CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Formulation and implementation of bound policies is one of the attributes of a successful business. It’s the function of management in any business either large or small to formulate policies for the business and ensure that the policies that they have formulated one religiously implemented. Santocks (1979), states the management to set guidelines for documentations of transaction for safeguarding of assets of the enterprise and for approval and authorization of transaction.
Management also have function task and responsibilities to it’s employees and ensures that organizational goals and objective are not only met, but are met on target.In short, the success of failure of any business rests on the shoulder of it’s management. This bread function can only be achieved by the management, if it has a control measure and standard to which all it’s employees should adhere to also not possible for the management of a business to be at all times and place to personally supervise operations. Hence management usually installs all system of control which guide it’s employees on how to perform in accordance to managements stated policies and guidelines. And the measure is known as internal control.The establishment and maintenance of a system of internal control is an important responsibility to management (Auditing standards: 1982, p55).
And the system once installed, should be under continuous supervision by management to determine that it is functioning as prescribed and modified as appropriate for change conditions.Large and small organizations have the financial, capability and human resources to police their employees, and supervise them more appropriate as a complement of internal control, but small organizations do not posses either financial capacity or the supervisory man power to assist management in their asset to closely monitor operation and compliance to policies and guidelines. Hence, internal control becomes more compulsory and relevant to them.