ABSTRACT
Over the years, there have being a problem of incorrect and unreliable
financial record which has lead to loss of organizational integrity. The
research work aimed among others at determining the relationship between
internal measures to proper accounting records. A survey research design
was adopted for this research study and a sample size was selected using
Yaro Yamane sampling technique as data used were obtained from both
primary and secondary sources. Four research questions were formulated
out of which three hypothesis were formulated using regression co-efficient
analysis method at 5% level of significance and the Z table was also used
for comparison between calculated value of significance B and tab le value.
The finding from the analysis indicates that internal control measure
management performance and is necessary for the growth and
effectiveness of the organization. Financial management of any
organization cannot do without internal control as true and fair presentation
of financial statement may never be possible if the board and senior
management are not committed to providing a well planned internal control
system. It also recommends that a periodical review of the organization
should be done by the management so as to cope with the model trends in
organizational fraud prevention
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CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Every organization both profit or non-profit organization has its
objectives and goals in mind to achieve. For the non-profit making
organization, their goal is to satisfy the social need of the citizens
and in the effort to achieve these purposes supervision more often
than not play a vital role.
The size and scope of these organizations have sometimes
made it hard for the executors to exercise personal and first hand
supervision of operation. It is in this light that internal control
established by management is initiated. For an organization to
carryout its business there must be some factors put in place for
the smooth running of the organization like materials, machines,
money etc.
These need to be well co-ordinated in order for the success of
the organization to be achieved. These factors are used by a group
of persons known as management. Neither can management exists
without an organization both are inseparable. The system of
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internal control provides assurance to management of the
dependability of the accounting data used in the decision making of
the organization
It has been discovered that due to lack of internal control
several banks have been discovered to have defrauded its
customers mostly foreign investors, Having discovered this, banks
now take extra precaution before clearing a cheque because of
rampant incidence of fraud and forgeries which have placed bank.
Loss on average of N1m each working day of the year in Nigeria.
Due to this challenges, CBN issued a directive to banks to increase
its capital base to N25 billion.
Management use internal control as a tool to check it staff due
to the fact that managers are not able to monitor the activities of
the organization. It therefore adopts the internal control in such a
way that the system checks itself and any irregularity within the
system is been detected and corrected.
To ensure that the system checks itself, management could
use devices such as segregations, supervision of work and
acknowledgement of performance. The effective arrangement and
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implementation of this control system would ensure proper
management.
1.2 STATEMENT OF PROBLEM
We might not really understand the impact of internal control
system in an organization until probably we run an organization
void of internal control system.
The absence of adequate internal control measures exposes the
financial management of an organization to certain threats such as:
– Incorrect financial statement and /loss of the
companys’assets.
– Stealing and mis-management of organizational vital
documents which may be done by an employee to take undue
advantage.
– Incorrect and unreliable financial records which may lead to
loss of organizational integrity.
– Non implementation of accounting policies in consistent
with the applicable legislation appropriate in presentation of
financial statement.
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1.3 OBJECTIVE OF THE STUDY
The overall purpose of this research work is to evaluate and
determine the impart of internal measures in an organizational
financial management.
A well defined organizational structure helps management to
run the business in an orderly manner. This enhance operational
and efficiency, which is the important features of internal control.
Specifically, this research work stands to achieve the following
objective.
1. To determine the impact of internal control to proper use of
organizations funds and assets.
2. To ascertain whether perpetration of fraud and losses of
Revenue in an organization are as a result of weakness in internal
control system.
3. To ensure whether a true reflection of organizational activities
are presented in financial statement where there is an active
observation of internal control measures.
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4. To determine the relationship between internal control
measures and proper keeping of accounting records.