This research was focused on the determinants of internal audit effectiveness in the selected public sector office found in addis ababa mainly federal government offices. Zimra carries out internal audits regularly with the final external audit being carried between january and february every year. Pdf the effectiveness of internal control systems of. You may have been asked to complete this questionnaire as part of a scheduled internal audit or team risk assessment. The theory offers powerful tools to analyze systems of internal control and to understand interactions since an effective system of internal control is an integrated system with interrelated. Good governance in the public sector consultation draft for. Measuring the effectiveness of an internal control system. Assessing the effectiveness of internal control systems in. As a tufts university director, manager or administrator it is important to periodically determine if good business practices are being observed within your department. Internal audit is an effective tool in revenue management because internal auditors are. This research investigates factors that may influence iae within public sector organizations in saudi arabia, a nation just beginning to use internal audits.
The effectiveness of internal controls in revenue management. Pdf the effectiveness of internal control systems of banks. Public sector performance measurement system is a system that aims to help public managers assess the. Effectiveness of internal control system in state commercial banks in sri lanka mrs. In addition the paper proposes a methodology for recording. It had 3 specific objectives, 3 research questions and 3 hypotheses. It is to determine the auditors perception toward the effectiveness of internal audit work, influenced by the quality of audit work in order to perform in an effective manner as control instrument in. Fiftyeight responses from six district councils at shinyanga region were gathered using questionnaires, interviews and. The significance of upholding effective internal control system in organizations have been persistently and immensely emphasized, due to its positive effects on financial performance. The strategies is for effective functioning of an internal control system are followed. It was revealed that internal control is the back bone of a sound system of control in every organization. Prerequisites for effective control internal controls are the responsibility of the leadership of an organisation. Effectiveness of internal control system as a quality.
The impact of internal control effectiveness and internal. The recent global pressured on corruption control and management of public funds is the major factor that necessitate the implementation of good internal control system in every organization, both private and public sectors at. To determine if internal audit procedures are effective to safeguard assets of public sector organizations. Internal control and internal audit are not synonymous. Internal control, public sector, financial accountability, south western nigeria. Internal control is one of the vital tools used to control finances, safe guide assets and to checkmate incident of fraud, irregularities in every. There is a need to strengthen the internal control systems and mechanisms in the public sector in order for public institutions to maintain clean financial reports. To examine the effectiveness of internal control system at edweso. Strong external oversight by parliament and an effective public sector external audit. In the absence of a control system with internal audit as a safeguard for checking efficiency and effectiveness of that system, government offices are vulnerable to waste, corruption, and inefficiencies. I n t o s a i internal control standards for the public sector. Logistics internal control evaluation slice process, this selfassessment of internal control in the health sector tool distills the much longer slice tool to emphasize high priority areas.
Measuring the effectiveness of an internal control system by dr. Its role in the oversight of internal audit is focused on riskbased audit analysis, strategic and annual audit plans, audit results and performance, and followup of recommendations. This state of affairs often results in mistrust of the public in the internal controls in the public sector, particularly in the local government systems assemblies. This paper aims to illustrate a manner to increase effectiveness of internal control in the public sector by introducing performance management. Public sector performance score for ue countries pspue, which represents the objective of the current work, aims to quantify and present the real situation in terms of public sector performance. Internal control standards for the public sector preface the 1992 intosai guidelines for internal control standards were conceived as a living document reflecting the vision that standards should be promoted for the design, implementation, and evaluation of internal control. Factors affecting the internal audit effectiveness.
System of internal control is very important factor affecting the effective and efficient working condition in the bank. Thesis submitted to the department of accounting and finance of the school of business, college of humanities and legal studies, university of cape coast, in partial fulfilment of the requirements for the award of master of. Gamage, doctoral student, management and science university, malaysia prof. Impact of the effective internal control system on the. Effectiveness of internal control system as a quality control mechanism in public organizations david ackah moses pangka kondegri scientific study business economics miscellaneous publish your bachelors or masters thesis, dissertation, term paper or essay. Therefore, the purpose of this study will be to examine in the following. The importance of corporate governance in ensuring effective stewardship of public resources has influenced my decision on this area of study namely. According to dandago and suleiman 2005, both external and internal auditors are expected, based on their terms of engagement and the accounting and internal control system in place, to express professional opinion on the. Furthermore, in estonian business environment appears.
An assessment of internal control audit on the efficency. By building in internal control, it becomes part of and integrated with the basic man. An assessment of the factors influencing effectiveness of. Efficient internal control enables the prevention and detection of fraudulent activities in the institution.
Internal control should be built in rather than built on. Internal control increases the possibility of an agency achieving its strategic goals and objectives. This research seeks to evaluate the effectiveness of internal control system in the private sector. Supervisors should require that all banks, regardless of size, have an effective system of internal controls that is consistent with the nature, complexity. Factors that contribute to the effectiveness of internal. A study on effectiveness of the internal control system in. The impact of internal control systems on financial. Therefore, the aim of this paper is to examine the relationship between effective internal control system and internal audit effectiveness at local government level. Evaluation of internal control systems by supervisory authorities principle 14. The international framework is not intended to replace national and sectoral governance codes. Monitoring and assessment of internal controls across various functions is performed through continuous evaluations to ensure whether the implemented internal control system is effective as intended by the board of directors. According to mawanda 2008, a sound internal control system helps the firm to. David brewer and william list, ca, hon fbcs the objective of this paper is to propose a methodology by which management can measure the effectiveness of the organisations internal control system ics.
