THE IMPACT OF INTERNAL MEASURE IN AN ORGANIZATION FINANCIAL MANAGEMENT

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CHAPTER ONE

INTRODUCTION

  1. BACKGROUND OF THE STUDY

      Every organization both profit and no- profit organization has its objective and goal in mind to achieve.

      For the non-profit making organization their goal is to satisfy the social need of the citizen and in the effort to achieve these purpose supervision more often than not play a vital role. The size and scope of these organizations have sometimes made it hard for the executors of operations.

      It is in this light that internal control established n=by management is initiated. For an organization to carry out is business there must be some factor put in peace for the smooth running of the organization like materials, machines, money e.t.c

      These need to be well co-ordinate in order for the success of the organization to be achieved. These factors are used by a group of person know as management. Neither can management exist without organizations both are inseparable.

       The systems of internal control provides assurance to management of the depend ability 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 clearing a cheque because of rampant incident of fraud and ferries which have placed bank loss on average of n1m each working.

      Management used internal control as a tool to check its staff due to the fact that managers are not able to monitor the activities of the organization. It therefore adopt the internal control in such a way that the system check itself and any irregularity within the system is been detected and corrected.

      To ensure that the system checks itself, management could be device such as segregation supervision of work and acknowledgement of performance. The effective arrangement and implementation of this control system would ensure proper management.

  1.   STATEMENT OF PROBLEM

     We might not really understand the impact of internal control in an organization until probability we run an organization void of internal control system the absence of adequate internal control measure exposes the financial management of an organization to certain threat schwa as

  • Incorrect financial statement and loss of the company’s assets
  • Stealing and mismanagement of organization vital document which may be done by an employee to take undue advantage
  • Incorrect and unreliable financial, record which may lead to loss or organization integrity.
  • Non implementation of accounting policies in consistency with the applicable legislation appropriate in presentation of financial statement.
  1. RESEARCH QUESTION

         The following research will be used to form the research hypothesis and they are:

  1.  To what extent does the internal control measure impact on appropriation of organization assets and funds.
  2. To what extent dues perpetration of frauds and losses of revenue in an organization are as to result of weakness in the internal control system.
  3. To what exte4nt does the internal control enhance a true reflection of organization activities as presented in the financial statement?
  4. To what extent does the relationship exists between internal control and proper keeping of accounting records.
    1. OBJECTIVE OF THE STUDY

      The overall purpose of this research work is to evaluate and determine the impact of internal measure in an organization financial management. A well defined organizational structural help management to run the business in an orderly manner. This enhance operational and efficiency, which is the important feature of internal control. Specifically, this research work stands to achieve the following objective:

  1. To determine the impact of internal control to proper use to organization 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 measure.
  4. To determine the relationship between the internal control measure and proper keeping of accounting records.
THE IMPACT OF INTERNAL MEASURE IN AN ORGANIZATION FINANCIAL MANAGEMENT