In the past, internal control maps were limited and assigned to internal hearers and internal accounting directors. Today, the concerns of the construct have been generalised and more attending paid by senior direction to do certain that the appropriate internal control systems are put in topographic point and good monitored for the sustainability of the company operations.
Internal control mechanisms are indispensable in betterment of the administration ‘s public presentation and ease the quicker responses in clip of equal alteration when needed.Order now
Corporate concerns worldwide have witnessed multimillion dirts as a consequence of inefficiency in their several internal control systems.
Many writers and governments have defined the construct of internal control in different ways. One of the widely recognized significances of internal control is harmonizing to COSO “ Committee of patronizing administrations of trade manner committee ” , they province that Internal control is one of the chief tools used to control the hazards associated with unwanted concern Acts of the Apostless. They further assert that, internal control is loosely defined as a procedure effected by an entity ‘s board of managers, direction and forces designed to supply sensible confidence sing the accomplishment of the administration ‘s aims in regardful classs viz. ; Operational effectivity and efficiency, Financial describing dependability and conformity with applicable Torahs and ordinances.
( WWW.coso.org )
From the above definition, it is apparent that internal control involves a figure of cheques and controls exercised in an administration to guarantee watchfulness and way over of import affairs like budget and finance, purchase and gross revenues and internal disposal.
Internal control systems include all the steps adopted by an administration to carry through the undermentioned aims ;
To avoid waste, inefficiency and fraud and to maintain integral the company resources.
To achieve highest degree of truth and capacity in maintaining of the company accounts and operations informations.
To promote and mensurate the execution of the administration ‘s policy
To measure public presentation efficiency in all facets of the company activities and assistance in organizational direction planning
As the proposed research instance survey, EWSA is a company that is entrusted with the distribution of power, H2O and sanitation installations in Rwanda. As a national public-service corporation, EWSA has been in being since 1976 as ELECTROGAZ. The company was founded as REGISDESO in 1939 by the colonial Masterss to provide H2O, electricity and gas to Rwanda – Urundi of the so epoch with its central offices in Bujumbura. REGISDESO was subsequently in 1963 divided into Electrogaz for Rwanda and Regideso Burundi.
Electrogaz was granted the monopoly for the production and distribution of H2O and electricity in the state. After 1994 race murder, the state ‘s urban colony increased which led to an addition on the demand of H2O, electricity and sanitation severally. The installed H2O and electricity supply installations in topographic point by so could non prolong the demand and therefore a call for an hypertrophied investing in the substructures and other installations.
The company since so has gone through a figure of restructurings. In 1999, a jurisprudence was passed seting an terminal to electrogaz’z monopoly on electricity and H2O supply therefore opening doors for independent power manufacturers and providers to prosecute in the market in twelvemonth 2003. Electrogaz was so put under a direction contact for 5 twelvemonth with Lahmayer international for restructuring and pull offing its systems but the contract lasted for merely two old ages and reverted to the authorities of Rwanda due to Lahmayer ‘s failure to follow with the contract demands and outlooks. Subsequently the company ‘s board was assigned to name a new direction and reconstitute the company systems to run into market demand.
In 2010, electrogaz was sprit into RECO ( Rwanda Electricity Corporation ) and Rwasco ( Rwanda H2O and Sanitation Corporation ) , the sprit did non last for long every bit subsequently in the terminals of twelvemonth 2011 the company was once more merged and give the name EWSA ( Energy, H2O and sanitation authorization ) .
Electricity: The Company provides electricity by agencies of thermic and hydroelectric power.
Hydropower is fundamentally produced by agencies of H2O dikes turning turbines which in bend produce electricity and is the primary beginning for Rwanda electricity production.
Thermal power is produced by the agencies of fuel, heavy fuel and methane gas. The thermic power workss were installed as an option to the hydroelectric workss that were non bring forthing plenty in respect to the market demand
The state ‘s electrification rate is estimated at 16 % with 350,000 connexions countrywide.
EWSA provides H2O to Kigali metropolis and urban Centres of Rwanda. Natural springs and some other authorities undertakings supply the rural countries with the needed H2O. The H2O supplied by EWSA is treated harmonizing to the international criterions, in order to run into the criterions, specific H2O purification stairss are taken including ; physical and chemical interventions and laboratory analysis to guarantee quality.
