Effects Of Internal Control Systems On Financial Performance

Financial Performance
Financial Performance
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Effects Of Internal Control Systems On Financial Performance

Financial Performance

1.10 Conceptual FrameworkSource:
From the above Conceptual framework, it is clear that Internal controls as an Independentvariable (as measured by the Control Environment, Internal Audit and the Control Activities)affects Financial Performance a dependent variable (as measured by Liquidity of an Entity,Financial Accountability and Financial Reporting). However, there also moderating factorslike Policies established by the Governing council, guidelines established by NationalCouncil for higher Education and Framework governing higher Institution of learning asestablished by the Ministry of Education and Sports.
Control Environment
Internal Audit
Control Activities
DEPENDENT VARIABLEFinancial Performance:
Governing council policies
National Council for HigherEducation
Ministry of Education
1.11 Limitations
The major limitation of the study is that a lot of research has been done on FinancialPerformance, but the Researcher wanted to deviate from the obvious. There is a generalperception that the study has been around for some time. The curiosity of the Researcher wasto answer the question; do the systems really work as expected?The other limitation was the belief that the research may never be read, thus people may notget the benefit of the study. It is therefore the Intention of the Researcher to write papers outof the research and present them in conferences.
1.12 Chapter Summary
The chapter started with an introduction in which the concept of Internal Control systemswas put into perspective, this was followed by the background to the study in which webrought out the general perception that Institution of systems of internal control will alwayslead to improved performance, giving rise to improved reporting and also enhance theaccountability function of management. The Chapter proceeded with the problem statementseeking the establish the persistence of poor financial performance in Uganda MartyrsUniversity despite continued support from the founders, having management of the highestqualification, caliber and dedication, putting in place internal controls, employing world classprofessionals , and having Auditors of International repute. The Chapter handled the purposeof the study which is establishing the relationship between internal control systems andfinancial performance. Objectives of the study were determined as; determining thefunctionality of Internal Controls systems in an Institution of Higher Learning, Examining
 11the performance of an Institution of Higher Learning in Uganda and examining therelationship between Internal control systems and financial performance of an Institution of Higher Learning in Uganda.The chapter handled Research questions which are basically derived from the Researchobjectives. The research hypothesis was handled in which it is believed that there is arelationship between the control environment and the performance of institutions of higherlearning, that an effective internal audit department is related with financial performance of institutions of higher learning, and that functionality of internal control activities andfinancial performance in institutions of higher learning are related.The scope was determined as covering Uganda Martyrs University main campus though theresults are assumed to be applicable to other centers of UMU as well as other Institutions of Higher Learning. The chapter tackled the justification and significance of the research, wherethe justification was to determine the relationship between Internal controls and improvedfinancial performance whereas the significance of the research was to help Institutions of higher learning and those charged with governance in determining the link between Internalcontrols and financial performance. A diagrammatical representation linking internalcontrols (in particular the control environment, internal audit and control activities) andfinance performance was done. Lastly the chapter handled limitations which basicallyincluded the fact that the study has been widely done before and that the research may neverbe read.
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