INTERNAL CONTROL SYSTEM AS AN AIM TO EFFECTIVE MANAGEMENT IN AN ORGANIZATION
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INTERNAL CONTROL SYSTEM AS AN AIM TO EFFECTIVE MANAGEMENT IN AN ORGANIZATION
Chapter one
INTRODUCTION
1.1 Background of the Study
The establishment of the organisation necessitates the deployment of technical and management expatriates. To be sustained and continue in business as a going concern, sound accounting and administrative policies processes must be implemented. This is to help prevent inefficiencies, misappropriation, fraud, waste, and potential loss.
Internal control systems are a popular administrative and accounting method used by many organisations to safeguard their assets. Thus, the proper operation of any organization’s internal control system is heavily influenced by the amount to which the organization’s internal audit department discharged its tasks, as well as the size of the business.
The Institute of Chartered Accountants defines internal control systems.
The accountant defines “the whole system of control, financial otherwise, establish by the management in order to carry on the business of the enterprise in an orderly and efficient manner, to ensure adherence to management policies., safeguard the asset and secure as far as possible the completeness and accuracy of the records” .
The notion of the whole control system in areas such as authorization and approval, performance reviews, and budgetary management.
In a regular business setting, these controls must be stated and demonstrated to exist and be executed by staff concerned and designed, while reports and output resulting from the implementation of the control are given to management by the various department heads and supervisors.
The internal audit department (staff) is responsible for investigating and evaluating the entire internal control system, as well as the efficiency with which the various business departments fulfil their assigned responsibilities.
Accordingly, Alkison (2013) believes that internal auditing encompasses all actions made by management through the internal audit department to guarantee that the internal control system performs efficiently and effectively.
According to Eketere (2014), internal audit functions as a managerial control mechanism in the domain of
Social and financial policy implementation
Fraud detection and error prevention are accomplished through regular investigations of potential control system weaknesses.
Acting as a consultant to management in this situation.
Monitoring external responses to the internal control system in order to reduce waste, losses, and abuse.
Assisting in educating the organization’s staff on the importance of adhering to the internal control system.
Ensure that financial information is authentic and dependable for policy and decision making.
It is sufficient to state at this point that internal control directs all operations and monitors the operation of all sections and branches of the organization’s control procedures. Against this backdrop, this study tries to investigate and evaluate the effectiveness of an organisation, specifically UBA pLC in Uyo.
Given the fiduciary roles banks play in the economy, the challenges that banks face with money, and the auditor’s obligation to present a true and fair view of the financial statement, it became necessary to analyse and measure the extent of bank control as a cost-cutting technique and controls over its assets.
1.2 Statement of the Problem
Inefficient utilisation and administration of an organization’s resources may be the outcome of an inadequate control system, which can provide gaps and loopholes for various fraudulent practices to proliferate.
This issue could be generated in part by management and/or legal middle management as a result of a poorly established internal controls system. This can result in the failure to meet the organization’s objectives.
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