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Effective Internal Control System As A Means Of Dectecting And Minimizing Fraud In A Manufacturing Company
[A CASE STUDY OF NIGERIA BOTTLING COMPANY, ILORIN PLANT, KWARA STATE]
CHAPTER ONE -- [Total Page(s) 2]
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CHAPTER ONE
1.0 INTROUCTION
It is the primary responsibility in the management of business organization to prevent and detect errors, irregularities and frauds. The responsibility arises because of directors and other managers owe a contractual duty of care and must act in a stewardship capacity with regards to the property entrusted to them by the shareholders or other owners. They exercise this duty of care is a matter for them, be generally they discharge their duties by maintaining an effective internal control system.
In fact, internal control system mean "the whole system control financial and otherwise established by the management in order to carry in the business of a company in an orderly manner, safeguard its asset and secure as far as possible the accuracy and reliability of its record".
In other words, it is a complex series of continuous and inter-related activities design by the management to direct and monitor the affairs of the organization.
1.1 BACKGOUND OF THE STUDY
The main motive for internal control is to prevent and minimize fraud to its minimum. Fraud can be defined as an international misrepresentation financial information by or more individual among the management, employees or third party. It is a special case of criminal deception to obtain and undue advantage.
Moreover, the internal control system various one organization to another as regards the activities of individual. However, there is a frame work to every internal control system and these are usually in the from of objective measure of performance against the objective, analysis and appraisal of the actual deviation and appropriate action including the re-appraisal of the objective.
1.2 STATEMENT OF THE PROBLEM
This study intends to ascertain the importance, impact and effects of internal control system as a means of dectecting and minimizing fraud in a manufacturing company has been detected that some manufacturing company often fail to take proper records of their accounts which has always caused such company into present or future failure.
The failure of business recognition within the manufacturing company has brought up the motivations of this project work; effective internal control system in the case study, Nigeria bottling company, ilorin plant; the question is how to appraise the effects and importance of effective internal control system.
Conclusively, with the problems discussed above, the researcher will proffer solutions to the problems during the course of the study.
1.3 AIMS AND OBJECTIVE OF THE STUDY
This study aims at conducting a research in to the operational activities of the company (Nigeria Bottling Company, Ilorin). Therefore offers were made to review and evaluate its internal control system and make suggestion for correction or improvement where there are loopholes in the existing system.
The immediate purposes of this study are to establish;
i. To identify internal control system that would detect and minimize fraud in order to facilitate attainment of organization objective.
ii. That there is proper functioning of the organization.
iii. That all receipt is duly accounted for.
iv. That the work done by junior officers are checked by their supervisior, department heads to ensure conformity with established standard.
v. That purchases and sales of goods are properly carried out and necessary books and record are kept.
1.4 SIGNIFICANCE OF THE STUDY
The ultimate significance of this study is to enable the leaders managers handle the crime of counterfeiting handwriting documents materials in order to minimize fraud to its lowest possible so as to effect primary aim of business organization which is profit making. Likewise to let the management see need to make use of effective internal control system, in order to map out strategy to eradicate fraud entirely if possible.
An organization with ineffective internal control system adversely effect its progress therefore it is in this context that the researcher wishes to analyze and emphasize the need for internal control system in an organization and suggest ways by which effective control could be established in an organization.
1.5 SCOPE AND LIMITATIONS OF THE STUDY
This research work covers some strategic areas, such as effectiveness of internal control system of the manufacturing company with particular attention on staffing, knowledge, stall, discipline and supervision. It is also covers the role of an auditor with respect to effectiveness of internal control system. However, the problem encountered in the course of this study is the attitude of some respondents, some of the respondents answered just few questions leaving majority of the questions un-answered.
More so, the analyses of the study are based on responses of the respondents as well as the result of the interview conducted. Since there is no way of testing the degree of reliance of their responses, do data collection however, limited to the Nigerian Bottling Company, Ilorin plant alone, is due to financial, material, and time constraints. The study may not be a good reflection of the system, and it may result is not being applicable to true situation in totality.
CHAPTER ONE -- [Total Page(s) 2]
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