The internal audit definition and professional standards call for a focus on effectiveness and efficiency, but in reality, most auditors tend to focus more on effectiveness. This paper was generally designed to evaluate the effectiveness of internal audit in the nigerian public sector. Data and research on public governance including budgeting, public expenditure, publicprivate partnerships ppps, public sector innovation, public employment and public finances. Aaj fernando, university of sri jayawardenapura, sri lanka background the internal control system is the major part in any organization. Data and research on public governance including budgeting, public expenditure, public private partnerships ppps, public sector innovation, public employment and public finances. In kenya, a number of important trends have recently emerged within the manufacturing sector. With your download, get the 18 best papers relevant to this one, including 17 top related papers. Public internal control systems in the european union. The effectiveness of internal control system in a public sector service organization yogendrarajah, r abstract abstract. According to mawanda 2008, a sound internal control system helps the firm to prevent frauds, errors and minimize wastage. Abstract internal control system is the process by which an organization governs its activities for effective and efficient operation, reliability of financial. Request pdf the effectiveness of internal control system in a public sector service organization the effectiveness of internal control system in a public. Internal control must be cost effective and cost of august 2007 internal control an overview 5 implementation should not exceed the benefits derived from having the control in place. Impact of effective internal audit functions on public.
The goal of internal audit function should be to add value and improve an. Challenges and opportunities by teresa curristine, zsuzsanna lonti and isabelle joumard this article examines key institutional drivers that may contribute to improving public sector efficiency and focuses on one of them in more. The internal auditor ensures adherence to all financial, personnel, lending, data processing, the other administrative policy and procedure as well as the economy, efficiency and effectiveness with which resources are used. Internal control ensures effectiveness and efficiency of operations, reliability of financial reporting and compliance with applicable laws and regulations to which the company is subject. Challenges and opportunities by teresa curristine, zsuzsanna lonti and isabelle joumard this article examines key institutional drivers that may contribute to improving public sector efficiency and focuses on one of them in more detail. Internal control is established, maintained, and monitored by people at all levels within an agency. One important aspect of internal control is the internal audit. The broad objective of this research work is to establish the reliability and effectiveness of internal controls system in the public sector. Literature unegbu and obi 2012 defined internal audit as part of the internal control system put in place by management of an. Material internal control deficiencies should be reported to senior management and the board of directors. On a general basis, the study is set out to evaluate the effectiveness of internal audit in the nigerian public sector.
Impact of effective internal audit functions on public sector. Public internal control systems in the european union the three lines of defense in a public sector environment discussion paper no. Internal control is a process integrated with all other processes within an agency. Effects of an internal control of financial accountability in. Evaluation of internal control system in public sector abstract this research work has been able to assess the type of internal control system in public sector and how they operate bringing to light their strength and weakness. To find out how effective is internal control system in public sector organization system. Organisational changes and management attitude can have a profound impact on the effectiveness of internal control and the personnel operat ing the system. The importance of internal auditing in the public sector government auditing is a cornerstone of good public sector governance as it provides unbiased, objective assessments of whether public resources are responsibly and effectively managed to achieve intended results and also by promoting the appropriate ethics and values within the.
The internal control system in operation in kogi state regarding auditing of public sector account is not effective ho2. The assessment facilitates identification of internal. In general, internal auditors have to catch up with professional expectations and have a better balance of both effectiveness and efficiency. Public sector auditing particularly internal auditing is useful in managing public expenditure, ensuring financial accountability, and strengthening governance systems of public institutions asare, 2008. This vision involves a continuing effort to keep these guidelines up. It is to determine the auditors perception toward the effectiveness of internal audit work, influenced by the quality of audit work in order to perform in an effective manner as control instrument in public financial management. Guidelines for internal control standards for the public. Simple random sampling technique was used to select 4 of the federal government parastatals located in enugu state of nigeria. Ademola and alade 2015 examined the effect of internal control system in nigeria public sector using the nigeria national petroleum corporation as a case study.
Guidelines for internal control standards for the public sector. Guidance on monitoring internal control systems coso 2009. Ministry of state for provincial administration and internal security, nairobi. The aim was to use those factors identified from literature to design a model conceptual framework that can be used by public sector organisations in ghana for measuring and ensuring the effectiveness of internal audit units. This study aimed to examine the impact of the internal control effectiveness and. Auditing of public sector accounts in kogi state does not enhance effective accountability. Studies of internal audit effectiveness iae are few in number compared to studies of external audits. A study population of 182 made up of 127 accountants and 55 internal auditors in the. The aim of good governance in the public sector international framework is to encourage better service delivery and improved accountability by establishing a benchmark for good governance in the public sector. Good governance in the public sector consultation draft. This study, will identify the failures over the internal control system and it will help to management to overcome the deficiencies. The effectiveness of internal control system in a public. It becomes imperative that the internal controls should be kept alive and under close watch.
Internal control selfassessment questionnaire purpose. The main objective of the study was assessing the effectiveness of internal control system in the public sector of ghana in selected assemblies in the northern region of ghana using a mixed research design approach. This research work has set out to determine the relationship between effective internal control system and improve financial management. The effectiveness of internal control system and financial accountability at local government level in nigeria 3. The internal control system is intertwined with an entitys activities and is most effective when it is built into the entitys infrastructure and is an integral part of the essence of the organisation. Specifically, section 404 of sox requires management of public companies to issue an internal control report in which they take responsibility for maintaining adequate internal control, and make assertions concerning their. Pdf the backward development in the public sector has been attributed. Both primary and secondary source of data were used while chisquare and pearsons correlation coefficient were used to test the hypothesis. Effect of internal control systems on performance 5. Research pdf available august 2016 with 11,152 reads how we measure reads. Mostly, the efficiency and effectiveness of the management operations in public sector are ensured by the effectiveness of its employees. The effectiveness of internal control system in a public sector. An assessment of the effectiveness of internal audit unit.
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