Abstract
The Project File Details
Name: The Effects of Internal Control System in an Organization
Type: PDF and MS Word (DOC)
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Length: 53 Pages
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
With the prevailing situation in the Nigeria economy, it is an established fact
that embezzlement and mismanagement of resources is what the director of
companies embarked upon, instead of adequate management of resources
pulled together by the shareholders. Also these directors despite the
stewardship they hold are not exhibiting accountability and transparent
honesty, it is for these reasons the researcher deems it fit to examine how
effective internal control system can serve as a means of preventing fraud in
the public sector.
According to Oxford Advanced Learner Dictionary fraud can be defined as
an Act of deceiving in order to make money or obtain goods, “Kirk Patrickâ€Â
(1985) described a person who pretends to be something that he is not a
fraud, deceptive, tricky, a cheat and a swindlerâ€Â, furthermore fraud includes
embezzlement, theft or nay attempt to steal unlawful possession of assets.
From the above, it is understood that fraud involves the use of deceit and
tricks. The action, it is understood that form of forgery, falsification, of
document, authorized signature and outright theft.
However, it has been establish that majority of frauds in the public sector
can be attributed to lack of sound or lap set in the internal sector and the
existence of poor control region.1.2 STATEMENT OF PROBLEM
Organizations have failed in their occasional review and appraisals of the
internal control system in operation or have totally ignored the operations of
effective internal system in the discharge of their duties and this has over the
years been the bane of an effective service to the people.
Also it is the use of internal control as a management tool. In the society; the
work will also provide answers to the role of internal control in
manufacturing organization.1.3 SIGNIFICANT OF THE STUDY
Internal control is the type of control exercised by the management within
the organization. Internal control is not only internal check and internal audit
but the whole system of controls, financial and otherwise, established to
secure the asset and secure as far as possible the completeness and accuracy
of the records.
It should be noted that the need to safeguard assets and keep proper records
is an essential justification for internal control. All measures employed by an
organization to:
ï‚· Safeguard assets from waste, fraud and inefficient use.
ï‚· Promote accuracy and reliability in the accounting records and encourage
compliance with company policies and evaluate the efficiency of
operations.1.4 OBJECTIVE OF THE STUDY
The study will look into loopholes and weakness in the internal control
system used in the organization and to make recommendation for any
necessary improvement as a complete change of the system in operation.
The research work intends to study the organizational structure of the
internal control department as the internal audit department. Problems being
encountered by these two departments in their functioning and strategies to
be used in solving these problems will be considered.1.5 SCOPE OF STUDY
This research study is designed to find out if actually the non-operation of
effective internal control system has been the cause of irregularities in
electricity supply in the country.
The data to be used will be gathered mainly from the accounting department,
budget department and wages and salaries department of the OGITECH
Nigeria bottling company.
However, the results are envisaged to bear relevance to other manufacturing
industry with same internal control system.1.6 RESEARCH QUESTIONS
These are some questions that will be relevant to help carry out the research
work such as follows:
ï‚· Does internal control affect manufacturing company performance?
ï‚· Does internal control helps to safeguard the assets of the organization?
ï‚· Is there a correlation between internal control and manufacturing
company performance?
ï‚· Does internal control system help the organization in case of workers
commitment to work?
ï‚· Does internal control system increase organization productivity?1.7 RESEARCH HYPOTHESIS
Hypothesis 1
Ho: Internal control does not affect manufacturing company performance
Hi: Internal control affect manufacturing company performance
Hypothesis II
5
Ho: There is no correlation between internal control and manufacturing
company performance
Hi: There is correlation between internal control and manufacturing
company performance1.8 LIMITATION OF THE STUDY
During the course of this study research, was some major limitations have
been inescapably encountered. This includes:
a. Inadequate time and logistic which as expected, constitute a constraint.
b. The usual un-corporative attitude of some official secret has succeeded
in impeding the depth or vastness of this work. To curtail this, secondary
data released is released is relied upon in the execution of this work.
c. Lack of proper record which have been identified by many reputable
researchers as a major threat to the expansion of small scale enterprises.
It is not surprising to realize that this also has unfavorable constraint to
the research work.1.9 DEFINITIONS OF TERMS
ï‚· Book-keeper: A person who records financial statement of company or
an organization
ï‚· Advertising: The activity or business of advertising things on television,
radio etc or to tell the public about a product or service in order to
persuade them to buy
ï‚· Embezzlement: To steal money from the place where you work.
ï‚· Mismanagement: If someone mismanages something they are in charge
of, they deal with or manage it badly.
ï‚· Shareholder: Someone who owns shares in a company or business.
 Stewardship: Someone’s stewardship of something is the way that they
control or protect it.
ï‚· Fraud: The crime of deceiving people in order to gain something such as
money or goods or someone or something that is not what it is claimed to
be.
ï‚· Internal control: Is a whole system of controls, financial and otherwise,
established by the management in order to carry on the business of the
enterprise in an orderly and efficient manner, ensure adherence to
management policies.
ï‚· Safeguard: to protect something from harm or damage.
ï‚· Organizationalstructure: It consists of activities such as task allocation,
coordination and supervision, which are directed towards the
achievement of organizational aims. It can be considered as the viewing
glass or perspective through which individuals see their organization and
its environment.1.10 HISTORICAL BACKGROUND OF OGITECH
Just like the mustard seed the dream of Ogun State Institute of Technology
Igbesa(OGITECH) formally, Gateway (ICT) Polytechnic, Igbesa(G.P.I) was
planted in the heart of the Ogun State Government in 2015. The infuriation
took place June 29th 2006.
OGITECH was established with the mission of being the first choice of
student business and public organization through delivery of high standard
of education, and producing qualify graduate to make to make important
contributions to the state in particular and the country as a whole. Currently,
OGITECH Igbesa runs courses in applied sciences and Technology,
Engineering Studies and Management Studies.
Meanwhile, Ogun State Institute of Technology is running nine(9) National
Diploma and five (5) Higher National Diploma courses, all which are
accredited by the national board of technical Education (NBTE) and more
are still in pipeline for resources approval. As an information
communication technology (I.C.T) based institute, OGITECH, also runs
professional certificates in CISCO I.T. Essentials: PC Hardware and
Software, Cisco Certified Network Associates (CCNA 1-4) and CCNA
security. It is mandatory of all students of the institution to undergo ICT
programme thereby acquiring two certificates at graduation.
The institute population is relatively large with full time and part time
students’ academic and non- academic staff to have its own special life.
Ogun State Institute of Technology, Igbesa by the pronouncement of the
Ogun State Government on Wednesday 8th February, 2012 is presently
Headquarters in main campus to three (3) campuses namely:
(1) KessingtonAdetutu campus saapade
(2) Abraham Adesanya Campus Ijebu Igbo
(3) D.S Adegbenro Campus, Itori