Internal Control System And Fraud Prevention In Niger Mills

1.2 STATEMENT OF THE PROBLEM

It is important to note that auditing is an exercise done in order to verify the accounting procedures undertaken by the auditors internal or external. Productivity can only be seen if a firm or establishment is well audited against financial misappropriation. In addition, auditing brings about sanity in an establishment. However, if an establishment has been audited but the pertinent question arises: has the establishment been audited on regular or routine basis? If done are there accountability misappropriations discovered in the course of verification?

This study therefore tends to find out the influence of internal control on fraud prevention in an establishment.  

1.3 OBJECTIVES OF THE STUDY

1. To find out how functional is internal control to management control in Niger Mills.

2. To appraise the contributions of the internal audit to management control towards the staff productivity in Niger Mills. 

3. To find out to which extent the internal control unit has been regularly checked to aid management controlin Niger Mills.

4. To identify the problems associated with the internal control in management control and productivity. 

1.4 RESEARCH HYPOTHESIS

The research hypotheses were formulated by the researcher in null and alternative statements.

H0: There is no significant relationship between internal control system and productivity in management controlin Niger Mills.

H1: There is significant relationship between internal control system and productivity in management controlin Niger Mills.

H0: Internal control system does not help Niger Mills management keep proper control of its activities and responsibilities.

H2: Internal control system helps Niger Mills management keep proper control of its activities and responsibilities.

1.5 SIGNIFICANCE OF THE STUDY

It may seem unbelievable to discover that many citizen of this country still lack of fundamental idea or knowledge of internal control function and productivity. It is therefore the aim of this study to examine internal control system and fraud prevention. It is believed that at the end of the study, that the findings will enlighten the public on how to ascertain the concept of internal audit function and productivity in a company like in Niger Mills. The study will also provide critical information to government, companies at all level in their effort in managing internal auditors. However, the study will act as source of reference for further researches on this subject. Specifically, the research will provide useful and meaningful insight into weakness in the current internal audit even in the oil company and provide useful information for making changes in the implementation of audit function. The research will serve as a fuel of new reasoning and further research work in audit practice in the organization. The impact of the study on both accounting and auditing theory practice and standards could be tremendous. It is agreed by the researcher that the study shall be of immense benefits to the accounting students of higher institution, management of auditor general office and seasoned professional Accountants. 

1.6 SCOPE OF THE STUDY

This study is centered on internal audit as a tool on management control a case study of in Niger Mills. 

In the cause of the study, the researcher encounters some limitations which limited the scope of the study; 

Staff Reluctance: In most cases the staff of the used study often feels reluctance over providing required information required by the researcher. This result in finding information where the structured questionnaires could not point out.

Researcher’s Commitment: The researcher, being of full time student spent most of her time on other academic activities such as test, class work, assignment, examination etc which takes average focus from this study.

Inadequate Materials: Scarcity of material is also another hindrance. The researcher finds it difficult to long hands in several required material which could contribute immensely to the success of this research work. 

1.7 DEFINITION OF TERMS     

Internal control:Internal control, as defined in accounting and auditing, is a process for assuring achievement of an organization's objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations and policies.

Accounting System: Royal Linlbery and Chon (1972) hold that accounting system is the total structure of record and procedures which discover record, classify and report information or on the financial position of a government unit or any funds balance account of a group and organizational components.

Auditing Procedures: According to R. Glymme Williams (1974). He defined auditing procedures as acts to perform during the course of an examination. Auditing procedures are based on professional judgment applicable in the circumstances.

Audit technique: R. Glymm Williams (1974) defined audit technique as a method or details procedures essentials to express or execution in an art of science technique and procedures are classed related.

Auditing Standards: These are measuring devices or models to which the audit must perform.

Auditing: the Institute of Chartered Accountant in England and Wales defined auditing as

“the independent examination and investigation of the books, accounts and vouchers of a business with a view of enabling the auditor to report whether the balance sheet and profit and loss account are properly drawn up so as to show a true and fair view of the state of affairs and the profit and loss of the business according to the best of the information and explanation obtained by the auditor”.

Productivity: According to Mali (2006) productivity is defined as the measure of how well resources are brought together in organization and utilized for accomplishing a set of results. Productivity is reaching the highest level of performance with the least expenditure of resources. It is the effective user of the factors of production to produce goods and services that means productivity is the output resulting from a given resources input in a given time.

Management control system: A management control system (MCS) is a system which gathers and uses information to evaluate the performance of different organizational resources like human, physical, financial and also the organization as a whole in light of the organizational strategies pursued. Management control system influences the behavior of organizational resources to implement organizational strategies. Management control system might be formal or informal.

1.8 ORGANIZATION OF THE STUDY

This research work is organized in five chapters, for easy understanding, as follows Chapter one is concern with the introduction, which consist of the (overview, of the study), statement of problem, objectives of the study, research question, significance or the study, research methodology, definition of terms and historical background of the study. Chapter two highlight the theoretical framework on which the study is based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding.  Chapter five gives summary, conclusion, and recommendations made of the study.