1.1 Background of the study
Internal control for its vital role in accounting has been viewed and elaborately examined from various standpoints. Internal control system is aimed at improving accountability for actions. The accuracy and liability of records, the safeguarding of assess and the overall efficiency of operations. The primary air why auditors make use of computer in carrying out auditing task is to ensure accuracy, efficiency and reliability in his work as an auditor. His reason had been made more formidable with the emergency of computer revolution ignited by the internet and World Wide Web. Auditors now operate in a highly competitive and changing global auditing environment. According to mull champ who adopted the standard definition which defines internal control the whole system of the management in order to carry on the business of the enterprises, in an orderly and efficient manner. The common point in the definition that worth noting are:
1. Internal control system assists management in running the company’s business in orderly and organized manner.
2. Internal control gives a broad meaning extending beyond the accounting and financial applications.
As mentioned earlier, the definition is remarkably close in describing the meaning of internal control. It is however to promote operational efficiency dynamism and creation role in the control of the business structure. The world is shaped with the advancement in technology that moderate and modernization the homes and business today. The telephone, automatic teller machine satellite, computers and many other technologies are no longer tales from the moonlight but one actually being used to harness information. In recent times, the Nigerian economy has influenced a number of technological evolutions. Computer technology is one of such evolution while the greater number of users enjoys the favours of these life made easy trends, audit and security practitioners are constantly being challenged by their applications. Dependence on computers today in business circle is not by choices. The computer among organization various types of computer’s have been introduced to substantially enhance human efforts in industrial commercial official and domestics activities. Data are captured, stored, processed, analyzed, transmitted and reported with computers. Accountancy which is generally known as the language of business is no exception and has been affected by those changes in technology. The manual book keeping process is given way to computerization in both private and public sectors of the Nigerian economy. All system both manually operated or computerized, whether profit oriented or not operates within conditions of resources constraints. This mass embraces is not without its attendants problems. As a result, various steps are taken and procedures established to ensure maximizing the use of these resources in achieving organizational goal and objectives. Apart from the problem of scarce resources, organizations run a high risk of fraud and errors steps are required therefore to minimize this risk by establishing operating rules and regulations. Internal control represents all such techniques, policies, rule and procedures which the management of an organization has developed for its day to day operations. An evaluation therefore involves considering carefully how good the system in uses is the needs of the organization. According to Adeniji A.A (2001), “Traditional control comprises all the coordinated methods and measures adopted within a business to promote operational efficiency and encourage adherences to prescribed management policies”. The accountancy profession now faces a challenge to recover trust and respect. The reputation of the profession has been damaged by high-profile scandals such as Enron, WorldCom and Parmalat. Those scandals have created some suspicion of accountants among the public on the competence of auditors and the accountancy profession as a whole. Internal controls have been a very important topic in recent years.
INTERNAL CONTROL SYSTEM IN A COMPTERIZED ACCOUNTING ENVIRONMENT