ATTENTION:
BEFORE YOU READ THE CHAPTER ONE OF THE PROJECT TOPIC BELOW,
PLEASE READ THE INFORMATION BELOW.THANK YOU!
INFORMATION:
YOU CAN GET THE COMPLETE PROJECT OF THE TOPIC BELOW. THE FULL
PROJECT COSTS N5,000 ONLY. THE FULL INFORMATION ON HOW TO PAY AND GET THE
COMPLETE PROJECT IS AT THE BOTTOM OF THIS PAGE. OR YOU CAN CALL: 08068231953,
08168759420
EFFECT OF INTERNAL CONTROL SYSTEM ON
RISK MANAGEMENT
ABSTRACT
This study
examine the effects of internal control system on risk management. The
researcher consider employee of Nigerian television authority, Lagos centre as
the population of the study. The study employed survey and descriptive research
design. 100 questionnaire were randomly administered to the staff of NTA, Lagos
center out of which 97 were completed and return. The data retrieved were
analyzed with aid of SPSS version 23. Descriptive statistics of simple
percentage and mean were used to provide answers to the research questions and
the inferential statistics of regression were used to test the effect of
internal control system on risk management. Among the findings reveals by the
study include; Management risk awareness has positive significant effect on
internal control system of NTA Lagos center. And it was recommended that
management of NTA, Lagos center should consider general risk-mitigation
approaches to the circumstances of their organizations through constant
monitoring of control environments and tailoring internal risk control systems.
It was concluded that components of internal risk control can be designed to
mitigate risks and may ensure the reliability of performance reports and
compliance with laws, policies and regulations. Risk management activities
protect the organization, its people, assets, and profits, against the physical
and adverse consequences, by planning, coordinating and directing the internal
risk control activities.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Business
organizations across the world are confronted with risks. Some of these risks,
both internal and external, involve huge losses that could deprive an
organization from its continuity if the proper management is not put in place.
These days, managing risk has become a matter of necessity. Hence, this
research will examine the relationship between internal control system and risk
management. Risk has been defined as uncertain future events that could
influence the achievement of the organization’s strategic, operational and
financial objectives (International Federation of Accountants IFA, 1999). Risk
can be defined as the combination of the probability of an even and its
consequences (The Institute of Risk Management IRM, 2002).
The
intention of every profit-making organization is to earn profit, stay in
business for a long time, meet customers’ demand and expectations, pay their
debts when they fall due and satisfy the aims of stakeholders. These objectives
are easily achieved if the owner and manager of the company is the same person.
However, as the business grows and expands, the need for additional employees
arises and the owner employs more and more people to help manage the company.
This gradually results in what is called separation of ownership and control
(Smith, 1776). At this point, the owner realizes that precautions must be taken
to protect the company as well as the interest of the owner. The issue of
ownership and control becomes more complicated if a company is big and listed
on a recognized stock exchange. That is, a company with much more capital
investment both in cash, assets and personnel. Thus, the owners need an
assurance that the intended objectives of the company would be achieved, assets
of the company would be protected from theft and mismanagement, the accounting
information would be received on time and that they would be accurate and
reliable.
The
weaknesses of many companies internal control systems have been highlighted due
to the big financial scandals of recent years and as a result increased
attention on risk management, internal controls, internal audit and their role
in modern organizations. Following these high profile corporate fraud and
accounting scandals, greater demands have been created on companies to account
for in their corporate governance statements, what risk factors they are
exposed to and the internal control systems put in place to alleviate them.
Risk
management is a process of understanding and managing the risks that the entity
is inevitably subject to in attempting to achieve its corporate objectives. For
management purposes, risks are usually divided into categories such as
operational, financial, legal compliance, information and personnel. One
example of an integrated solution to risk management is enterprise risk
management (Chartered Institute of Management Accountants CIMA, 2005).
Effective risk management involves risk assessment, risk evaluation, risk
treatment and risk reporting. The focus of good risk management is the
identification and treatment of these risks in accordance with the
organization’s risk appetite. These risks need to be managed and controlled in
order to prevent vibrant organizations from catastrophic losses and help them
achieve their goals and objectives. An organization needs to understand its
mission and articulate it clearly. This makes it easier to recognize the risks
associated with the mission. Once an organization identifies its mission, it
can begin its risk assessment by listing the possible risks that threaten the
business with the aim of identifying high priority risks and focusing on those
first.
Internal
control system on the other hand, is the whole system of controls, financial
and otherwise, established in order to provide reasonable assurance of
effective and efficient operation, internal financial control and compliance
with laws and regulations (CIMA, 2006). The formality, structure and nature of
a company’s system of internal control will generally vary with the type of sector
or industry, size of the company and the level of public interest in it. Since
profits are in essence the reward for successful risk-taking, the purpose of an
internal control system is to help manage and control risk appropriately rather
than to eliminate it as indicated in the Turnbull Report (Institute of
Chartered Accountants in England &Wales ICAEW, 1999). Thus, control
mechanisms should be incorporated into the business plan and embedded in the
day-to-day activities of the company.
