THE ROLE OF INTERNAL CONTROL MEASURES IN THE PREVENTION OF FRAUD AND OPERATIONS ERRORIN GHANAIAN FIRMS
CHAPTER 1—-INTRODUCTION
1.1
BACKGROUND OF THE STUDY
The aim of every organization whether private or public is to have a successful operation which leads to the achievement of corporate aims of objectives. This requires that the organizations assets and resources are effectively managed. Therefore the need to protect the firm’s assets and the adoption of established procedures and policies for successful operations is imperative. Internal controls consist of all procedures and methods which the firm applies to protect its assets and conduct a successful operation
Emma Zhang (http://www.carrtegra.com/author/emmazhang/)
(2016)
. The essence is to prevent fraud and losses arising out of fraudulent activities. Internal control detects deviations in financial records through the adoption of internal control measures. Such as establishing a system of checks and balances, adopting an authorization procedure. The essence of authorization is to verify the validity of transactions. Segregation of duties to provide for check and balances and the detection of errors in the operation of the firm and taking corrective measures. The essence is for operational efficiency and effective communication. Internal control measure also involves the maintenance of an effective human resources through the establishment of clear line of responsibility and authority. Other internal control measures include the physical protection of the firm’s assets, processes and data, Documentation and record management for the preservation of accurate records and the monitoring of the firms operations. The study seeks to appraise the role of internal control measure in the prevention of fraud and operation errors in Ghanaian firms.
1.2
STATEMENT OF THE PROBLEM
The increasing level of fraud and inefficient operation is associated with lack of good internal control measures. The process of achieving success in business cannot be disassociated with sound internal control policies as many firms conduct their business without the adherence to sound principles of management as internal control measures. Consequently, operations are not properly segmented to establish a clear line of responsibility and authority which leads to inefficient workforce, no proper documentation and record keeping leading to errors in record keeping and fraudulent activities. Also, many firms do not take adequate measure to protect their assets, processes and information and lack good monitoring and evaluation method. The study seek investigate the role of internal control measure in the prevention of fraud and operation errors in Ghanaian firms.
1.3 OBJECTIVES OF THE STUDY
The main study objective is to investigate the role of internal control measure in the prevention of fraud and operation errors in Ghanaian firms; while the specific objectives include: