AN EVALUATION OF THE INTERNAL CONTROL SYSTEM IN HOTEL INDUSTRY
CHAPTER ONE
INTRODUCTION
1.1 INTERNAL CONTROL
The Canadian institute of chartered accountants. Exposure draft of proposal auditing recommendation describes internal control as comprising of the plan of an organization by the management of the emprise to achieve management objective of ensuring as far as is practical the orderly and efficient conduct of its business including the safe guarding of assets the reliability of accounting records and the timely preparation of reliable financial information.
The chartered institute of public and finance accountant (CIPFA) state that the internal control system comprise the whole system of controls financial and otherwise, established by management in order to carry on the business of the organization in an orderly and efficient manner, ensure adherence to management policies, safeguard the assets and secure as far as possible the completeness and accuracy of the record individual component of internal control system are known as controls or internal control.
Internal control system therefore could be view as a firms organizational plan including all method and measure the firm takes to
vSafeguard its assets
vEnsure the accuracy and reliability of its accounting data
vPromote operational efficiency
vTo encourage compliance with company policy
Internal control can be divided into two main categories:
Financial control which are primarily concerned with legitimacy of expenditure
Security of assets and income and other control mainly administrative which are created and maintained by management to ensure that an activity is relevant to the needs of an organization and is carried out in the most effective and efficient manner.
These categories are independent out should not be regarded in isolation as both have an impact on the performance of activities and their consequent cost and value to the organization
Accounting and financial control
These consist of all accounting, financial and monetary techniques and system built into the internal control system to promote and encourage the attainment of the objective of the internal control. Generally, accounting and financial control consist of :
Budgetary control
The organization should plan and control its expenditure and income to meet its predetermined objective
Legitimacy of income and expenditure
All income and expenditure should be in accordance with the policies of the organization properly authorized and within the law
Security of assets
Assets of the organization should be kept in proper custody and not wrongly applied, either by error or intent
Accounting control
It include internal audit and internal checks
Management control
These consist of non accounting and non financial system and method which are building into the system to promote the attainment of the four major goal of internal control system.
These goal as enumerated before are:
vTo safeguard a firms assets
vTo ensure the accuracy and reliability a firms accounting data
vTo promote operational efficiency of a firm
vTo encourage compliance with a firms policy
1.2 STATEMENT OF PROBLEM
Most government establishment in Nigeria of which hotel industry is one are known for their inability to keep complete and / or accurate records and quite often lose some of the assets under their control to fraudulent workers and other enemies of progress who adopt any strategy possible to satisfy their selfish interest at the expense of public interest. To this and, therefore, the researcher has chosen as the main problem of this work, to identify the nature,
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