1.2 STATEMENT OF THE PROBLEMS
Risk is
inherent in every economic activity and every organization has to manage it
according to its size and nature of operation because without risk management
no organization can survive in the long run. This is because businesses today
are faced with far greater challenges than before due to the fact that
economical, technological and legal interdependence are becoming more prevalent
and pronounced. It would be assumed that risk management and internal control
systems will vary from organization to organization based on their size or
industry sector. It is therefore logical to assume that every business
organization has put in place a strong risk management structure and internal
control systems to help achieve its goals. These are fundamental to the
successful operation and day-to-day running of a business and assist a company
in achieving its objectives.
Risk may
affect many areas of activity, such as strategy, operation, finance, technology
and environment. In terms of specifics, it may include, for example, loss of
key staff, substantial reductions in financial and other resources, severe
disruptions to the flow of information and communication, fires or other
physical disasters, leading to interruptions of business and or loss of
records. More generally, risk also encompasses issues such as fraud, waste,
abuse and mismanagement. It is based on the foregoing that the current
researcher is examining the relationship between internal control system and
risk management in a selected organization.
1.3 OBJECTIVES OF THE STUDY
The
following are the objectives of this study:
To examine the internal control system put
in place in an organization.
To identify the risks and risk management
strategy of an organization.
To examine the relationship between
internal control system and risk management in an organization.
1.4 RESEARCH QUESTIONS
What is the internal control system put in
place in an organization?
What are the risks and risk management
strategy of an organization?
What is the relationship between internal
control system and risk management in an organization?
1.5 RESEARCH HYPOTHESIS
HO: There is
no significant relationship between internal control system and risk management
in an organization
1.6 SIGNIFICANCE OF THE STUDY
The
following are the significance of this study:
The findings from this study will
enlightens business managements, shareholders, corporate managers and the
general public on different types of risks that organizations are exposed to
and the various strategies/internal control system that can be used for risk
management/mitigation.
This research will be a contribution to the
body of literature in the area of internal control system and risk management,
thereby constituting the empirical literature for future research in the
subject area.
1.7 SCOPE OF THE STUDY
This study
is limited to the Nigeria Television Authority (NTA), Lagos center. It will
also cover their internal control systems, risks that they are exposed to and
the risk management strategies in place within the organization.
1.8 LIMITATION OF THE STUDY
Financial
constraint- Insufficient fund tends to impede the efficiency of the researcher
in sourcing for the relevant materials, literature or information and in the
process of data collection (internet, questionnaire and interview).
Time
constraint- The researcher will simultaneously engage in this study with other
academic work. This consequently will cut down on the time devoted for the
research work
1.9 OPERATIONALIZATION OF VARIABLES
Dependent
variable: Internal control system
Independent
variable: Risk management
Dependent
variable: Internal control system which is measured by management attitude,
management awareness, management actions
Independent
variable: Risk management which is captured by policies, regulations,
environmental factors
Y* ₌ f(Y1,
Y2, Y3)
Y* ₌
Internal control system
Where:
Y1 ₌
management attitude
Y2 ₌
management awareness
Y3 ₌
management actions
X ₌ Risk
management
X ₌ f(X1,
X2, X3)
Where:
X1 ₌
policies
X2 ₌
regulations
X3 ₌
environmental factors
It can also
be stated that the internal control system is a function of risk management.
Y* ₌ f (X1,
X2, X3)
Converting
this functional relationship into a regression model, it becomes:
Y* ₌ α0 ₊
α1X1 ₊ α2X2 ₊ α3X3 ₊ μ
Α0 ₌
constant term of the regression model
Α1-2 ₌
coefficients of parameter estimates of risk management
μ ₌
Stochastic variable
1.11 DEFINITION OF TERMS
Risk: a
situation involving exposure to danger.
Fraud:
wrongful or criminal deception intended to result in financial or personal
gain.
Hazards: a
danger or risk.
HOW TO GET THE FULL PROJECT WORK
PLEASE, print the following instructions and information if you
will like to order/buy our complete written material(s).
HOW TO RECEIVE PROJECT MATERIAL(S)
After paying the appropriate amount (#5,000) into our bank Account
below, send the following information to
08068231953 or 08168759420
(1) Your project topics
(2) Email Address
(3) Payment Name
(4) Teller Number
We will send your material(s) after we receive bank alert
BANK ACCOUNTS
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 0046579864
Bank: GTBank.
OR
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 2023350498
Bank: UBA.
FOR MORE INFORMATION, CALL:
08068231953 or 08168759420
AFFILIATE LINKS:
www.myeasyproject.com.ng
www.easyprojectmaterials.com
www.easyprojectmaterials.net.ng
www.easyprojectsmaterials.net.ng
www.easyprojectsmaterial.net.ng
www.easyprojectmaterial.net.ng
www.projectmaterials.com.ng
www.googleprojectsng.blogspot.com
www.myprojectsng.blogspot.com.ng
www.projectmaterialsng.blogspot.com.ng
Comments
Post a Comment