ENHANCING THE INTERNAL CONTROL SYSTEM AT NORVATIS NIGERIA LIMITED

Department: accounting project topics | Type: Project topics and materials | Format: Ms Word, PDF | Attribute: Documentation Only | Pages: 106 Pages | Chapters: 1-5 chapters | Price: ₦ 3,000.00

2,399 marked this research material reliable.
Call or whatsapp: +2347063298784 or email: info@researchcub.info
ENHANCING THE INTERNAL CONTROL SYSTEM AT NORVATIS NIGERIA LIMITED
ENHANCING THE INTERNAL CONTROL SYSTEM AT NORVATIS NIGERIA LIMITED

CHAPTER ONE

INTRODUCTION

1.1       Background to the Study

An organization can be said to be successful when the measures it has put in place to support its operations and facilitate the achievement of its objectives are very effective. Such measures may include, but not limited to, having policies and procedures for execution of operations, establishing standards for recruitment and competency development of employees, development of policies which govern the behaviour of organizational members, having security measures to guarantee assets protection, establishing proper procedures for record keeping, defining reporting relationships among organizational members, establishing procedures for authorization of transactions and the limits thereon as well as top management supervision. These measures, together with many others, such as internal auditing, budgeting, performance evaluation and the likes, that an organization may implement in order to achieve its objectives, constitute the internal control system of the organization.

            Many business failures around the world, in the recent past, have been partly attributed to failure in internal control system. It is common knowledge that the collapse of some notable organizations across the world, like Enron Energy Corporation, WorldCom, Tyco (in the US); Maxwell Communications Corporation, the Mirror Group Newspaper (in the UK); as well as NITEL and NAFCON (in Nigeria) was due to failure in internal control system and by extension corporate governance failure. Few years ago a number of manufacturing or pharmaceutical organizations in Nigeria which were known to be performing excellently in financial terms collapsed irrespective of the existence of internal controls (ICs).

By internal control system it means that all the policies and procedures adopted by the directors and management of an organization to help in achieving their corporate objective of ensuring a practicable, orderly and efficient conduct of business activities which include strict adherence to internal policies, the safeguarding of assets, the prevention and detection of frauds and errors, the accuracy and completeness of accounting records, and the timely preparation of reliable financial information (Ofori, 2011). Internal control can be said to be measures introduced by an organisation to ensure a prompt achievement of the organisation’s corporate objectives, goals, visions and missions. They can be viewed as a set of policies and procedures employed by an organisation towards ensuring appropriate transactions so as to avoid waste, theft, fraud and misuse of organisation’s resources.

Management of many organisations now use internal control system as a tool to checkmate staff activities as a result of managers’ inability to monitor the activities of the organisations. They therefore employ the internal control system in such a way that the system checks itself and any irregularity within the system is being detected and corrected. To ensure that the system checks itself, management could use devices such as segregations, supervision of work and acknowledgement of performance. The effective arrangement and implementation of this control system would ensure proper management.

Internal controls are expected to assist organisations, whether profit making or not, achieve their objectives. However, the collapse of organisations like Enron, WorldCom, NITEL and NAFCON have raised concerns about the relevance and influence of internal control especially as it affects the financial performance of an organisation. Furthermore, many empirical studies like those carried out by Kinyua (2016), Kiabel (2007), Nyakundi, Nyamita & Tinega (2014), Njeri (2014), Ejoh & Ejom (2014), Etengu & Amony (2016), and the likes, focus on industrial sectors such as manufacturing, banking, tertiary education, agriculture as well as oil and gas. There seems to be no empirical research, especially in Nigeria that focus on the effect of internal control system on financial performance of pharmaceutical organisation. Hence, there is need to investigate the effect, if any, of internal control on the financial performance of pharmaceutical organisation in Nigeria and the nature of the relationship between internal control and financial performance of pharmaceutical organisation. Therefore, this study will seek to examine the effectiveness of internal control system on financial performance of Norvatis Nigeria Limited.

1.2       Statement of the Problem

The continous failure and extinction of many business organisation and corporate scandals being experinced by many notable organisations in Nigeria have been attributed to be as a result of weak internal control system by KPMG (1999). The failure of fiirm like Enron in 2001 was as a result of precipitous decline in investor confidence in the capital markets of the firm. The federal government through the regulatory authorities has responded to this, by passing guidelines using SAS2 under information which is to be disclosed in financial statements. The guidelines outlined the roles of corporate executives, corporate directors, lawyers, accountants and created a board oversight regime for auditors of public companies. In a bid to enhance accountability and restore investor’s confidence, the guidelines emphasize the critical role of internal control over financial reporting. This brought about the issue of corporate governance particularly in public institutions.

