ABSTRACT
The objectives of the study is to examine the
T he Role of Internal Control System as an aid to
Management Decision Making primary data were collected through a well structured research
questionnaire administered. A sample of 30 wer e randomly selected and all responded
accordingly. Therefore, chi square was employed for the data analysis. The study revealed that is
signific ant relationship between the internal control and decision making.
viii
TABLE OF CONTENT
Contents
DECLARATION……………………………………………………………………………………………………………………………………………………………………………………………………………… iiii
CERTIFICATION …………………………………………………………………………………………………………………………………………………………………………………………………………………. iiiiii
DEDICATION …………………………………………………………………………………………………………………………………………………………………………………………………………………. iviv
ACKNOWLEDGEMENT ……………………………………………………………………………………………………………………………………………………………………………. vv
ABSTRACT…………………………………………………………………………………………………………………………………………………………………………………………………………………….. viivii
TABLE OF CONTENT …………………………………………………………………………………………………………………………………………………………………………………………… viiiviii
LIST OF TABLE……………………………………………………………………………………………………………………………………………………………………………………………………………………… xixi
1.0 Introduction …………………………………………………………………………………………………………………………………………………………………………………………………………………….. 11
1.1 Background to the study
1.1 Background to the study …………………………………………………………………………………………………………………………………………………………………………………. 11
1.2 Statement of problem
1.2 Statement of problem ………………………………………………………………………………………………………………………………………………………………………………………….. 22
1.
1.3 Objective of study3 Objective of study …………………………………………………………………………………………………………………………………………………………………………………………………… 33
1.4 Research Questions
1.4 Research Questions ……………………………………………………………………………………………………………………………………………………………………………………………. 44
1.5
1.5 Statement of HypothesesStatement of Hypotheses ………………………………………………………………………………………………………………………………………………………………………… 55
1.6
1.6 Significance of the StudySignificance of the Study ………………………………………………………………………………………………………………………………………………………………………. 66
1.7 Scope and limitations of study
1.7 Scope and limitations of study …………………………………………………………………………………………………………………………………………………………………. 77
1.9 Organization of the study
1.9 Organization of the study ……………………………………………………………………………………………………………………………………………………………………………….. 77
1.10 Definition of Terms
1.10 Definition of Terms ……………………………………………………………………………………………………………………………………………………………………………………………. 88
CHAPTER TWO
CHAPTER TWO …………………………………………………………………………………………………………………………………………………………………………………………………………………… 1010
LITERATURE REVIEW
LITERATURE REVIEW ……………………………………………………………………………………………………………………………………………………………………………………………. 1010
2.0
2.0 IntrodIntroductionuction ……………………………………………………………………………………………………………………………………………………………………………………………………………. 1010
2.1 Conceptual Clarification
2.1 Conceptual Clarification ……………………………………………………………………………………………………………………………………………………………………………… 1010
2.1.1 Definition and Understanding of Internal control
2.1.1 Definition and Understanding of Internal control ……………………………………………………………………………………………… 1010
2.2 Internal Control
2.2 Internal Control ………………………………………………………………………………………………………………………………………………………………………………………………………. 1212
2.2.1 Components of Internal Control
2.2.1 Components of Internal Control …………………………………………………………………………………………………………………………………………………… 1414
2.2.1.1 Control Environment
2.2.1.1 Control Environment …………………………………………………………………………………………………………………………………………………………………….. 1414
2.2.1.2 Risk Assessment
2.2.1.2 Risk Assessment…………………………………………………………………………………………………………………………………………………………………………………… 1414
2.2.1.3 Control Activities
2.2.1.3 Control Activities ……………………………………………………………………………………………………………………………………………………………………………….. 1414
2.2.1.4 Information and Communication
2.2.1.4 Information and Communication …………………………………………………………………………………………………………………………………….. 1515
2.2.1.5 Monitoring
2.2.1.5 Monitoring …………………………………………………………………………………………………………………………………………………………………………………………………. 1515
2.2.2 What Internal Control Can Do
2.2.2 What Internal Control Can Do ………………………………………………………………………………………………………………………………………………………… 1616
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2.2.3 What Internal Control Cannot Do