( www.ewsa.rw )
STATEMENT OF THE PROBLEM
Internal control systems are tools designed to convey about efficiency in an administration. These systems involve both the employers and employs of the administration.
Harmonizing to EWSA history, in the last 17 old ages after the race murder of 1994 the company has changed direction several times due to inefficiency in operations and functionality of the assigned squads, the inefficiency being caused by failure to run into the demands of the company ‘s turning market. The research therefore will be looking at look intoing what internal control systems are in EWSA and how effectual can they be operated to run into the company aim
A figure of inquiries will be asked during the survey, but most significantly the undermentioned inquiries will be more considered for effectual recommendations from the survey ;
What are the internal control systems present in EWSA today?
How effectual are these systems?
What can be done to better on the effectivity of these systems?
OBJECTIVES OF THE STUDY
The general aim of the survey is to look into EWSA ‘s internal control systems and their several effectivity on the public presentation of the company
To look into the company ‘s internal control systems in usage
To analyze the effectivity of each control system
To look into the part of these internal control system to the effectivity of EWSA ‘s operations
To supply recommendations on what should be done to better on the efficiency of the company ‘s internal control system and public presentation
This will include methods, techniques and general attacks that will be used to obtain the necessary informations to accomplish the declared aim ;
This research will be both retrospective where literature reappraisal is concerned and redolent revision will be used to get cognition on the capable affair
METHODS OF DATA COLLECTION
Primary informations: This will affect the usage of good designed questionnaires which will be addressed to functionaries of EWSA and service utilizations to analyze how effectual is the company ‘s service proviso.
Secondary informations: This will affect the usage of information from EWSA web site ; diaries related to the topic, different studies from the authorities of Rwanda, universe bank and other international administrations that are someway related to the topic, books from different others on the topic and other cyberspace hunt engines.
Significance OF THE STUDY
The research will place EWSA ‘s internal system, it will further supply a clear position of the administrations operations and its position at market topographic point for a relevant determination devising
The research will analyze EWSA ‘s strength and failings and asses their causes
The research will so supply recommendation on how EWSA ‘s internal systems can be improved in order to accomplish the company ‘s aims and ends.
Scope OF THE STUDY
The survey will embrace all the thoughts refering internal control systems in relation to EWSA ‘s public presentation, It will be carried out in Rwanda energy, H2O and sanitation authorization located in the state ‘s capital Kigali for easy entree to information and likely effectual application of recommendations to control the jobs in the company ‘s operations. The research will be farther be carried out on web sites, books, diaries and studies for truth of information, the research will nevertheless be conducted harmonizing to clip and resources restraints
This will be presented in sub subjects of ; definitions of cardinal footings, agencies of accomplishing internal control, characteristics of good internal control
This chapter is presented in sub subjects of: Definition of cardinal footings, agencies of accomplishing internal control, Features of good internal control, Alternative methods of measuring internal control, the kernel of control and regulation, the kernel of doing things to go on in conformity with a peculiar program or nonsubjective.
Examples range from a kid ‘s control of a pull plaything to such comparatively complex affair as flying a jet airliner or commanding the operation of a atomic power bring forthing station.
In commanding an organisation, directors strive for the most effectual and efficient techniques to command the assorted activities for which they are responsible, so as to achieve such aims as net income maximization, cost minimisation, quality care, and production quotas.
Howard.F. Stettler ( 1982:134 )
He farther mentioned stairss in commanding organisational activities and these include:
Forming, planning, and doing the determinations implicit in the development of a program.
Authorizing action to implement programs that have been agreed upon.
Keeping detention and control over use of resources acquired in conformity with the program.
Planing and runing an information system to accurately enter, sum up, and study on all activities in order to supply necessary feedback on the consequences accomplished.
Taking such a disciplinary action may be prompted by feedback on past action and consequences.