International Auditing Guidelines (IAG) deals with the auditor’s responsibility for detection of material misstatement resulting from error when carrying out an audit of financial statements. The guidelines in conjunction with the related SEC rules and auditing standard No 2, established by the public company Accounting Oversight Board (PCAOB), requires management of a public accounting and the organisation’s independent auditor to issue two new reports at the end of every fiscal year. These reports must be included in the organization’s annual report filed with the Securities and Exchange Commission (SEC). In the past, an organization’s internal controls were considered in the context of planning the audit, but were not required to be reported publicly except in response to the SEC’s form requirements when related to a change in auditor. The new audit and reporting requirements have drastically changed the situation and have brought the concept of internal control over financial reporting to the forefront for audit committees, management, auditors, and users of financial statements. The new prerequisites listed material weakness in internal control system over financial reporting, and made it a compulsion that both management and the independent auditor must publicly report any material weakness in internal controls system over financial reporting which occurs as a result of physical year, at the end of assessment dates. Under both PCAOB auditing standard NO 2 and the SEC rules implementing the guidelines, the existence of a single material weakness requires management and the independent auditors to conclude that internal control system over financial reporting is not effective. It is on this foundation that this study seeks to examine the use of internal control system in an organization by using Novartis Nigeria Limited as a case study.

1.3       Research Question

The following are some of the questions which this study intends to answer:

1)         To what extent does weakness in the internal control system of an organization have impact on the perpetration of fraud and losses of revenue?

2)         What is the relationship between internal control system and organizational performance?

3)         Is there a relationship that exists between internal control system and proper keeping of accounting records?

1.4       Research Objectives

The general objective of this study is to assess the impact of internal control system on the financial performance of Novartis Nigeria Limited. The specific objectives are:

1)         To investigate impact of weakness in the internal control system of an organization on the perpetration of fraud and losses of revenue

2)         To determine the relationship between internal control system and organizational performance

3)         To find out the relationship that exists between internal control system and proper keeping of accounting records

1.5       Statement of Hypothesis

This research is undertaken on the basis of the following hypothesis.

1)         There is a significant relationship between weakness in the internal control system of an organization and the perpetration of fraud and losses of revenue

2)         There is a significant relationship between internal control system and organizational performance

3)         There is no significant correlation between internal control system and proper keeping of accounting records

1.6       Significance of the Study

There is no doubt that this research work has been conducted on internal control system, however much emphasis has been placed on the impact of a good internal control system on financial performance of Novartis Nigeria Limited. This study will go a long way in helping the management of Novartis Nigeria Limited to discover the effect of weakness in internal control system and suggest measures in correcting them. However, other manufacturing and pharmaceutical organizations in Nigeria can as well tap from this idea from Novartis Nigeria Limited to ensure a better internal control system that will curb excessive fraud in the organization and enhance improved financial performance of the organization. It will also reveal the problems caused by bad internal control system and be useful to students, scholars, lecturers and other third parties as it shall open new area of further research work and at same time advance challenges to up-coming researchers.

Moreover, the study will be more relevant to management and social science students because they will be exposed to the effect of internal control on organizational performance and not only that it would also serve as an eye opener to the fact that as managers, there are lots of issue relating to internal control within the organization which if left unattended to will jeopardized organizational goal of the company.

The study will also attempt to contribute to the available literature or researches that will serve as a guide for organizational staff in order to prevent fraud and risks within the organization.

Policy makers would also benefit from this study in formulating policies relating to the effect of internal control on organizational performance.

The study of the effect of internal control on organizational performance is another area of study that is wide for researchers to tap into. So, this study would benefit researchers in looking beyond the scope of the present study and impacting to the knowledge already acquired.

The effect of internal control on organizational performance will also help practitioners such as Auditor, tax practitioners, etc in increasing their credibility.

1.7       Scope of Study

There is no doubt that a good internal control system aids management effectiveness in its organization. This study will specifically pay more attention on the activities of manufacturing and pharmaceutical organisations in Nigeria and due to the logical point that not every organisation can be studied. This research is therefore limited to the Norvatis Nigeria Limited. The main of this study is to reveal the effect of a good internal control system in the financial performance of Norvatis Nigeria Limited.

