APPRAISAL OF INTERNAL CONTROL SYSTEM IN LARGE FIRMS
ABSTRACT
This initiative focused on the evaluation of internal control systems in large corporations. The study sought to ascertain the strengths and weaknesses of internal control systems in public limited liability corporations, as well as how existing controls aided management in achieving organizational goals.
The research in this project determined if
1. There is a periodical cash survey to guarantee that the amount voted into imprest is used wisely.
2. The vast majority of employees are paid through banks, and all permissible deductions are remitted to their respective authorities.
3. Stocktaking is typically performed by a team comprised of store and accounting personnel. Payroll preparation and payment are not typically performed by a single individual.
Data for the study was gathered from both primary and secondary sources. Primary data was collected mostly through the use of questionnaires, augmented by an oral interview performed among the company’s employees. The data was examined using the chi-square and percentage methods. A test was performed, and the results demonstrated that the company’s internal control system is effective.
CHAPITRE ONE
1.0 INTRODUCTION TO THE STUDY
1.1 Internal control is of particular importance in large-scale commercial enterprises. It is extremely beneficial to both the organization’s management and auditors since it allows them to do business in an orderly and effective manner. It protects its assets and ensures the correctness and dependability of its records.
The major goal of a profit-oriented company is to run the firm as efficiently as possible. That is, to maximize profit at the lowest possible expense.
This is made feasible by having robust internal controls that serve as an organization’s regulator. Internal control is analogous to a person’s nervous system. It encompasses the entire organization’s internal control since the nervous system contains five components that aid in the coordination of the organization’s actions. They are as follows:
1. The command and control environment
2. Risk evaluation
3. The information and communication (accounting) system
4. Monitor and control actions
5. Keep an eye on things.
1.THE MANAGEMENT ENVIRONMENT
The control environment sets the tone of an organization through affecting people’s control consciousness. It can be thought of as the foundation for the other elements of internal control. Integrity and ethical principles; commitment to competence board of directors or audit committee, management philosophy and operational style organizational structure; delegation of power and responsibility to human resource policies and practices are all control environment variables.
2. RISK ANALYSIS
Risk assessment is the second component of internal control. Management should identify and analyze the elements that influence the risk that the organization’s objectives will not be met, and then strive to manage that risk. Management risk assessment entails taking into account all of the elements that affect the organization’s goals.
3. The information and communication system for accounting The accounting information system, as well as the manner responsibilities for internal control over financial reporting are transmitted throughout the business, are of fundamental importance to auditors.
As aids in communicating policies, an accounting information system should include a chart of accounts and a manual of accounting policies and procedures.
4. ACTIVITIES DE CONTROL
Control activities are rules and processes that aid in the execution of management instructions. These rules and procedures encourage actions and address the dangers that the organization faces.
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APPRAISAL OF INTERNAL CONTROL SYSTEM IN LARGE FIRMS
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