies. These are
important for achieving the business objective. The development and application
of information technology (IT) makes it possible for companies to support
operations with information technology systems in order to improve operating
performance. The approval, recording and processing of transactions, as well as
the generation of reports can be automated, to ensure operational effectiveness
and efficiency, financial information reliability, and legal compliance. Internal control system helps to safeguard
business assets from stealing and wastage by ensuring the compliance with
business policies and the law of the land (Nduka, 2015).
Companies have to adjust the
techniques and methods of internal controls in accordance with computerization,
in order to exercise effective controls. The internal control techniques used
in an information technology environment are quite different from those used in
a manual environment. Transactions are automatically triggered or executed in an
information technology environment, and the internal controls are supported with
information technology. Therefore, the internal control techniques in a manual
environment cannot be migrated to an information technology environment (Alambo, 2016)
Internal control system differs from
one business organization to another depending on the nature and size of the
business. To achieve the objective of a business, proper execution of business
activities in the light of prevailing laws and socio-economic condition of the
country is called an internal control system or structure. The internal control
system is introduced to avoid errors and frauds and for systematic control of
business activities. The plan of organization and all of the coordinate methods
and measures adopted within a business safeguard its assets, check the accuracy
and reliability of its accounting data, promote operational efficiency and
encourage adherence to preserved managerial policies (Ekechi, 2014).
With computers becoming extensively
used in business today, it is obvious that accounts which were earlier
maintained in a manual form will be gradually replaced with computerized
accounts. The speed with which accounts can be maintained is several fold
higher. Basic difficulties faced like balancing of trial balance, correct
posting into the general ledger and subsidiary ledger is a thing of the past.
The only concerns that has increased today are concerns for controls, security
and integrity of the computer system as more and more information is stored not
in the hard print but as soft copies inside the computer. Issues like
unauthorized access to the data either through the local area network or
through the internet by hacking into the company server are becoming potential
threat to the computer usage. It is against the background that the study
intends to examine internal control system in a computerized accounting
environment with particular reference to First Bank Nigeria Plc.
1.2 Statement of the Problem
The
accountancy profession now faces a challenge to recover trust and respect. The
reputation of the profession has been damaged by high-profile scandals such as
Enron, WorldCom and Parmalat. Those scandals have created some suspicion of
accountants among the public on the competence of auditors and the accountancy
profession as a whole. Internal controls have been a very important topic in
recent years. Many people have postulated that one major critical success
factor of any competitive business is its effective internal controls. The
world is now a global village as predicted due to the Information and Computer
technology (ICT). Sophisticated ICT has become integral part in modern
accounting information systems and management information systems. This has
affected the traditional procedures auditors employ to perform their
procedures. Normally, though, they only possess ordinary skills to work with
Computers. Their competence and professionalism to take up engagements in the
face of the sophistication in ICT use that is fast complicating the internal
control environments are called to question. Auditing procedures in identifying
risks, fraud and errors by making inquiries of and testing internal controls
within the entity have changed as a result and therefore the competence and
skills of the auditor must change to suit the circumstance to minimize audit
risks that would add to the worsened reputation of the profession.
Information
and Computer technology (ICT) has become integral part to any modern accounting information systems. ICT,
however, is a high risk discipline due to high level of vulnerabilities and
threats. A key emphasis of auditing
procedures is identifying risks, fraud and errors by making inquiries of and
testing Internal controls within the entity in order to place some reliance on
internal reports and associated management assertions. Auditors’ responsibility
in identifying fraud has now been acknowledged by regulatory standards and the
law. It has become critical that auditors are fully aware of the impact of ICT
issues on the audit of a client’s financial statements in how ICT is used by a
client to gather process and report financial information. It is against this
problems that the study posits to examine internal control system in a computerized
accounting environment with particular reference to First Bank Nigeria Plc.
1.3 Objectives of the Study
The
main objective of the study is to examine internal control system in a
computerized accounting environment with particular reference to First Bank
Nigeria Plc. The specific objectives of the study include to;
i.
examine the effect of
computerized accounting system on the effective performance of internal control
unit in first bank Plc.
ii.
evaluate the extent of
application of computerized accounting system in first bank Nigeria Plc.
iii.
determine the influence
of internal control system in a computerized accounting environment.
iv.
identify the factors
militating against internal control system in a computerized accounting system.
1.4 Research Questions
Based
on the objectives above the researcher asked the following questions;
i.
Does computerized
accounting system influence the effective performance of internal control unit
in first bank Plc?
ii.
To what extent does first
bank Nigerian plc apply computerized accounting system in internal control
unit?
iii.
What are the influence of
internal control system in a computerized accounting environment?
iv.
What are the factors
militating against effective internal control system in a computerized
accounting system?
1.5 Research Hypotheses
To
achieve the above objectives, the following hypotheses will be tested.
H01:
There is no significant effect
of computerized accounting system on the effective performance of internal control unit in first bank Plc.
H02:
First bank Nigerian PLC does not apply
computerized accounting system in internal control unit
H03: There is no significant influence of
internal control system in a computerized accounting environment
H04: There are no factors militating against
effective internal control system in a computerized accounting system
1.6 Significance of the Study
The significance of any study
entails the immediate beneficiaries and the benefits as well as how they will
benefit from it. Thus far this research work would be valid to the following
set of people.
Shareholders/Investors- It would assist existing
shareholders and potential investors to make appropriate judgments as regards
their investments and profitability.
Future researchers- They will be able to apply this
research to carry out further studies in the same area or related areas. The
study is expected to be of very great importance to the researchers simply
because after the completion of this research study the researchers will be
able to use this research study as a reference to what they will do in future
not forgetting that it will be used as a source of literature review to their
studies.
The
research would be beneficial to the government in the sense that it is going to
help us expose some of the experiences Nigeria has acquired in the course of
internal control management. This study
is also meant to be beneficial to the policy makers, business investors,
bankers, financial managers and the general public.
1.7 Scope/Limitations of
the Study
This study will cover the internal
control system in a computerized accounting environment with particular reference
to First Bank Nigeria Plc. The study will cover a period of 2014 to 2018.
1.8 Definitions of Terms
Internal control: The internal control has been the
ability of the management of an organization to organize direct and control all
the activities of workers and other members of staff.
Accounting control: These comprises the plan of
organization and the procedures, measures and records that are concerned with
the safeguarding of assets and the reliability of financial records and
consequently are designed to provide reasonable assurance that transactions are
executed in accordance with management general or specific authorization.
Administrative control: administrative control is not
limited to the plan of the organization and the procedures and records that are
concerned with the decision processes leading to management authorization of
transactions.
Profit After-Tax: Profit after-tax is the earnings of a business after all income taxeshave been deducted
Return on Equity: Return on equity (ROE) is a measure of financial
performance calculated by dividing net income by shareholders' equity. Because shareholders' equity is equal to a company’s
assets minus its debt, ROE could be thought of as the return on net assets.
Return on Assets (ROA): Return on assets (ROA) is an
indicator of how profitable a company is relative to its total assets.
Computerized Accounting
Environment: Business owners and managers can use computerized accounting
systems to create a more secure environment for their financial information.
Click “DOWNLOAD NOW” below to get the complete Projects
FOR QUICK HELP CHAT WITH US NOW!
+(234) 0814 780 1594
Login To Comment