 

 

1.8       Limitation of the Study

The main challenge of this study is the conservating nature of Norvatis Nigeria Limited and their apathy towards providing information, especially with respect to their internal operation policies. Also, human errors and biasness are other limiting factors of this study. This is because some data were obtained through discussions and interviews therefore there is the possibility of human error of omitting some vital information. Respondent may also exaggerate important information in order to give their organization a positive credit for fear of what seems an invasion into the organization’s privacy. Time and finance are other limiting factors encountered on this study.

1.9       Definition of Terms

The following terms have been used in the course of this study and as such need to be explained. They are as stated below:

Internal Control: it has been defined by the Auditing Planning committee (APC) IN UK as “the whole system of control financial and otherwise established by management in order to carry out the business of the enterprise in an orderly and efficient manner to safeguard the assets and secure as far as possible, the competence and accuracy of records, the prevention and detection of errors and fraud in accordance with the final preparation of financial statement.”

Control: is an exercise performed in the present to achieve a plan drawn up for the future.

Management: it is defined as the process of planning, organizing coordinating and controlling the activities of an organization. It is seen as a group of people who monitor and control the organization activities towards the achievement of the organization objectives.

Audit: this comes from a Latin word “AUDIRE”meaning to hear in other words it means official examination of account and records.

 

ENHANCING THE INTERNAL CONTROL SYSTEM AT NORVATIS NIGERIA LIMITED

Additional Information

  • The Project Material is available for download.
  • The Research material is delivered within 15-30 Minutes.
  • The Material is complete from Preliminary Pages to References.
  • Well Researched and Approved for supervision.
  • Click the download button below to get the complete project material.

Frequently Asked Questions

In-order to give you the best service available online, we have compiled frequently asked questions (FAQ) from our clients so as to answer them and make your visit much more interesting.

We are proudly Nigerians, and we are well aware of fraudulent activities that has been ongoing in the internet. To make it well known to our customers, we are geniune and duely registered with the Corporate Affairs Commission of the republic of Nigeria. Remember, Fraudulent sites can NEVER post bank accounts or contact address which contains personal information. Free chapter One is always given on the site to prove to you that we have the material. If you are unable to view the free chapter 1 send an email to info@researchcub.info with the subject head "FREE CHAPTER 1' plus the topic. You will get a free chapter 1 within an hour. You can also check out what our happy clients have to say.


Students are always advised to use our materials as guide. However, if you have a different case study, you may need to consult one of our professional writers to help you with that. Depending on similarity of the organization/industry you may modify if you wish.


We have professional writers in various disciplines. If you have a fresh topic, just click Hire a Writer or click here to fill the form and one of our writers will contact you shortly.


Yes it is a complete research project. We ensure that our client receives complete project materials which includes chapters 1-5, full references, questionnaires/secondary data, etc.


Depending on how fast your request is acknowledged by us, you will get the complete project material withing 15-30 minutes. However, on a very good day you can still get it within 5 minutes!

What Clients Say

Our Researchers are happy, see what they are saying. Share your own experience with the world.
Be polite and honest, as we seek to expand our business and reach more people. Thank you.

A Research proposal for enhancing the internal control system at norvatis nigeria limited:
Reviews: A Review on enhancing the internal control system at norvatis nigeria limited, enhancing, internal, control project topics, researchcub.info, project topic, list of project topics, research project topics, journals, books, Academic writer.
CHAPTER ONE INTRODUCTION 1.1 Background to the Study An organization can be said to be successful when the measures it has put in place to support its operations and facilitate the achievement of its objectives are very effective. Such measures may include, but not limited to, having policies and procedures for execution of operations, establishing standards for recruitment and competency development of employees, development of policies which govern the behaviour of organizational members, having security measures to guarantee assets protection, establishing proper procedures for record keeping, defining reporting relationships among organizational members, establishing procedures for authorization of transactions and the limits thereon as well as top management supervision. These measures, together with many others, such as internal auditing, budgeting, performance evaluation and the likes, that an organization may implement in order to achieve its objectives, constitute the internal control system of the organization. Many business failures around the world, in the recent past, have been partly attributed to failure in internal control system. It is common knowledge that the collapse of some notable organizations across the world, like Enron Energy Corporation, WorldCom, Tyco (in the US); Maxwell Communications Corporation, the Mirror Group Newspaper (in the UK); as well as NITEL and NAFCON (in Nigeria) was due to failure in internal control system and by extension corpor.. accounting project topics

ENHANCING THE INTERNAL CONTROL SYSTEM AT NORVATIS NIGERIA LIMITED

Project Information

Share Links

Download Post
Download Post

Search for Project Topics

Project topics in Departments

Do you need a writer for your academic work?