Accounting Project Topics

The Impact of Internal Control System on the Financial Management of an Organization (A Case Study of the Nigeria Bottling Company Plc, Enugu)

The Impact of Internal Control System on the Financial Management of an Organization (A Case Study of the Nigeria Bottling Company Plc, Enugu)

The Impact of Internal Control System on the Financial Management of an Organization (A Case Study of the Nigeria Bottling Company Plc, Enugu)

Chapter One


The overall purpose of this research work is to evaluate and determine the impact of internal measures on organizational financial management.

A well defined organizational structure helps management to run the business in an orderly manner. This enhances operational efficiency, which is an important feature of internal control.

Specifically, this research work stands to achieve the following objective.

  1. To determine the impact of internal control on the proper use of the organization’s funds and assets.
  2. To ascertain whether the perpetration of fraud and losses of Revenue in an organization is a result of weakness in the internal control system.
  3. To ensure whether a true reflection of organizational activities is presented in a financial statement where there is an active observation of internal control measures.
  4. To determine the relationship between internal control measures and proper keeping of accounting records.




The chapter takes a critical look on the nature and circumstance of internal control, the review of related literature in a research study is a search for the discovery of existing information on a given research problem. It sets the current research into perspective to show “the state of the art” a literature review must be done in a con text of the research problem.

In this study, related literature that highlight properly internal control system will be reviewed to enable and enhance our understanding of the research work so that the intended aims and objectives of the research can be met.


The United Kingdom Auditing practices committee (1979) defined internal control as “the whole system of control, financial and otherwise established by management in order to carry on the business of the enterprise in an orderly band effective manner to ensure adherence to managerial policies and directives, safeguard the assets and ensure as far as possible the completeness and accuracy of the records the prevention and detection of errors the fraud ,and the timely preparation of financial information”

According to statement of accounting standards, (SAS) internal control is the combined plan, method and procedures which can safeguard the firm’s assets promote operational efficiency and encourage adherence to prescribed policies.”

Also according to Robertson and Davis (1988:169) “internal control system is a set of client procedures both computerized and manual imposed on the accounting system for the purpose of preventing, detecting and correcting errors and irregularities that might enter the system and thereby affect the firm’s financial statement.

The SAS (statement of accounting standard) further explains that internal control maybe categorized as either accounting or administrative controls. Accounting control is concerned with the plan of the organization and all the co- coordinated methods and procedures which are implemented with a view of safeguarding assets and enhancing reliability of financial records.

An administrative control comprises of the plan of the organization and all co-ordinates methods and procedures that are concerned with operatically efficiency an adherence to management policies and directives. This is also known as operational controls.





In this chapter, issues that would be discussed are as follows: Research design, area of the study, population of the study, sample size and sampling technique, instrument of data collection, validity and reliability of the instrument and method of data analysis.


For the purpose of carrying out a good analysis and reaching a reasonable conclusion, data are been collected from various sources either through the primary source and secondary source.


Data used for this research work were collected mainly from both primary and secondary sources.

Primary source: The primary data used for this work were gotten through questionnaire and oral interview which was administered to the respondent.

Secondary Source: The secondary data was gotten from textbooks, journals, newspapers, magazines and bulletin.


This study covers the Nigeria bottling company Breweries which is precisely situated at 9th mile corner Enugu.


This research was only limited to the employees of Nigeria Breweries. The population of this study which consist of over 2,000 workers but the target population of this work consists of 500 staff which is made up of Accountants, Directors, External Auditors and Managers and other stakeholders put together.




This chapter is concerned with presentation, analysis and interpretation of data tested with regard to the hypothesis stated in chapter one to determine either the rejection or acceptance of Ho hypothesis






Based on the data collected, analyzed and tested in chapter four, the following findings were made as summarized below:

  • Internal control measures ensure proper use of organizational fund and assets.
  • Perpetration of fraud and losses of revenue in an organization are as a result of weakness in the internal
  • A true reflection of organizational activities is presented in financial statement through the performance of internal control.

In accordance with the findings, recommendation and conclusion are made to ensure the effectiveness of internal control to management functions.


The financial management of any organization can be measured by the standard or the effectiveness of the internal control system and as well as the policies implemented by the management. A well-managed business entity will not only attract interest of outsiders but will also retain the zeal of the existing owners and users of the financial information.

Therefore in conclusion, it will be said that the financial management of any organization cannot do without internal control as true and fair presentation of financial statement may never be possible if the board and senior management are not committed to providing a well planned internal control system.


The role, responsibilities and procedures to be adopted by the management, internal audit department as well as the account department to the overall management of an organization should be focused on ensuring the safety of the assets and soundness of their operations.

  • Management should ensure that there are adequate organizational controls and that each staff knows his duties and equally ensures effective segregation of duties
  • The internal control system should be remolded and strengthened to position the staff in carrying out their duties efficiently and effectively and at the same time evaluated periodically to strengthen its weaknesses in the organization.
  • Finally, the management of the organization should be reviewed periodically so as to cope with modern trends in organizational fraud prevention.


  • Aguolu, A.O (2002) fundamental of Auditing, Enugu: meridian publishers.
  • Adeniyi Adeniji (2003) Auditing and investigation, El-toda ventures limited, Nigeria pp 165-175.
  • Chambers, A.U (1979) The structure of internal audit New York Ronney Inc.
  • Chuke, C.I (2001) Basic principles of financial management, Ibadan prentice hill international.
  • Emekekwue P. (2003) Comparative Banking System publication of B.A.S.E and O.A.U pp 371.
  • Eze, J.C (2005) Principals and technique of Auditing, New enlarged edition, Enugu JTC publisher.
  • Igwenagu, C. (2006) Basic statistic and probability Enugu: Prince Press Publication.
  • Joseph, C.E (2005) Principles and Techniques of Auditing New and Enlarge Edition Enugu.
  • Leslie, R.H (1993) Internal audit functions and experimental investigation, Home woodlion, Richard Irwin.
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