Abstract:
This project work which is a causal or explanatory survey was designed to assess the effectiveness and importance of internal controls.
The main purpose of this project work is to assess how effective internal controls help to prevent, detect and deter frauds and also safe guarding of company assets.
The population used for the study was made up of management, staff and customers of Akuafo Adamfo Cocoa buying Company Ltd, Kumasi. In research, it is often impossible to study the entire population, so out of the population, a sample was chosen using a simple random sampling method.
The people who made up the samplewere the respondent for the researcher(s) to come out with the findings. The data collection methods used was questionnaire and interview.
Findings revealed that, the control environment, risk assessment component,control activity, information and communication system and monitoring system were found to be functioning effectively
Recommendations were made which included: Management should evaluate, and discuss and appropriately consider control issues when planning for new products or activities since these are sometimes risky.
Finally, management should embark on prompt effective follow-up procedures to ensure that, appropriate change or action occurs in response to changes in risk.
Description:
Any entity of whichever form or size should put in place its own system of controls in order to achieve its objectives (Kaplan, 2008). A system of effective internal controls is a critical component of company management and a foundation for the safe and sound operation of organisations. However, ineffective internal controls result in ineffective programmes and eventually leading to losses (Campbell, 2008).
That is why the Retired Executive Vice President of American Savings Bank, Mary Locatelli in September, 2003, made it known that, the recent incidence of corporate failures and accounting frauds are mostly preceded by failure in companies internal control structures. (Directorship Journal, 2003)
