Internal Control: Its Role in the Reduction of Fraud and Professional Misconduct among SMEs (original) (raw)
Related papers
2019
In this research proposal, the researcher is interested in assessing the effect of internal control systems in detecting and preventing fraud in business organizations. We are interested in determining the effect of financial governance controls on the level of fraud prevention and detection in Organizations, and to investigate the effect of reporting and budget controls on the level of fraud prevention and detection in Organizations, to identify the challenges faced by organizations in properly using internal control to prevent and detect fraud, to make recommendations that can help improve the quality of internal controls in organizations by the use of a structured questionnaires targeted at specific businesses in Fako Division of Cameroon.
An Exploratory Study of Internal Control and Fraud Prevention Measures in SMEs
2012
Small business and entrepreneurship has emerged as an important area of research over the past 40 years. This paper revolves around the issues of the internal controls and fraud prevention measures on SMEs performance. The level of fraud incidence as reported by owners is still at a very low level and the overall cost incurred is still within expectation. However, there is a question of whether the low reported rate of fraud is due to adequate preventive actions currently employed by owners, or whether the owners are reluctant to reveal the truth in order to portray their efficiency and effectiveness in running their businesses. This conceptual paper attempts to analyze relevant literature on internal control, fraud, current trends on fraud and business crime prevention measure adopted by SMEs. Based on the literature, a future research could be suggested in the context of Malaysia. It is hoped that future research in this aspect will uncover the relationship between the effectivene...
The Impact Of Internal Control On Minimizing Fraud: The Case Of Small-Medium Enterprises
IAEME PUBLICATION, 2020
Affiliations face inside and outside forces that require an approach to empower them to continue being in a healthy financial condition. The affiliations' ability to meet their objectives with respect to remaining engaged and critical depends on the courses of action and systems similarly as the sufficiency of procedures developed to shield their exercises. Beginning from the workplace speculation and buttressed by the probability theory are inside control systems (internal control systems) which assure groundbreaking organization of benefits despite feasible and compelling exercises. However, the research implemented the quantitative methodology throughout distributing a questionnaire over 100 respondents in different SMEs for data collection, and then the collected data had been analyzed using the SPSS statistical tool for hypotheses validation. The results proved that there is a direct relationship between internal control systems and financial performance.
EFFECT OF INTERNAL CONTROL ON FRAUD PREVENTION OF THE LISTED MANUFACTURING INDUSTRIES IN NIGERIA
The effect of fraud in the manufacturing industries cannot be over emphasized as each fraud case has its devastating effect not only on the industry but also on the wider society and the whole economy at large. It is therefore imperative that manufacturing industries should make concerted efforts to prevent the incidence of fraud and put in adequate control measures at all times. The researcher conducted a critical study on the topic " effect of internal control on fraud prevention of the listed manufacturing industries in Nigeria, with the intention of finding out the extent to which fraud is actually prevented in manufacturing industries. The required data for this research work was obtained through questionnaire, oral interview conducted among respondents, text books, journals etc. from the data analysis carried out, (chi-square and ANOVA) the major findings were; inefficient management composition and policies have lead to the increase in the level of fraud witnessed in the manufacturing industries. Lack of proper supervision has lead to most of the fraud witnessed in the industry. Lack of training, nepotism and poor operations staff, poor segregation of duties, all have effect on numbers of fraud in the manufacturing industries. The study found out that manufacturing industries have put all necessary control measures required to prevent fraud and that each successful fraud in the industry always go through with the help of insiders. The recommendations advanced are as follows; manufacturing industries should ensure that their management composition and policies is efficient enough to control and check fraud. Staff remuneration should be reviewed to meet up with the present standard of living 2 in the country. Recruitment of staff should be based on merit and achievement but not on nepotism. Very importantly, proper system of internal control must be put in place to check fraudulent members of staff.
The influence of internal control on fraud prevention (Case study at Bank BRI of Cimahi City)
International Journal of Financial, Accounting, and Management, 2020
Purpose: The purpose of this research was to determine how much the influence of Internal Control against Fraud Prevention at Bank BRI of Cimahi City. Internal control is an interlocking set of activities that are carried out by the board of directors, management, and other personnel. It is designed to provide confidence in achieving certain goals within the organization. Fraud Prevention is a precautionary measure by creating policies, procedures, organization, control techniques, and employee participation. Research methodology: The research method used in this study was explanatory method. The number of samples in this study were 46 employees of Bank BRI of Cimahi City. The analytical method used in this study was Partial Hypothesis Test (T-Test) with significance level of 5%. The program used to analyze data was Statistical Package for Social Sciences (SPSS) Ver20.00. Result: According to this research, internal control has a significant effect on fraud prevention by 50.2% Limit...
