CHAPTER
1----INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The
aim of every organization whether private or public is to have a successful
operation which leads to the achievement of corporate aims of objectives. This
requires that the organizations assets and resources are effectively managed.
Therefore the need to protect the firm’s assets and the adoption of established
procedures and policies for successful operations is imperative. Internal controls consist of all
procedures and methods which the firm applies to protect its assets and conduct
a successful operation.Emma Zhang (2016).
The essence is to prevent fraud and losses arising out of fraudulent
activities. Internal control detects deviations in financial records through
the adoption of internal control measures. Such as establishing a system of
checks and balances, adopting an authorization procedure. The essence of
authorization is to verify the validity of transactions. Segregation of duties
to provide for check and balances and the detection of errors in the operation
of the firm and taking corrective measures. The essence is for operational
efficiency and effective communication.
Internal control measure also involves the
The
maintenance of an effective human resources through the establishment of clear
line of responsibility and authority. Other internal control measures include
the physical protection of the firm’s assets, processes and data, Documentation
and record management for the preservation of accurate records and the
monitoring of the firms operations. The study seeks to appraise the role of
internal control measure in the prevention of fraud and operation errors in
Ghanaian firms.
1.2
STATEMENT OF THE PROBLEM
The
increasing level of fraud and inefficient operation is associated with lack of
good internal control measures. The process of achieving success in business
cannot be disassociated with sound internal control policies as many firms
conduct their business without the adherence to sound principles of management
as internal control measures. Consequently operations are not properly
segmented to establish a clear line of responsibility and authority which leads
to inefficient workforce, no proper documentation and record keeping leading to
errors in record keeping and fraudulent activities. Also many firms do not take
adequate measure to protect their assets, processes and information and lack
good monitoring and evaluation method. The study seek investigate the role of
internal control measure in the prevention of fraud and operation errors in
Ghanaian firms.
1.3
OBJECTIVES OF THE STUDY
The
main study objective is to investigate the role of internal control measure in
the prevention of fraud and operation errors in Ghanaian firms; while the
specific objectives include
1 To appraise the concept of
internal control and internal control measures.
2
To determine the role of internal control measure in the prevention of fraud
and operation erros.
3 To determine the role of internal
control measure in the prevention of fraud and operation errors in Ghanaians
firms.
1.3
RESEARCH QUESTIONS
1 What is the internal control and
internal control measures?
2
What is the role of internal control measure in the prevention of fraud and
operation erros?
3 What is the role of internal
control measure in the prevention of fraud and operation errors in Ghanaians
firms?
1.4
STATEMENT
OF HYPOTHESIS
The statement of the hypothesis of the study is stated in
null
Ho The level of fraud and operation error in ghanian firms
is low
Ho The internal
control measures in ghanian firms are ineffective
1.5
SIGNIFICANCE OF THE STUDY
The study seeks to provide an
evaluative appraisal of internal control and internal control measures with the
view of determining its applicability in Ghanaians firms
1.5
SCOPE OF THE STUDY
The study focuses on the
investigation of the role of internal control measure in the prevention of
fraud and operation errors in Ghanaians firms.
1.6 LIMITATION OF THE STUDY
The study was confronted with logistic and
geographical constraint
1.7
DEFINITION OF TERMS
INTERNAL CONTROL DEFINED
Internal
controls consist of all procedures and methods which the firm applies to
protect its assets and conduct a successful operation. The essence is to
prevent fraud and losses arising out of fraudulent activities.
FRAUD
DEFINED
The falsification and
misrepresentation of financial record of the firm
OPERATIONS
MANAGEMENT DEFINED
Operations management is the
management of business activities to create high efficiency. It is concerned
with converting materials and labor into goods and services as efficiently as
possible to maximize the profit of an organization.