TABLE OF CONTENTS
DECLARATION ................................................................................................................ ii
APPROVAL. ...................................................................................................................... iii
DEDICATION: ............................................................................................................. ~ .... iv
ACKNOWLEDGEMENT .................................................................................................. v
TABLE OF CONTENTS ................................................................................................... vi
ABSTRACT ....................................................................................................................... ix
CHAPTER ONE ................................................................................................................. 1
1.0 INTRODUCTION .................................................................................................. 1
1.1 Background to the case study .................................................................................. 2
1.2 Statement of the problem ........................................................................................ 4
1.3 Research objectives ................................................................................................. 5
1.4 The purpose of the study ......................................................................................... 5
1.5 Research questions .................................................................................................. 5
1.6 Research hypothesis ................................................................................................ 6
1. 7 Scope of the study ................................................................................................... 6
1.8 Significance of the study ......................................................................................... 6
CHAPTER TWO ................................................................................................................ 8
LITERATURE REVIEW ................................................................................................... 8
2.0 Introduction ............................................................................................................. 8
2.1 Types of internal control ....................................................................................... 16
2.2 Internal check ........................................................................................................ 21
2.3 Internal audit ......................................................................................................... 21
2.4 Evaluation of internal controls .............................................................................. 22
2.5 Tools for evaluation of strengths and weaknesses of internal control system ...... 23
2.6 Internal control and technology ............................................................................ 25
2.7 Internal controls and business performance .......................................................... 26
2.8 Detection of errors and frauds ............................................................................... 27
CHAPTER THREE ........................................................................................................... 28
RESEARCH METHODOLOGY ...................................................................................... 28
3.1 Introduction ........................................................................................................... 28
3.2 Design and locale of the study .............................................................................. 28
3 .3 The study population ............................................................................................. 28
3.4 Sampling design .................................................................................................... 29
3.5 Types of data ......................................................................................................... 29
3.6 Data collection Techniques ................................................................................... 29
3.7 Analysis of data ..................................................................................................... 30
3.8 Limitations of the study ........................................................................................ 31
CHAPTER FOUR ............................................................................................................. 32
FINDINGS AND ANALYSIS .......................................................................................... 32
4.0 Introduction ........................................................................................................... 32
4.1 Cash control .......................................................................................................... 32
4.2 Debtors control ........................................................ : ............................................. 34
4.3 Internal control on wages and salaries .......................... ~ ....................................... 35
4.4 General overview .................................................................................................. 37
4.5 Internal audit control ............................................................................................. 37
CHAPTER FIVE ............................................................................................................... 38
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS ............. 38
5.0 Summary offmdings ............................................................................................. 38
5.2 Conclusion ............................................................................................................ 40
5.3 Suggestions and Recommendations ...................................................................... 42
REFERENCES .................................................................................................................. 46
APPENDICES .................................................................................................................. 47
Appendix !. ........................................................................................................................ 4 7
Appendix II ....................................................................................................................... 50
Appendix III ...................................................................................................................... 53
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Appendix N ....................................................................................... 54
Appendix V ......................................................................................... 55
Appendix VI. ....................................................................................... 56
Appendix VII ............................................................................ ~·-·········57
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ABSTRACT
The study was aimed on the internal control and the organization's effectiveness in the
accounts. A sound internal control system is important as it enables it to carry on the
business of the enterprise in an orderly manner, safeguards the organization's assets and
ensures completeness and accuracy in their records to achieve high pe1formance.
The study aimed at documenting and evaluating the adequacy of internal control and its
performance of Kenya commercial Bank by comparing them with a sound theoretical
framework and thereafter offe1ing recommendation for its improvement. Both primary
and secondary techniques of data collation were used.
During analysis of data, quantitative, qualitative and descriptive techniques such as
graphs, pie charts were used. Controls in the areas of cash, wages and salaries, debtors
were exanlined. The data was eventually analyzed by comparing with an ideal system
which exhibited that some controls were weak and other strong.
For effective and sound internal control system which will ensure an organizational good
perfonnance, the research recommended that the company should review its existing
control measures and come up with a workable plan to reinforce them.
According to my findings it shows that internal control systems play an important role in
the banks performance though. According to the researcher there is a probability of cash
controls been weak while there is a reasonable strong measures being taken to control
wages and salaries as well as debtors. However more needs to be done to reduce the risk
of fraud and any malpractices which can lead to losses. Hence an internal control plays a
major role in measuring and evaluating banks performance.
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