- 1 DEFINITIONS OF KEY CONCEPTS
- 2 Control environment
- 3 Hazard appraisal
- 4 Control activities:
- 5 Information and communicating:
- 6 Monitoring:
- 7 Competent forces
- 8 Assignment of duty
- 9 Division of work
- 10 Adequate records and equipment
- 11 Rotation of forces
- 12 Internal Auditing
- 13 Protection of acquiescences
- 14 Separation of employee fonctions
- 15 Rotation of employees ‘ occupation assignments
- 16 OBJECTIVES OF INTERNAL CONTROL
- 17 Judgment errors:
- 18 Management override:
- 19 Cost versus Benefits:
- 20 THE NEED FOR INTERNAL CONTROL
- 21 Means OF ACHIEVING INTERNAL CONTROL
- 22 Beginnings of information for survey of internal control
- 23 DEFINITIONS AND UNDERSTANDING OF PERFORMANCE
- 24 BIBIOGRAPHY
DEFINITIONS OF KEY CONCEPTS
DEFINITIONS AND UNDERSTANDING OF INTERNAL CONTROL
Howard F. Stettler ( 1977:54 ) stated that “ Internal control comprises of the organisation program and all of the co-ordinate methods and steps adopted within a concern to safeguard its assets, look into the truth and dependability of its accounting informations, promote operational efficiency, and promote attachment to order managerial policies ” .
Harmonizing to this definition, internal control is the agencies by which direction obtains the information, protection, and control for successful operation of a concern endeavor.
Harmonizing to Thompson, Strickland and Hermanson et Al. ( 1987:269 ) they define the internal control system as the: “ program of Organization and all the processs and actions taken by an entity to:
Protect its assets against larceny and waste
Ensure conformity with company policies and federal jurisprudence
Measure the public presentation of all forces in the company so as to advance efficiency of operations.
Ensure accurate and dependable operating informations and accounting studies ” .
Therefore forestalling larceny and waste is merely a portion of internal control.
In general footings, the intent of internal control is to guarantee efficient operations of a concern therefore doing it possible for the concern to efficaciously make its ends.
Internal control is defined as a procedure, affected by an entity ‘s board of directors/trustees, direction and other forces, designed to supply sensible confidence sing the accomplishment of organizational aims in the undermentioned classs:
Effectiveness and efficiency of operations
Dependability of fiscal coverage
Conformity with Torahs and ordinances
This definition reflects certain cardinal constructs:
Internal control can be expected to supply merely sensible confidence, non absolute confidence, to an entity ‘s direction and board.
Internal control is geared to the accomplishment of aims in one or more separate but overlapping classs.
Internal control comprises five interconnected constituents viz. ; command environment, hazard appraisal, control activities, information and communicating and monitoring.
These five constituents are explained below
The nucleus of any concern is its people and their single properties, including unity, ethical, values and competency in which they operate. They are the engine that drives the entity and the foundation on which everything remainders.
The entity must be cognizant of and cover with the hazards it faces. It must put aims, integrated with grosss, production, selling, fiscal and other activities so that the organisation is runing in concert. It besides must set up mechanism to place, analyze and pull off the related hazards.
Control policies and processs must be established and executed to assist guarantee that the actions identified by direction as necessary to turn to hazards to accomplishments of the entity ‘s aims are efficaciously carried out. Policies and processs should be reviewed on a periodic footing.
Information and communicating:
Surrounding these activities are information and communicating systems. These enable the entity ‘s people to capture and interchange the information needed to carry on, manage and command its operations.
The full procedure must be monitored, and alterations made as necessary. In this manner, the system can respond dynamically, altering as conditions warrant
( www.tufts.edu accessed on 22/September 2010 ) .
INTERNAL CONTROL STRUCTURE
Harmonizing to Hanson, Hamre and Walgenbach ( 1993:254 ) , a house ‘s internal control construction is defined as the policies and processs established to supply sensible confidence that the specific entity aims will be achieved.
The control processs of peculiar concern to the comptroller are those that help to:
Produce accurate and dependable fiscal informations about the house and
Safeguard the house ‘s assets.
We use the term accounting controls to mention to the policies and processs designed to advance accomplishment of these two aims.
