study investigated the effectiveness of internal control system in an
organization (A Case Study of Dangote Group of Companies). The study employed
primary data collected from the employees of Dangote Group of companies in LagosState.
primary data used for the study were collected through questionnaire
administered to the respondents.
study employed use of Chi-Squared in analyzing the data collected in testing
the hypothesis on the importance and contribution of internal control
department to the organization and on
how it safeguard the resources of
Title Page i
Table of Contents vi
1.1 Background of the Study 1
1.2 Statement of Problem 2
1.3 Objectives of the Study 3
1.4 Research Questions 3
1.5 Research Hypotheses 4
1.6 Significance of the Study 4
Research Methodology 5
Scope and Limitation of Study 6
Organisation of the Study 6
Definitions of Terms 7
CHAPTER TWO: LITERATURE
2.0 Introduction 10
2.1 Meaning and Definitions 11
of an Internal Control System? 13
2.3 Elements of Control Procedures 15
2.4 Design of Internal Controls 21
Controls in the Various Areas of A Business 25
2.6 Inherent Limitations of Internal Control 52
2.7 Stages of Internal Control Audit 53
2.8 Important of Internal Controls 56
CHAPTER THREE: RESEARCH
DESIGN AND METHODOLOGY
3.0 Introduction 58
Research Design 58
3.2 Source of Data Collection 58
3.3 Population of Study 59
Sample Size 60
Sample Distribution 60
Instrument of Date Collection. 60
Method of Data Presentation 61
3.8 Method of Data Analysis 61
3.9 Validity Test and Reliability of Instrument
CHAPTER FOUR: DATA PRESENTATION AND
4.0 Introduction 63
4.1 Administration and Retrieval of
CHAPTER FIVE: SUMMARY
OF FINDING, RECOMMENDATIONS AND CONCLUSION
5.1 Summary of Finding 81
5.3 Conclusion 83
5.4 Suggestion for Further Studies 83
OF THE STUDY
control system came into use as a necessity in any organization especially
large organizations to harmonise and secure both the physical assets as well as
the financial fund for effective and efficient management of any organization
to achieve the set objectives and goals. And for sound organization an internal
control system department is necessary and the overall purpose of internal
control is to help a department achieve its mission and accomplishment through:
Promoting orderly, economic efficient
and effective operation
Produce quality products services
consistent with the department mission.
Safeguard resources against loss due to
waste, abuse, mismanagement, errors and fraud.
Promotes adherence to statutes
Develop and maintain reliable financial
and management data, and accurately report that data in a timely manner.
An internal control system is the process that an
administrator uses to provide reasonable assurance that the unit's goals and
objectives will be achieved. Rick Hayes(2005) It is the management of business
risks and is a dynamic process that changes as personnel and circumstances
change. The system includes organizationaldesign, written policies and
procedures, actual operating practices, physical barriers to protect assets and
all personnel. The system should be designed to discourage occurrences of
errors or irregularities and to identify, within a reasonable time frame,
errors or irregularities that may occur. The internal control system
encompasses a variety of internal controls such as background checks of
prospective employees for sensitive positions to locking the door when the
office is closed for the evening. The internal control system provides for
safeguarding of assets, proper recording of transactions, and the efficient and
effective accomplishment of the unit's and organization goals and objectives.
1.2 STATEMENT OF PROBLEM
The management of various organization has failed to
recognize the effect of internal control in an organization in the overall
maintenance of organizations goals and objectives. This has led to inefficiency
and lack of proper co-ordination on the part of management.
It led to
inefficiency and lack of proper coordination .
It led to loss
of fund both in assets and in manpower.
It also hinder
corporate objectives of the company.