2.2.3 What Internal Control Cannot Do ……………………………………………………………………………………………………………………………………………….. 1717
2.2.4 Roles and Responsibilities
2.2.4 Roles and Responsibilities …………………………………………………………………………………………………………………………………………………………………… 1717
2.2.4.1 Management
2.2.4.1 Management ……………………………………………………………………………………………………………………………………………………………………………………………… 1818
2.2.4.2 Board of Directors
2.2.4.2 Board of Directors……………………………………………………………………………………………………………………………………………………………………………… 1818
2.2.4.3 Internal Auditors
2.2.4.3 Internal Auditors …………………………………………………………………………………………………………………………………………………………………………………. 1919
2.2.4.4 Other Personnel
2.2.4.4 Other Personnel …………………………………………………………………………………………………………………………………………………………………………………….. 1919
2.2.5 Classification of Internal Control
2.2.5 Classification of Internal Control…………………………………………………………………………………………………………………………………………………. 2020
2.2.5.1 Administrative Control
2.2.5.1 Administrative Control…………………………………………………………………………………………………………………………………………………………………. 2020
2.2.5.2 Accounting C
2.2.5.2 Accounting Controlontrol ………………………………………………………………………………………………………………………………………………………………………….. 2020
2.2.6 How to Establish Cost
2.2.6 How to Establish Cost–Effective ControlsEffective Controls ………………………………………………………………………………………………………………………… 2121
2.2.7 Determining Your Plan’s Control Objectives
2.2.7 Determining Your Plan‘s Control Objectives…………………………………………………………………………………………………………………. 2121
2.2.8 Establishing, Documenting and Communication of Your Internal Controls
2.2.8 Establishing, Documenting and Communication of Your Internal Controls ……………………………. 2323
2.2.9 Essential Elements of Internal Control
2.2.9 Essential Elements of Internal Control …………………………………………………………………………………………………………………………………. 2525
2.2.10 Importance of Interna
2.2.10 Importance of Internal Controll Control …………………………………………………………………………………………………………………………………………………… 2626
2.2.11 Segregation of Duties
2.2.11 Segregation of Duties ……………………………………………………………………………………………………………………………………………………………………………… 2828
2.2.12 Internal Audit
2.2.12 Internal Audit …………………………………………………………………………………………………………………………………………………………………………………………………… 2828
2.2.13 Objectives of Internal Auditing Function
2.2.13 Objectives of Internal Auditing Function ………………………………………………………………………………………………………………………. 2929
2.2.14 limitations of Internal Control
2.2.14 limitations of Internal Control …………………………………………………………………………………………………………………………………………………….. 2929
2.3 The Nature of Decision making
2.3 The Nature of Decision making ………………………………………………………………………………………………………………………………………………………….. 3030
2.3.1 Decision Making Process
2.3.1 Decision Making Process ……………………………………………………………………………………………………………………………………………………………….. 3030
2.4 Internal Control and Information Technology
2.4 Internal Control and Information Technology …………………………………………………………………………………………………………………… 3131
2.5 Theoretical Literature Review
2.5 Theoretical Literature Review ……………………………………………………………………………………………………………………………………………………………… 3232
2.5.1Research of control conception
2.5.1Research of control conception …………………………………………………………………………………………………………………………………………………….. 3232
2.5.2 The Need for Control Systems
2.5.2 The Need for Control Systems …………………………………………………………………………………………………………………………………………………. 3636
2.5.3 Adoption and Design of Controls
2.5.3 Adoption and Design of Controls ………………………………………………………………………………………………………………………………………… 3939
2.6 The Need to Align Principals and Agents
2.6 The Need to Align Principals and Agents ……………………………………………………………………………………………………………………………….. 4040
2.6.1 Control of Agency Problems
2.6.1 Control of Agency Problems ………………………………………………………………………………………………………………………………………………………….. 4141
2.6.2 Adoption of New Organizational Practices
2.6.2 Adoption of New Organizational Practices ……………………………………………………………………………………………………………….. 4444
2.6.2.1 Coercive Isomorphic Change
2.6.2.1 Coercive Isomorphic Change ……………………………………………………………………………………………………………………………………………….. 4545
2.6.2.2 Mimetic Isomorphic Change
2.6.2.2 Mimetic Isomorphic Change…………………………………………………………………………………………………………………………………………………. 4545
2.6.2.3 Normative Isomorphic Change
2.6.2.3 Normative Isomorphic Change ………………………………………………………………………………………………………………………………………….. 4646
Empirical Review
Empirical Review …………………………………………………………………………………………………………………………………………………………………………………………………………………… 4646
2.7 Control from Different Theoretical Perspectives
2.7 Control from Different Theoretical Perspectives ……………………………………………………………………………………………………………. 4646
CHAPTER THREE
CHAPTER THREE ……………………………………………………………………………………………………………………………………………………………………………………………………………. 5252
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RESEARCH METHODOLOGY
RESEARCH METHODOLOGY …………………………………………………………………………………………………………………………………………………………………….. 5252
3.0 Introduction
3.0 Introduction …………………………………………………………………………………………………………………………………………………………………………………………………………………. 5252
3.1 Rese
3.1 Research Designarch Design…………………………………………………………………………………………………………………………………………………………………………………………………….. 5252
3.2 Research Population
3.2 Research Population………………………………………………………………………………………………………………………………………………………………………………………….. 5252
3.3 Sample and Sample Techniques
3.3 Sample and Sample Techniques ………………………………………………………………………………………………………………………………………………………….. 5353
3.4 Research Instrument
3.4 Research Instrument………………………………………………………………………………………………………………………………………………………………………………………….. 5353
3.5 Validity and Reliability of Instrument
3.5 Validity and Reliability of Instrument ………………………………………………………………………………………………………………………………………….. 5353
3.6 Data Collection Technique
3.6 Data Collection Technique ………………………………………………………………………………………………………………………………………………………………………… 5353
3.7 Method of Data Analysis
3.7 Method of Data Analysis ……………………………………………………………………………………………………………………………………………………………………………. 5353
CHAPTER FOUR
CHAPTER FOUR …………………………………………………………………………………………………………………………………………………………………………………………………………………. 5555
DATA PRESENTATION AND DISCUSSION
DATA PRESENTATION AND DISCUSSION ……………………………………………………………………………………………………………………………….. 5555
4.1 Demographic Data of Respondents
4.1 Demographic Data of Respondents ……………………………………………………………………………………………………………………………………………….. 5555
4.2 Testing of Hypotheses
4.2 Testing of Hypotheses ………………………………………………………………………………………………………………………………………………………………………………………… 5757
4.2.1 Hypothesis one:
4.2.1 Hypothesis one: ………………………………………………………………………………………………………………………………………………………………………………………….. 5757
4.2.2 Hypothesis Two:
4.2.2 Hypothesis Two: ………………………………………………………………………………………………………………………………………………………………………………………. 5858
4.2.3 Hypothesis three
4.2.3 Hypothesis three………………………………………………………………………………………………………………………………………………………………………………………… 5959
4.2.
4.2.4 Hypothesis Four4 Hypothesis Four ………………………………………………………………………………………………………………………………………………………………………………………… 6161
CHAPTER FIVE
CHAPTER FIVE …………………………………………………………………………………………………………………………………………………………………………………………………………………… 6633
SUMMARY OF FINDINGS, DICUSSION, CONCLUSION AND RECOMMENDATIONS
SUMMARY OF FINDINGS, DICUSSION, CONCLUSION AND RECOMMENDATIONS………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….. 6363
5.0 Introduction
5.0 Introduction …………………………………………………………………………………………………………………………………………………………………………………………………………………. 6363
5.1 Summ
5.1 Summary of Findingsary of Findings ………………………………………………………………………………………………………………………………………………………………………………………. 6363
5.2 Conclusion
5.2 Conclusion …………………………………………………………………………………………………………………………………………………………………………………………………………………… 6363
5.3 Recommendations
5.3 Recommendations ……………………………………………………………………………………………………………………………………………………………………………………………….. 6464
REFERENCES
REFERENCES …………………………………………………………………………………………………………………………………………………………………………………………………………………….. 6565
APPENDIX
APPENDIX …………………………………………………………………………………………………………………………………………………………………………………………………………………………………….. 6767
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LIST OF TABLE
TABLE NO
TABLE NO PAGE NOPAGE NO
2.6 Different theoretical perspectives on controls
2.6 Different theoretical perspectives on controls 4848
4.1 Respondents’ Profile
4.1 Respondents‘ Profile 5555
2 Chi
2 Chi–Square (X2) contingency table on the relevance of internal controlSquare (X2) contingency table on the relevance of internal control 57 57
system in the proper use of fund and asset.system in the proper use of fund and asset.
3 Chi
3 Chi–Square(X2) Tests on the relevance of internal control system in the Square(X2) Tests on the relevance of internal control system in the 5757
proper use of fund and asset.proper use of fund and asset.
4 Chi
4 Chi–Square (X2) contingency table on the effect of internal control system Square (X2) contingency table on the effect of internal control system 5858
on management control and decision making.on management control and decision making.
5 Chi
5 Chi–Square Tests on the effect of intSquare Tests on the effect of internal control system on managementernal control system on management 5959
control and decision making.control and decision making.
6 Chi
6 Chi–Square (X2) contingency table on the internal control system andSquare (X2) contingency table on the internal control system and 6060
efficiency, effectiveness, and economy of refficiency, effectiveness, and economy of resources utilization.esources utilization.
7 Chi
7 Chi–Square Tests on the internal control system and efficiency, effectiveness,Square Tests on the internal control system and efficiency, effectiveness, 6060
and economy of resources utilization.and economy of resources utilization.
8 Chi
8 Chi–Square (X2) contingency table on internal control system, and relevance Square (X2) contingency table on internal control system, and relevance 6161
and reliability of financial and management information.and reliability of financial and management information.
9 Chi
9 Chi–Square Tests internal control system, and relevance and reliableSquare Tests internal control system, and relevance and reliable 6262
financial and management information.financial and management information.
1
CHAPTER ONE
1.0 Introduction
1.1 Background to the study
Every organization both profit or nonEvery organization both profit or non–profit organization has its objectives and goals in mind to profit organization has its objectives and goals in mind to achieve. For the nonachieve. For the non–profit making organization, their goal is to satisfy the social need of the profit making organization, their goal is to satisfy the social need of the citizens and in the effort to achieve these purposes supercitizens and in the effort to achieve these purposes supervision more often than not play a vital vision more often than not play a vital role. The size and scope of these organizations have sometimes made it hard for the executors to 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 exercise personal and first hand supervision of operation. It is in this light that internal control established by manestablished by management is initiated. For an organization to carry out its business there must agement is initiated. For an organization to carry out its business there must be some factors put in place for the smooth running of the organization like materials, machines, be some factors put in place for the smooth running of the organization like materials, machines, money etc. These need to be well comoney etc. These need to be well co–ordinated in order for the success of the ordinated in order for the success of the organization to be organization to be achieved. These factors are used by a group of persons known as management. Neither can achieved. These factors are used by a group of persons known as management. Neither can management exists without an organization both are inseparable. management exists without an organization both are inseparable.
The system of internal control provides assurance to management of the dependability
The system of internal control provides assurance to management of the dependability of the of the accounting data used in the decision making of the organization. Management use internal accounting data used in the decision making of the organization. Management use internal control as a tool to check it staff due to the fact that managers are not able to monitor the 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 activities of the organization. It therefore adopts the internal control in such a way that the control in such a way that the system checks itself and any irregularity within the system is been detected and corrected. To 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, ensure that the system checks itself, management could use devices such as segregations, supervision of work and acknowledgement osupervision of work and acknowledgement of performance. f performance.
The effective arrangement and implementation of this control system would ensure proper
The effective arrangement and implementation of this control system would ensure proper management. Highmanagement. High–profile organizational failures typically lead to the imposition of additional profile organizational failures typically lead to the imposition of additional
2
rules and requirements, as well as to subsequent time
rules and requirements, as well as to subsequent time–coconsuming and costly compliance efforts. nsuming and costly compliance efforts. However, this obscures the fact that the right kind of internal controlsHowever, this obscures the fact that the right kind of internal controls——enabling an organization enabling an organization
to capitalize on opportunities while offsetting the threats
to capitalize on opportunities while offsetting the threats——can actually save time and money, and can actually save time and money, and
promote the creatio
promote the creation and preservation of value. Effective internal control also creates a n and preservation of value. Effective internal control also creates a competitive advantage, as an organization with effective controls can take on additional risk. competitive advantage, as an organization with effective controls can take on additional risk.
According to Chambers (1995), Cosserat (1999), Ridley and Chambers (1998), internal ContAccording to Chambers (1995), Cosserat (1999), Ridley and Chambers (1998), internal Controls rols are systems comprising of the control environment and control procedures. They further state are systems comprising of the control environment and control procedures. They further state that the internal control systems include all the policies and procedures adopted by the directors that the internal control systems include all the policies and procedures adopted by the directors and management of an entity to assist in achieving their oband management of an entity to assist in achieving their objective of efficient conduct of its jective of efficient conduct of its business, including adherence to internal policies, the safeguarding of assets, the prevention and business, including adherence to internal policies, the safeguarding of assets, the prevention and detection of fraud and error, the accuracy and completion of the accounting records and timely detection of fraud and error, the accuracy and completion of the accounting records and timely preparation of reliable fipreparation of reliable financial information. Successful organizations ensure that they attain and nancial information. Successful organizations ensure that they attain and consolidate continued survival in a competitive environment Drucker (1999). Thus successful consolidate continued survival in a competitive environment Drucker (1999). Thus successful organizations set performance measures that focus attention that identifies and communicatorganizations set performance measures that focus attention that identifies and communicates the es the success, support organization learning and provide a basis for assessment and reward (Brown, success, support organization learning and provide a basis for assessment and reward (Brown, 1996).1996).
1.2 Statement of problem
We might not really understand the impact of internal control system in an organization until
We might not really understand the impact of internal control system in an organization until probably we run an organizaprobably we run an organization void of internal control system. Because internal control is so tion void of internal control system. Because internal control is so important to the reliability of financial statements, there are times when the internal control important to the reliability of financial statements, there are times when the internal control system should be examined closely. Examining the design of internal controls can be extremesystem should be examined closely. Examining the design of internal controls can be extremely ly beneficial and is usually much less costly than an audit of the organization wide financial beneficial and is usually much less costly than an audit of the organization wide financial statements .Control itself exists to keep performance of an organization within what is expected statements .Control itself exists to keep performance of an organization within what is expected
3
by the organization, control built within a process is internal
by the organization, control built within a process is internal in nature and takes place with a in nature and takes place with a combination of interrelated components such as social environment affecting combination of interrelated components such as social environment affecting behaviorbehavior of of employees, information necessary in control and policies and procedures (COSO 2001).The employees, information necessary in control and policies and procedures (COSO 2001).The absence of adequate internal control measures eabsence of adequate internal control measures exposes the financial management of an xposes the financial management of an organization to certain threats such as: organization to certain threats such as:
Improper use of organizational resources and funds, due to inadequate internal control to Improper use of organizational resources and funds, due to inadequate internal control to keep a proactive check on the way the resources and funds are utilized.keep a proactive check on the way the resources and funds are utilized.
NonNon–existence existence of Value for Money requisites and principles in the management of of Value for Money requisites and principles in the management of organizational resources and funds.organizational resources and funds.
Financial and operating reports and data are not relevant, reliable and misrepresent what Financial and operating reports and data are not relevant, reliable and misrepresent what they purport to represent.they purport to represent.
Non-availability of appropriate mechanism to ensure that policies, plans, procedures, statutory requirements and regulations that govern the operation and reporting process of the organization are been complied with across the organization
1.3 Objective of study
1.3 Objective of study
The overall purpose of
The overall purpose of this research work is to evaluate and determine the impact of internalthis research work is to evaluate and determine the impact of internal measures in an organization and its significance in making it a basis for decision making in measures in an organization and its significance in making it a basis for decision making in Unilorin .A wellUnilorin .A well–defined organizational structure helps management to run the business in adefined organizational structure helps management to run the business in an n orderly manner. This enhance operational and efficiency, which is the important features of 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.internal control. Specifically, this research work stands to achieve the following objective.
4
To determine the impact of internal control to proper use of organTo determine the impact of internal control to proper use of organizations funds and izations funds and assets. assets.
Appraise the economy, efficiency and effectiveness with which resources are employed.Appraise the economy, efficiency and effectiveness with which resources are employed.
Appraise the relevance, reliability and integrity of management, financial and operating Appraise the relevance, reliability and integrity of management, financial and operating data and reportsdata and reports
Review the systems established tReview the systems established to ensure compliance with those policies, plans, o ensure compliance with those policies, plans, procedures, statutory requirements and regulations which could have a significant impact procedures, statutory requirements and regulations which could have a significant impact on operations.on operations.
1.4 Research Questions
1.4 Research Questions
The following research question guided this study: The following research question guided this study:
What is the impact of What is the impact of Internal Control on the proper use of organization funds and Internal Control on the proper use of organization funds and resources?resources?
Are the efficiency, effectiveness and economy of the planned use of resources and Are the efficiency, effectiveness and economy of the planned use of resources and assets duly considered before making decision among alternatives?assets duly considered before making decision among alternatives?
What is the level at which financialWhat is the level at which financial and operating reports and data relevant, reliable and operating reports and data relevant, reliable and accurate for making decisions?and accurate for making decisions?
How soon and how often is nonHow soon and how often is non–compliance with operating and reporting policies, compliance with operating and reporting policies, plans, procedures, statutory requirements and regulations been detected and acted plans, procedures, statutory requirements and regulations been detected and acted upon in upon in the organization?the organization?
5
1.5
1.5 Statement of HypothesesStatement of Hypotheses
The following four (4) hypotheses were formulated and tested in this study.
The following four (4) hypotheses were formulated and tested in this study.
Hypothesis one
Hypothesis one
H0
H0: Internal control system is not relevant in the proper use of funds and asset: Internal control system is not relevant in the proper use of funds and asset
H1
H1: Internal control is : Internal control is relevant in the proper use of funds and assetrelevant in the proper use of funds and asset
Hypothesis two
Hypothesis two
H0
H0: Internal control negatively affects management control and decision making : Internal control negatively affects management control and decision making
H1
H1: Internal control positively affects management control and decision making : Internal control positively affects management control and decision making
Hypothesis three
Hypothesis three
H0
H0: The exist: The existing system of controls does not facilitate efficient, effective, and economic ing system of controls does not facilitate efficient, effective, and economic utilization of resources utilization of resources
H1
H1: The existing system of controls facilitates efficient, effective, and economic utilization of : The existing system of controls facilitates efficient, effective, and economic utilization of resourcesresources
6
Hypothesis four
Hypothesis four
H0
H0: Sound internal control system does not bring about relevant and reliable financial, : Sound internal control system does not bring about relevant and reliable financial, management and operating data and information management and operating data and information
H1
H1: Sound internal control system bring about relevant and reliable financial, management and : Sound internal control system bring about relevant and reliable financial, management and operating data and informatioperating data and information on
1.6
1.6 Significance of the StudySignificance of the Study
This research finding will provide a conceptual frame work and standard against which
This research finding will provide a conceptual frame work and standard against which organizations could assess their internal control system and their effectiveness. Also the result of organizations could assess their internal control system and their effectiveness. Also the result of the study will contribute to idethe study will contribute to identify the gap within the system of internal control in educational ntify the gap within the system of internal control in educational institutions. It is also believed that invaluable benefits to management and those charged with institutions. It is also believed that invaluable benefits to management and those charged with governance in educational institutions, will establish on how the internal control system wilgovernance in educational institutions, will establish on how the internal control system will l ensure of improving the financial performance and ultimately serve as a basis for management ensure of improving the financial performance and ultimately serve as a basis for management control and decision making. To the researcher who will be interested on the same idea, it will control and decision making. To the researcher who will be interested on the same idea, it will provide the proper path, of what this research could not cover coprovide the proper path, of what this research could not cover considering its limitations. nsidering its limitations.
The result of this research work will also help the educational institutions to sit up in following
The result of this research work will also help the educational institutions to sit up in following the control measures in their day to day management. Moreover this research is to partially fulfill the control measures in their day to day management. Moreover this research is to partially fulfill an academic requirement for an academic requirement for the award of a bachelor’s degree it is expected that the award of a bachelor‘s degree it is expected that recommendations will be provided to complement the policies by the regulatory bodies and the recommendations will be provided to complement the policies by the regulatory bodies and the efforts of education sector in addressing problems.efforts of education sector in addressing problems.
Decision making is one area that is given a lot of prominDecision making is one area that is given a lot of prominence all over the world, it has been ence all over the world, it has been widely researched. A lot of literature has been written on decision making, and external auditors widely researched. A lot of literature has been written on decision making, and external auditors normally place an emphasis on internal controls as a measured to ensure sustainable and improve normally place an emphasis on internal controls as a measured to ensure sustainable and improve
7
management control, howev
management control, however, it is the perception of the researcher that there are still gaps in the er, it is the perception of the researcher that there are still gaps in the research so far done. This study will therefore try to establish the linkage between internal research so far done. This study will therefore try to establish the linkage between internal controls and improved management control and decision making.controls and improved management control and decision making.