FEATURES OF AN ACCOUNTING CONTROL SYSTEM
Harmonizing to Hanson Hamre, and Walgenbach ( 1993:254 ) , good internal accounting control includes the undermentioned demands:
Assignment of duty
Division of work
Adequate records and equipment
Notation of forces
These demands are explained below ;
Accounting controls may interrelate with controls in other countries. For illustration, engaging processs used to place competent accounting forces may besides be used to engage capable employees for other countries in the house.
Employees should be carefully selected and their endowments used intelligently in the operation of the accounting information system.
Each individual should thoroughly understand his or her map and its relationship to other map in the system. Above all, an employee must recognize the importance of following the processs prescribed by direction and should be in support with the system. A well-formulated system of internal control can be destroyed by employees ‘ deficiency of assurance or cooperation.
Assignment of duty
The program of the organisation should repair duty for maps and confer the authorization necessary to execute them.
Responsibility and authorization for a given map should non be shared, because this may ensue in duplicate of attempt and in occupations traveling undone if persons think that another is executing the assignment. When one individual is responsible for remaining within budgeting sums for labor costs, he or she should be given the authorization to delegate forces to occupations, control overtime, and so on
Division of work
Division of work is one of the most of import of the facts of a good system of controls.
The responsibilities of persons should be defined so that no individual person has complete control over a sequence of related minutess.
For illustration, the individual managing bank sedimentations and the individual maintaining the cashbooks should non have bank statements or do bank rapprochement.
Improper division of work, or segregation of responsibilities, increases the possibility of fraud, sloppiness, and undependable record maintaining.
With a proper division of responsibilities, the work of one individual or group can move as a cheque on work performed by another individual or group.
For illustration, when different persons process purchase orders and receiving studies, a 3rd individual can compare the order, having study and seller ‘s bill before O.K.ing payment. This pattern reduces the likeliness of mistakes from sloppiness every bit good as the possibility of fabricated purchases or deceitful transition of goods.
Work division is valuable non merely in forestalling mistakes and expansive, but besides in supplying the advantages of specialization-better public presentation and easier employee preparation.
Adequate records and equipment
Harmonizing to Hanson Hamre and Walgenbach ( 1993:256 ) , equal records are of import non merely in accounting for a company ‘s resources but besides in supplying direction with accurate and dependable information.
One of the most of import characteristics in a satisfactory records-keeping system is a comprehensive chart of histories that classifies information in a mode best suited to direction ‘s demands.
Control histories and subordinate records should be used when appropriate, so that work can be subdivided, and cross-checks may be made when the two types of histories are reconciled. Control and subordinate histories can be used for such countries as histories and notes payables, works assets, and the major disbursal categorizations of selling disbursal and administrative disbursal.
The signifiers used with the accounting records should advance truth and efficiency. If possible, single signifiers should be pre-numbered so that the sequence of signifiers used can be accounted for. Furthermore, pre-numbering helps a steadfast hint its minutess and cut down the possibility of neglecting to enter a dealing.
For illustration, say a steadfast issue pre-numbered gross revenues faux pass for each sale. A cheque of the figure sequence would unwrap any recreation of gross revenues returns accomplished by devastation of the gross revenues faux pas.
Similarly, accounting for the sequence of pre-numbered cheques can observe whether live cheques have been issued for unauthorised purchases.
Rotation of forces
Harmonizing to Hanson, Hamre and Walgenbach ( 1993:257 ) , some companies rotate the places of certain operating forces.
For illustration, accounts a receivable clerk each responsible for a certain alphabetical sections. This process may unwrap mistakes and abnormalities caused by sloppiness and dishonesty on the portion of employees.
Embezzlement of financess particularly in fiscal establishments such as Bankss has frequently been discovered during an employee ‘s absence, when the culprit could no longer command or pull strings records.
Harmonizing to Hanson, Hamre and Walgenbach ( 1993:257 ) , an of import characteristic of the internal control construction of big companies is the internal audit map.
The internal auditing section independently appraises the house ‘s fiscal and operational activities. In add-on to reexamining activities for mistakes and abnormalities, the internal audit staffs determines whether prescribed policies and processs are being followed and efforts to bring out uneconomical and inefficient state of affairss.
Internal auditing is a staff, or advisory, a map that consists of reexamining activities and doing written recommendations to direction. To be effectual, the internal audit staff must be independent of operating ( line ) maps and should describe to a high-level executive or to the house ‘s board of managers.
CHANGING CONCEPTS OF INTERNAL CONTROL
Harmonizing to Walter B. Meigs ( 1969:95 ) , internal control is far more comprehensive in range than the “ internal cheque ” of a coevals ago.
The most common use of the term “ internal cheque ” Was to depict the patterns followed within the accounting and finance divisions of a concern for the double intents of minimising clerical mistakes and protecting assets, peculiarly hard currency, from loss or larceny.
Although the protection of hard currency is unimpeachably an of import map of the system of internal control, this is merely one of several of import aims.
Internal control extends beyond accounting and fiscal maps, its range is companywide and embracings such as auditing, statistical analyses, quality control and production programming. We may state that internal control in present twenty-four hours usage embraces all sections and affects all activities of concern concern.
It includes the methods by which top direction delegates ‘ authorization and assigns duty for such maps as merchandising, buying, accounting, and production.
PURPOSE OF INTERNAL CONTROL
Harmonizing to Thompson, Strickland and Hermanson ( 1987:269 ) , the basic intent of internal control is to advance the efficient operation of an organisation. The system of internal control consists of all steps employed by an organisation to ;
Safeguard assets from wastes, fraud, and inefficient usage
Promote truth and dependability in the accounting records
Encourage and step conformity with company policies and
Measure the efficiency of operations.
Protection of acquiescences
This can be done by ;
Separation of employee map and
Rotation of employee occupation assignments
Separation of employee fonctions
If a work is assigned to a specific individual, that individual is accountable for that undertaking, as such he/she can be rapidly identified. It is easy to follow lost paperss or find how a peculiar dealing is recorded when employees are given specific responsibilities. Division of duties gives sense of pride and importance hence the individual ‘s responsible privation to execute to the best of their ability.
Rotation of employees ‘ occupation assignments
If occupations are being rotated among employees it discourages employees from long-run strategies to steal. Employees realize that if they steal from the company, the following employee assigned place may detect the larceny. If employees are given one-year holiday, many dishonest strategies prostration when the employee does non go to to the occupation on a day-to-day footing.
Evaluation OF PERSONNEL PERFORMANCE
To measure how good company employees are making their occupations, many companies use internal auditing.
Internal Auditing consists of look intoing and measuring employee ‘s conformity with the company ‘s policies and processs.
For this intent companies hire internal hearers who are trained in internal scrutinizing company policies and their responsibilities. Role of internal hearers: they should promote operating efficiency throughout the company and can be invariably watchful for dislocations in the company ‘s system of internal control. They make recommendations for the betterment of company ‘s internal control system whenever necessary.
OBJECTIVES OF INTERNAL CONTROL
The chief aims of internal control are:
To guarantee all minutess are authorized such as aggregation and direction of hard currency is accomplished merely when decently authorized and controlled. For illustration all user fees in a golf nine should be tracked and accounted for on numbered grosss.
To guarantee all certification and answerability for assets are in conformance with local and national Torahs ; and procedural demands. For illustration the usage of merely authorized signifiers and completed in conformity with known Torahs and ordinances.
Ensure truth and efficiency of organisation ‘s employees public presentation in its operations
LIMITATION OF INTERNAL CONTROL
A cardinal construct underlying the definition of internal control is that an internal control construction provides merely sensible confidence that bureau aims will be achieved. Restrictions are built-in in all internal control systems.
These consequence from hapless judgement in decision-making, direction ‘s ability to overrule controls and consideration of costs and benefits relative to internal control.
No affair how good internal control operates, some events and conditions are beyond direction ‘s control.
The internal control restrictions above are explained as follows ;
Effective internal control may be limited by the worlds of human judgement. Decisions are frequently made within a limited clip frame, without the benefit of complete information, and under clip force per unit areas of carry oning bureau concern.
These judgement determinations may impact accomplishment of aims, with or without good internal control. Internal control may go uneffective when direction fails to minimise the happening of mistakes ( e.g. , misconstruing instructions, sloppiness, distractions, sloppiness, distraction, weariness, or errors ) .
Management may overrule or ignore prescribed policies, processs, and controls for improper ( e.g. , to heighten presentation of their bureau ‘s fiscal or conformity position ) .
Override patterns include deceits to province functionaries, staff from the cardinal bureaus, hearers, or others. Management override must non be confused with direction intercession ( i.e. , the going from prescribed policies and processs for legitimate intents ) . Intervention may be required in order to treat non-standard minutess that otherwise would be handled unsuitably by the internal control system.
A proviso for intercession is needed in all internal control systems since no system anticipates every status.
Cost versus Benefits:
The cost of internal control must non transcend benefits to be derived. Potential loss, associated with exposure, should be weighed against the cost to command it. Although the cost-benefit relationship is a primary standard to be considered in planing internal control, the precise measuring of costs is by and large non possible.
The challenge is to happen a balance between inordinate control ( Which is dearly-won and counterproductive ) and excessively small control. ( hypertext transfer protocol: //www.intosai.org September, 2010 )
THE NEED FOR INTERNAL CONTROL
Harmonizing to Meigs Walter B.Larsen E. John ( 1985:174 ) , the long-term tendency for corporations to germinate into organisations of mammoth size and range, including a great assortment of specialised proficient operations and employees numbered in 10s of 1000s, has made it impossible for corporate executives to exert personal, firsthand supervising of operations.
No longer able to trust upon personal, observation as a agency of measuring runing consequences and fiscal place, the corporate executive has, of necessity, come to depend upon a watercourse of accounting and statistical studies.
These studies summarize current occurrences and conditions throughout the endeavor ; the units of measurings employed are non merely pecuniary units but besides labour hours, material weights, client calls, employee expirations, and a host of other denominators.
The information carried by this watercourse of studies enables direction to command and direct the endeavor.
It keeps direction informed as to whether company policy is being carried out, whether fiscal place is in sound and operations profitable and interdepartmental dealingss harmonious.
Decisions made by direction become company policy. To be effectual, this policy must be communicated throughout the company and systematically followed. Internal control AIDSs in procuring conformity with company policy. Management besides has the direct duty of keeping accounting records and bring forthing fiscal statements that are equal and dependable. Internal control provides confidence that this duty is being met.
Means OF ACHIEVING INTERNAL CONTROL
Harmonizing to Meigs Walter B.Larsen E. John ( 1985:176 ) , Systems of internal control vary significantly from one organisation to the following.
The specific control characteristics in any system depend upon such factors as the size, organisational construction, nature of operations, and aims of the organisation for which the system was designed. Yet certain factors are indispensable to satisfactory internal control in about any large-scale organisation, well-trained forces.
Plan of administration
An organisation program refers to the division of authorization, duties, and responsibilities among members of an organisation.
A well-designed organisation program is a first measure to guarantee that minutess are executed in conformance with a company policy to heighten the efficiency of operation, to safeguard assets, and to advance the dependability of accounting informations.
These aims may accomplish in big portion through equal separation of duties for Initiation or blessing of minutess, Custody plus and Record maintaining
Internal control over minutess
Harmonizing to Meigs Walter B. Larsen E. John ( 1985:176 ) , a cardinal construct of accounting control is that no one Person or section should manage all facets of a dealing from get downing to stop.
If the direction is to direct the activities of a concern harmonizing to program, every dealing should affect five stairss ; It should be authorized, initiated, approved, executed, and recorded. Accounting control will be enhanced if each of these stairss is performed by comparatively independent employees or sections.
No simple employee will so hold incompatible responsibilities that allow the employee to both perpetrate and conceal mistakes or abnormalities in the normal class of a twenty-four hours ‘s work.
Efficience of Operationss
Harmonizing to V.K Batra, KC Bagardia and Whittington ( 1985:178 ) , a well-designed organisation program should heighten the efficiency of operations every bit good as contribute to internal accounting control. When two or more sections take part in every dealing, the work of one section is reviewed by another.
Besides, each section has an inducement to demand efficient public presentation from the others.
Mistakes made by the receiving section in numbering goods received will usually be brought to visible radiation by the accounting section when it compares the having study with the seller ‘s bill and the purchase order. If faulty stuffs are accepted by the receiving section, duty will be placed on the negligent section by forces of the shops maintaining or production sections, which must use the stuff in inquiry.
Duties of finance and accounting sections
Harmonizing to Meigs Walter B. Larsen E. John ( 1985:180 ) , finance and accounting are the two sections most straight involved in the fiscal personal businesss of a concern endeavor.
The division of duties between these sections illustrates the separation of the accounting map from operations and besides from the detention of assets. Under the way of the financial officer, the finance section is responsible for fiscal operations and detention of liquid Assets.
Activities of this section include be aftering future hard currency demands, set uping client recognition policies, and set uping to run into the short and long-run funding demands of the concern.
Beginnings of information for survey of internal control
Harmonizing to Meigs Walter B. Larsen E. John ( 1964:114 ) , the appropriate beginnings of information in analyzing the system of internal control include the followers:
Methods end processs manuals depicting the sanctioned patterns to be followed in all stages of operations.
Job descriptions, detailing the range of activities and duties for specific occupational categorizations, such as charge clerk, teller and so on.
Discussions with operating forces. The hearer must, of class, maintain an attitude of professional self-respect and unity. He should non promote employees to knock supervisors, but may decently obtain valuable factual information refering work being performed runing forces of all categorizations.
Reports, working documents, and scrutinizing plans of the internal auditing staff. A critical reappraisal of the work done by built-in hearers is a major measure in the survey of internal control by the independent hearer.
Personnel scrutiny of accounting records, signifiers, paperss, mechanical equipment, and all other media for entering minutess and treating operating and fiscal informations.
Works documents, recommendation letters, and audits studies from scrutiny to that of completion.
When the hearer is engaged, he of class utilizes all information refering internal control contained in the emphasis the countries shown as holding questionable controls in anterior old ages.
It is imperative, nevertheless, that the hearer recognizes that the form of operations is an ever-changing one, that internal controls which were equal last twelvemonth may now be disused, and that the established usage of a given control process is no confidence that it is presently being applied in an effectual and intelligent mode.
DEFINITIONS AND UNDERSTANDING OF PERFORMANCE
Tips M.F ( 1991:1640 ) defines public presentation as the extent to which an person can successfully carry through a undertaking or accomplish a end.
Performance as a construct includes non merely the production of certain touchable units of end product, but besides of less touchable end products, such as efficaciously oversing others, believing in a originative manner, contriving a new merchandise, deciding a struggle between others or selling a good or a service.
This definition provides a clear apprehension of what public presentation is, however, the thought of “ ability ” is non considered mentioned and yet, it should be good emphasized.
Therefore, a comprehensive definition of public presentation should see “ public presentation as the extent to which an person in his/her ability and within or outside the bounds of a place can successfully carry through a undertaking or accomplish a end ” .
Tosi L.H. Rizzo, R.J and Carrol ( 1993:305 ) , State that the public presentation is the consequence of the application of mental or physical attempt. Performance degrees can be stated in different ways in footings of measure or quality and may reflect some subjective judgement by a director ; a peculiar degree of public presentation may be judged as “ high ” for one individual, but the same degree may merely “ satisfactory ” or possibly “ unsatisfactory ” for another.
To Benton and Halloran ( 1991:68 ) , public presentation is the terminal consequence of motive, that public presentation is a map of ability and motive.
It is necessary to hold both the ability and motive to execute. If either ability or motive is low, public presentation will besides be low and the modesty is true.
Establishing public presentation criterions
Harmonizing to Mosley, Pietrin and Meiggison ( 1996:497 ) , a criterion is a unit of measuring that can function as a mention point for measuring consequences. Standards are of import for directors ‘ demands to put clear aims that channel their full organisation ‘s attempts.
Consequently, ends, aims, quotas, and public presentation criterions can be expressed in physical, pecuniary or clip dimensions.
Quantifiable criterions are criterions that can be expressed in footings of Numberss ( units, dollars, and hours ) . These quantifiable criterions include:
Physical criterions. These include ; measures of merchandises, figure of clients or clients, or measure up of merchandises or services.
Monetary criterions. These are expressed in dollars and include ; labour costs, selling costs, materials-costs, gross revenues grosss, gross net incomes.
Time criterions. These include the velocity with which occupations should be done or the deadlines by which they are to be completed.
Non quantifiable or qualitative criterions
These, like quantitative criterions play an of import function. Some times subsidiaries and directors are non every bit much aware of the non-quantifiable criterions, but these are still really of import. Such criterions include ; populating “ qualified ” forces, advancing the “ most proficient ” individual, holding a concerted attitude, and have oning appropriate frock on occupation, can be
Measuring public presentation
Harmonizing to Mosley, Pietri, and Megginson ( 1996:488-499 ) , puting criterions is ineffectual unless there is some manner to mensurate existent public presentation while criterions set up what will be measured and what degree of public presentation is satisfactory, other of import inquiries must besides be answered. For illustration, how frequently is public presentation is measured, hourly, daily, hebdomadally, yearly? What signifier will the measurement take a phone call, a ocular review, a written study? Who will be involved in, an operating employee, a supervisor, a middle-level director, or the company? Other considerations in mensurating public presentation are guaranting that the measuring is easy to make, comparatively expensive, an easy to employees and others.
Among the many ways of mensurating public presentation are ;
Reports both unwritten and written ;
The usage of automatic devices, and
Inspections, trials or samples.
BAILEY Kenneth D. ( 1982 ) , methods of societal research, 2nd Ed. , New York coal miner Macmillan publishing houses: London.
BATEMAN, S.T and ZEITHANI, P.C ( 1990 ) , Management: Function and scheme, Richard D.Irwin Inc. , New York.
CHURCHILL Gilbert A. Jr ( 1992 ) , Basic selling Research, 2nd Ed. , the Dryden imperativeness.
HOWARD F. Settler ( 1982 ) , Auditing rules: A system based Approach, 5th Ed. , prentice- Hall, Inc. , Englewood drops, New York.
HONSON, HAMRE, WALGENBACH ( 1993 ) , Fiscal accounting: An debut, 7th Ed. , The Dryden imperativeness Harcourt Brace and company.
GRINNELL Richard M.Jr and Williams Margaret ( 1990 ) , Research in societal work, F.E. Peacork Publishers incaˆ¦ , USA.
MEIGS Walter B, LARSEN E. John ( 1969 ) , rules of Auditing: 4th Ed. , Richard D. Irwin Inc. , Homewood, Illinois.
MOSER C.A. and KARTON G. ( 1971 ) , Survey methods in societal probe, Heineman instruction books, London
MOSLEY, PIETRIN and MEIGGISON ( 1996 ) , Management, Leadership in action 5th Ed, Harper Collins Colledge Publisher
STONER F. A. J.and FREEMAN E.R ( 1992 ) , Management, 5th Ed.. , prentice-Hall, Inc. , New Jersey
TAYLOR Donald H.. , GLEZEN G. William ( 1991 ) , Auditing: Integrated constructs and processs, 5th Ed.. , John wiley and boies, Inc. , New York.
TAYLOR Donald H.. , GLEZEN G. William ( 1991 ) , Auditing: Integrated constructs and processs, 5th Ed.. , John wiley and boies, Inc. , New York.
TOSI, L.H.. , RIZZO, R.J and CARROL, J.S ( 1993 ) , pull offing organisational behaviour. 2nd Ed. Harper and Row publishing houses, New York
THOMPSON, STRICKLAND and HERMANSON ( 1987 ) , Strategic direction constructs and instances 4th Ed. Business publication, inc.. , Plano. Texas
VIVIAN R.V.Cooper ( 1975 ) , Student ‘s manual of Auditing, 4th Ed.. , Gee and company publishing houses limited, London and st Albans.
V.K BATRA, WHITTINGTON, KC BAGARDIA ( 1996 ) , Auditing, 2nd Ed.. , Tata mc Graw Hill
WAGNER 111 John A and HOLLENBECK John R. ( 1992 ) , Management of organisational behaviour, learner – Hallway, Inc.. , New York.
Waterss Donald ( 1998 ) , Essential Qualitative methods: A Guide for concern, Addison Wesley Longman Inc.. , New York.
WOOLF Emile ( 1979 ) , Auditing today, 6th Ed.. , learner -Hall international, inc. , London.