Psychology and Education: A Multidisciplinary Journal, 2024
This quantitative study determined the level of effectiveness of internal control and internal audit as well as its relationship to business performance and examined their influence on Small and Medium Enterprises (SMEs). It employed a quantitative-descriptive and cross-sectional research design. The respondents of the study were the accountants or the employees of 21 SMEs within the vicinity of General Santos City, Philippines. The respondents must be employed by the businesses that they work with and have performed at least one internal audit within the entity and must have knowledge in internal controls as well as internal audit. Random sampling and adapted-modified research survey questionnaires were used to identify the respondent's level of effectiveness of internal control and internal audit and their influence to the business performance of the SMEs. The data gathered were treated using mean, Pearson's Correlation Coefficient, and multiple regression. Moreover, the results of the study showed that the level of effectiveness of internal control and internal audit and the business performance of the SMEs were considered high with the overall mean of 4.19, 4.32, and 3.97, respectively. Hence, it is recommended to use this study as a basis to identify any potential issues to enhance and strengthen the level of effectiveness of internal control and internal audit and their influence on the SMEs' business performance.
Fraud Management among Small and Medium Enterprises in Lagos, Nigeria
Olufemi Aladejebi , 2019
Abstract: Fraud is a debilitating factor that affects business growth and a major problem for many organizations especially SMEs since they have smaller resources to both prevent and recover from a fraud. SMEs have fewer anti- fraud controls hence they are more vulnerable to fraud. In a bid to reduce fraud and manage the risks proactively, SMEs needs to identify factors leading to fraudulent behavior. The paper seeks to evaluate fraud management among SMEs. Data was collected from two hundred (200) SME owners using questionnaire, however only 197 questionnaires were viable. The questionnaire was formulated using a five-point Likert scale. It was observed that the major causes of fraud are the weakling of societal values and financial pressure while changes in lifestyles indicate that fraud is being perpetuated. The study concluded that for effective fraud management, SMEs should implement fraud prevention measures such as strengthening societal values (integrity) building strong internal control measures to block the loopholes within the system, training programmes for SMEs operators and stringent disciplinary actions against erring officers. Keywords: SMEs, fraud, Fraud Theories, internal controls
THE INTERNATIONAL JOURNAL OF BUSINESS & MANAGEMENT, 2018
The reason for this research was to establish the determinants of internal control effectiveness and performance among small and medium enterprises in Lagos metropolis. Internal control was measured using the five elements of internal control as instituted by the committee of sponsoring organizations of Treadway commission framework of internal controls. These elements are control environment, risk assessment, information and communication, control activities and monitoring. 150 questionnaires designed in modified Likert of 5 scales were distributed, and 142 responded. The data was analyzed using the mean scores and standard deviation. The study findings revealed that SMEs in Lagos metropolis involve strong internal control. This study recommended that. SMEs owners should continue to maintain strong internal control system.
Asian Economic and Financial Review, 2020
This study examined the internal control systems and operating performance of SMEs in Ondo State. Specifically, the study analyzed the impact of internal control system components on the profitability of SMEs in Nigeria and a total of 120 SMEs were sampled for the study. Data used in the study were collected with a questionnaire. Collected and collated data were analyzed using logistic regression estimation. The result showed that the probability that an SMEs will have high level of operating performance in terms of higher actual annual profit increases insignificantly by 0.78% and 1.95% respectively, when there is a unit measure of improvement in the control environment and control activities and that the probability declines insignificantly by 0.051%, 0.33% and 4.53% respectively, with a unit measure of improvement in risk assessment, information and communication and monitoring activities. The study established that the components of internal control system has no significant impact on the operating performance of SMEs in Ondo State, though the control environment and control activities have a positive impact on the probability of an enterprise recording a high operating performance. Hence, SMEs should maintain and leverage the positive impact of the control environment and control activities to boost their operating performance, However, issues surrounding risk assessment, information and communication as well as monitoring activities should be addressed systematically based on the reality of the operational structure of each enterprise. Contribution/ Originality: This study contributes to the existing literature by finding that SMEs should commit more to integrity, ethical value, competence, accountability, as well as the development of preventive and detective control activities through the engagement of technology, and standardization of policies and procedures for transaction approval, verification and reconciliation.