ABSTRACT
This project titled EFFECTIVENESS OF INTERNAL CONTROL IN A TRADING COMPANY was considered necessary because of the frauds which are perpetuated in trading companies recently. That was part of what led to the closure of some of them. Our findings revealed that Citiserve limited has similar experience before it was able to put in place checks and balances mechanism i.e EFFECTIVE INTERNAL CONTROL SYSTEM.
Therefore, the study became necessary as to examine the situation in a trading company where their internal controls are effective. For this reason I decided to carry out a research on CITISERVE LIMITED to establish the advantage, the practice, the importance and the effect of internal control on a company’s business and finances
CHAPTER ONE
1.0.INTRODUCTION
1.1 BACKGROUND TO STUDY
A trading company is an Enterprise that deals in selling and distribution of goods and services. They buy mostly from the producer/ manufacturer for resale to wholesaler, retailer, and final consumer, depending on stage of chain of distribution it falls. The company and Allied Matter Acts of 1990 requires that trading company should keep records of all financial activities both historical, budgetary and financial records should be internally substantiated through internal audit and further subjected to independent examination by an external auditor. There would not be enough watch-dog for any organizations financial activities except effective internal control is put in place.
Effective internal control is the checks and balance mechanisms that force the management to be well focused and ensure that the organizational goals are achieved in an effective and efficient manner. If this is not in place the management may decide to do things that benefit their personal interest at the expense of the organization.
The success of the administration of the trading company will go a long way in determining the success of the whole organization. The success of the administration is a function the attitude of the management team or on the alternative, on the checks and balances mechanism put in place as watch dog to the management.
Therefore there is need to test and know if the internal control in the company is being allowed to be effective or not.