An assessment of the effectiveness of internal control practices: A case study of the Roads Contractor Company (RCC)

The purpose of this study is to assess whether the Roads Contractor Company Ltd’s internal controls are adequate in processing procurement requirements and to establish the extent to which internal control systems over the procurement cycle affects its operations and financial performance. The study could have covered widely but due to some constraints, it only used on the internal control system and the other constraints included time and the extent to which the selected employees were willing to respond to the questions posed. The data was collected by way of questionnaires and interviews. Information was further extracted from the completed questionnaires. Data was analysed using simple percentages. The survey revealed that management of RCC understand the extent to which their organisation’s operations objectives are being achieved, and there is adherence to the laws and regulations. The study also revealed that there is clear allocation of duties, the roles and responsibility are clearly defined at the RCC procurement and finance department and there is proper supervision from the superiors. The policies and procedures are adequate for the authorisation and approval of transactions. However, the study also reveals that the financial statements are not reliably published and the procurement processes are not reviewed regularly. On the safeguarding of assets the system which was in place does not identify and safeguard the RCC assets and there are no controls in place to prevent unauthorized and illegal expenditures. The study also revealed that there are no proper corrective actions taken to address weaknesses and management is not acting with a great degree of integrity in the execution of its roles. It further reveals that internal controls are not well monitored and therefore the management do not identify risks that effect the achievement of the objective immediately. The employees do not understand the concept and the importance of internal controls including the division of responsibilities. The assessment of this study recommends RCC to adopt COSO framework as it is very broad, and applicable to the effectiveness and efficiency of both operational and financial reporting controls.

Grantor dc:publisher

University of Namibia

Year dc:date.issued

2018

Author dc:creator

• Tjiueza, Ella

• Internal control

Language dc:language.iso

en

Handle dc:identifier.uri

http://hdl.handle.net/11070/2474

OAI identifier oai:identifier

oai:repository.unam.edu.na:11070/2474