IMPROVING ACCOUNTABILITY AND TRANSPARENCY THROUGH EFFECTIVE INTERNAL CONTROL SYSTEM IN ECOBANK PLC, UYO AKWA IBOM STATE
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
When an individual in an organization is given an assignment to carry out on, he should ensure that he gives an accurate, detailed and a clear report to the delegated authority that is accountability and transparency. Accountability and transparency is very important in every organization, be it profit oriented or non-profit oriented. Where financial accountability and transparency is absent, the obvious consequences will be embezzlement, thefts, fraud and mismanagement of funds. These socials ills can be prevented or reduced to the barest minimum through the use of effective internal control system. If the internal control system of any organization is sound, there is bound to be financial accountability. Any internal control system that is ineffective, it is equally as bad as not having any because this will permit inefficiency in financial accountability (Santocki, 1979).
As the topic reads, “improving accountability and transparency through effective internal control system in Ecobank Plc”, it suggests that, accountability and transparency will not be achieved without effective internal control system. Both the private sector and the public sector make use of internal control system to enhance accountability and transparency. There are two main broad divisions of internal control namely; accounting control and administrative control. They are also known as financial and non-financial control. Where there is a little segregation of duties, weak administrative control and improperly maintained accounting records, one obvious problems will be financial unaccountability, for you cannot account unless things are been done properly.
According to Stettler (1987:60) “internal control comprises of the plan of organization and all co-ordinate methods and measures adopted within a business to safeguard it’s assets, check accuracy and reliability of its accounting data, promote operational efficiency and encourage adherence to prescribed managerial policy”. In the researcher’s view, this is a broad definition and its emphasizes the necessity for effective internal control system in any establishment, be it private or public.
1.2 STATEMENT OF THE PROBLEM
Accountability and transparency which is commonly used every where is not adhered to by most employees. Most managers are less informed about the benefits of installing internal control mechanisms in the institution. The effectiveness of segregation of duties in the bank has reduced due to the fact that most employees convinced to achieve an unjust gain making it difficult for the manager to trace a particular errors/problems top a particular department. The rate of compliance with the control procedures installed in the coy have been reduced due to negligence of duty, carelessness, mistakes and even personal factors. These factors are problems to the banks and eventually undermine the effectiveness and efficiency of the internal control system.
1.3 OBJECTIVES OF THE STUDY
The following objectives to this research work stand to be achieved;
- To ascertain whether there is adequate division or segregation of duties in the bank.
- To ascertain whether accountability and transparency has put to check the circumvented of due process in financial activities of Ecobank Plc.
- To know whether there is a system of adequate authorization and recording to provide reasonable accounting control over assets, liabilities, revenues and expenses.
- To know whether there have been errors or irregularities that has been occurring without being noticed in the establishment.
- To know the steps taken when inefficiency is detected in the internal control system and to know the effect on accountability and transparency in the firm.
- To determine whether adequate corrective measures or punishment is given to the offenders to prevent further occurrence of the defects in the future.
1.4 RESEARCH QUESTIONS
The research questions were formulated as follows;
- Does an internal control system help in the improvement of accountability and transparency in banks?
- Does accountability and transparency help to build an effective internal control?
- Is there adequate division or segregation of duties in banks?
- What are the steps taken when inefficiency is detected in internal systems in the bank?
- Is there any system of adequate authorization and recording to provide reasonable control over assets, liabilities, revenue and expenses?
1.5 RESEARCH HYPOTHESIS
The research work is based on the following hypotheses which are formulated in tackling the problems in the subject.
- Ho: Accountability and Transparency has no significant
effect on effective internal control system.
Hi: Accountability and Transparency has a significant
effect on effective internal control system.
- Ho: Internal Control system has no significant impact in
the improvement of accountability and transparency in banks
Hi: Internal Control system has significant impact in
the improvement of accountability and transparency in banks
1.6 SIGNIFICANCE OF THE STUDY
This research work will enable the researcher to establish the possible factors causing improper accountability and transparency through effective internal control system in the conduct of Ecobank Plc. It is equally expected that, the research work will help to provide solution which will be applied in improving the stability in the banking sector. This study therefore, will expose the weakness of the banking sector in their internal control system.
The study would serve as a secondary source of information or material to other scholars. The study will generally be of immense importance to the government to defect fraud and corruption in Nigeria.
1.7 SCOPE OF THE STUDY
This study as the case may be covers the accountability and transparency of internal control system with particular reference to Ecobank Plc. The study takes a holistic approach in
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