It is awell known fact that the enterprise or
management level of an enterprise are entrusted with the management of both
material and human resources of their establishment, if the management and
others in charge are not brought under some controlthe ultimate consequence of
this is that much of the resources will be indiscriminately mismanaged. Some
will even, collide with other customers or clients to embezzle their organization’s
funds to the detriment of the business or even to the shareholders. This is why
it is very necessary for an internal control system to be establishedin any
organization to see to the proper and efficient management of company assets
1.3 OBJECTIVESOF THE STUDY
The main purpose of this study will among others
To determine the
mode of internal control system and
To ascertain the operation and effect of internal
control in the operation of an organization.
To provide a
basic understanding of internal control system and its procedures.
To ascertain how
the functions ofinternal control can contribute to the overall performance of
To prescribe the
qualification of those to be engaged in the internal control system of an
1.4 RESEARCH QUESTIONS
Based on the purpose of the study, the following
questions are raised to provide a guide and solution to the research problems.
How effective is
the operation of internal control department in any organization.
What are the
basic objectives of internal control department and its procedure.
How doe the
functions of internal control department contribute to the overall performance
of an organization.
1.5 RESEARCHS HYPOTHESES
In carrying out this research work, these conceptual
statements are made to serve as a guide on which the work will be anchored or
(a)Ho: The internal control department has no
performance effect on the management of the organization.
Hi: The internal control
department has performance effect on the management of the organization.
(b) Ho: The internal control department played does
not played any important role in the safeguarding the resources of the
Hi: The internal control
department played an important role in the safeguarding the resources of the
1.6 SIGNIFICANCE OF THE STUDY
It is of the view, when this work or research is
concluded the study will be aid to or relevant to any organization that values
performance to evaluate and contribute to the effectiveness of the internal
control system. It will also help to highlight the impact of internal control
in an organization, and this can be seen in the following ways.
Internal control department could be seen as the
watch dog to the management of an organization on the ground that it will
contribute to the successful and timely implementation of the management
policies as well as safeguarding assets and ensuring financial accountability
of the employer in an organization.
An effective internal
control system enhance effective and
adherence to the laid down rules.
It helps in
achievement of financial accountability of all the staff of an organization.
of internal control department encompasses all segments of the organization,
hence, any negative internal control department and the management will have a
devastating effect on the generality of the organization
This is good to carried out the sample size and it’s
characteristic the construction of the research instrument. The data gathering
procedure, the data collection involving both primary and secondary sources.
The primary source which is going to be the direct information from the company
(organization) this is the administering of questionnaire and personal
Secondary sources information gotten from already
existing materials that are related to this topic study. That is from
textbooks, journals and internets.
1.11 SCOPE AND
LIMITATION OF STUDY
In view of the financial implication and time
constraints as well as in accessible and restriction in getting
the necessary data and information needed for this study, the study is thus
limited scope of available data and information of the case study which are
hope in future research on this topic could dwell on.
1.12 ORGANISATION OF THE STUDY
Chapter one of the
study gifts the introduction of the study, the background of study, stating the
problem, the hypothesis and the significance of the study.
CHAPTER TWO: LITERATURE REVIEW
This give the secondary
data concerning the study, various material were collected from various authors
concerning the subject matter i.e the internal control system and how its
CHAPTER THREE: RESEARCH
This give the research
design population of study, method of data collection and method of data
PRESENTATION OF DATA ANALYSIS
This give the analysis
of presentation of data, and testing the hypothesis.
This explain the
summary of findings recommendation and conclusions.
1.10 DEFINITIONS OF TERMS
researcher finds it working to define some important terms in the research work
for a better understanding of their meaning and the context in which they are
used in the work.
This is a whole system of controls, financial and other establishments by the
management of an organization in order to carry on the business of the
enterprise in an orderly and efficient manner, ensure adherence to management
policies, safeguard the assets and service as far as possible the complete and
accurate records in addition to the occurrence and internal advice.
achieving the result intended, that is producing the desire result, aim and
objective regularly and frequently.
particular way of doing things, organized or connected part that work together.
These are the owners of the organization i.e. those who contributed their
resources to start up the enterprises.
Those who see to the day-to-day running of the business to attain its set
objectives and goals.
the organizational resources in tangible form.
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