The individual components of an internal control system are known as controls or internal controls.
The study used descriptive and diagnostic research design on a sample of 21 out of a population of 53 microfinance institutions with respondents being internal auditor, senior accountant and five other staff in accounting department.
Stratified and simple random sampling techniques were used to select study sample. Primary qualitative data was gathered using questionnaires and structured interview was administered to employees of the institutions.
The data was edited, recorded and analyzed in tables and charts. The study found out segregation of duties is positively related to financial performance. Through institution of stages in accounting process as well as internal check the study concluded there was effect on financial performance thus recommending proper handling of division of labour, job rotation and job description.
Similarly authorization and approval of accounting transactions are directly related to financial performance. The study concluded number of people authorizing payments as well as signatories to bank accounts should be limited as a control.
Approval amount in the document go hand in hand with the position of the officer attending to the document.
Thus the study recommended relevant training to the staff and sufficient provision of policies and procedure manuals. Internal audit functions improved financial performance especially operational and financial review. The study concluded in reviewing financial reports auditors must familiarize themselves with relevant policies and procedure manuals.
It therefore recommended application of audit plans, relevant international auditing and accounting standards while adhering to professional ethics.
Further vouching positively affects financial statements. The study concluded officers do thorough enquiries, review support documents, account history of the clients hence recommending training of officers and processing at central point.Effect of Internal Control on Financial Performance of Firms in Nigeria.
(A Study of Selected Manufacturing Firms) Eniola, Omoniyi Jacob1,Akinselure, Oluwafemi Philip2 Internal controls were looked at from the perspective of Control Environment. Effects of IT on Consideration of Internal Control in a Financial Statement Audit - PowerPoint PPT Presentation The presentation will start after a short (15 second) video ad from one of our sponsors.
of internal controls must be done in relation to the components of internal control. Judging whether an internal control system of an organization is effective or not is a subjective verdict.
The effect of external audits of internal control over financial reporting on financial reporting for clients of Big 4, Second-tier, and small audit firms.
definition, i.e. “Internal control is the system of internal administrative and financial checks and balances designed by management, and supported by corrective actions, to ensure that the goals and responsibilities of the organization are achieved” (Cahill, ).
internal control measures seem ineffective, and they have no such positive effective effect anticipated. In this study, we seek to test the impact of internal controls on financial.