1.7 Scope and
1.7 Scope and LimitatiLimitations ons of studyof study
The study mainly focused on internal control system and its impact on the management control
The study mainly focused on internal control system and its impact on the management control and decision making of an organization, it will be only concentrated on testing internal controls and decision making of an organization, it will be only concentrated on testing internal controls apparel with internal audit, so as to assess the apparel with internal audit, so as to assess the risk so management within the organization. The risk so management within the organization. The proper internal control is the easier way of attaining (the university plans and objectives) on proper internal control is the easier way of attaining (the university plans and objectives) on understanding this i will be concentrating on the administrative department within the understanding this i will be concentrating on the administrative department within the educational institution (educational institution (university), to assess whether the educational institution comply with university), to assess whether the educational institution comply with rules and regulations governing them. The period of study is 2014/2015 academic session.rules and regulations governing them. The period of study is 2014/2015 academic session.
In this study, no limitations were experienced.
In this study, no limitations were experienced.
1.9 Organization of the study
1.9 Organization of the study
This research
This research work is structured as a five chapter work such that the background information, work is structured as a five chapter work such that the background information, statement of the research problem, scope and limitations of the study, research hypotheses and statement of the research problem, scope and limitations of the study, research hypotheses and definition of terms is covered by chapter one.definition of terms is covered by chapter one.
Chapter two focuses on the theoret
Chapter two focuses on the theoretical and conceptual framework relevant to the study, related ical and conceptual framework relevant to the study, related literatures were also reviewed.literatures were also reviewed.
Chapter three for research methodology, research design, population and sample size, research
Chapter three for research methodology, research design, population and sample size, research instruments, method of collection and data collection technique. instruments, method of collection and data collection technique.
Chapter four is devoted to data presentation and analysis and interpretation of result.
Chapter four is devoted to data presentation and analysis and interpretation of result.
8
Chapter five is meant for conclusion, recommendation and suggestion for further studies.
Chapter five is meant for conclusion, recommendation and suggestion for further studies.
1.10 Definition of Terms
1.10 Definition of Terms
The following definitions are defined in the contex
The following definitions are defined in the context for which they are used in this research work;t for which they are used in this research work;
Internal controlInternal control
This can be defined in accounting and auditing, is a process for assuring achievement of an This can be defined in accounting and auditing, is a process for assuring achievement of an
organization’s objectives in operational effectiveness and efficiency, reliable financial repor
organization’s objectives in operational effectiveness and efficiency, reliable financial reporting, ting, and compliance with laws, regulations and policies. and compliance with laws, regulations and policies.
ManagementManagement
It is defined as the process of planning, organizing coordinating and controlling the activities of
It is defined as the process of planning, organizing coordinating and controlling the activities of an organization. It is seen as a group of people who monitor and control the organizaan organization. It is seen as a group of people who monitor and control the organization tion activities towards the achievement of the organization objectives.activities towards the achievement of the organization objectives.
ControlControl
Is an exercise performed in the present to achieve a plan drawn up for the future.
Is an exercise performed in the present to achieve a plan drawn up for the future.
Decision makingDecision making
This can be regarded as the cognitive process resulting in the selection oThis can be regarded as the cognitive process resulting in the selection of a belief or a course f a belief or a course action among several alternative possibilities.action among several alternative possibilities.
Financial statementFinancial statement
A financial statement is a formal record of the financial activities of a business ,person, or other A financial statement is a formal record of the financial activities of a business ,person, or other
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entity. Relevant financial information is presented in a stru
entity. Relevant financial information is presented in a structured manner and in a form easy to ctured manner and in a form easy to understand.understand.
RiskRisk
This is the potential of losing something of value.This is the potential of losing something of value.
Effective internal control Effective internal control
Reasonable assurance that the entity’s operational objectives are achieved, the published
Reasonable assurance that the entity‘s operational objectives are achieved, the published financial statements are financial statements are reliably prepared, and applicable laws and regulations are complied with.reliably prepared, and applicable laws and regulations are complied
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