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INTERNAL CONTROL SYSTEMS IN GOVERNMENT ESTABLISHMENT A CASE STUDY OF PROJECT DEVELOPMENT INSTITUTE PRODA ENUGU

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CHAPTER ONE

INTRODUCTION

1.1 THEORETICAL FRAMEWORK

Auditing standards and guidelines (AS&G) 3.204 defined internal control as “the whole system of control both financially and otherwise established by management in order to carry on the business of the enterprise in an orderly and efficient manner to ensure adherence to management policies, safeguard the asset and secure, as far as possible, the completeness and accuracy of the records. The individual components of an internal control system are known as “controls” or “internal control”. The earliest known form of accounting is stewardship accounting and has its origin far back in 4500BC. In this system, persons called stewards were appointed to manage other peoples’ affairs. The total charge against the stewards are made up of the balance of items under their custody at the beginning of the period plus items received from their masters and third parties on behalf of their masters less items returned to the master and those given out to third parties on his behalf.

Later, this form of accounting gave way to the modern form of accounting which is sub-divided into: Financial Accounting, Cost Accounting, Taxation Accounting, Management Accounting and Public sector Accounting. Financial accounting is a system of accounting that attempts to report the operating result during a period as well as the position of assets and liabilities at a particular date. Cost accounting, on the other hand, avoids the possible losses arising from the mishandling of financial data. It also attempts to assist management by reporting operating results at regular internals and at different levels of activities. it, as well, measures the actual performances against the planned performance. Taxation Accounting is another branch of accounting that is required to assist in management decision making. Tax has a lot of implications for management decision on one hand and it is a vital source of revenue to the government on the other hand. Management Accounting get its impetus from the industrial revolution.

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INTERNAL CONTROL SYSTEMS IN GOVERNMENT ESTABLISHMENT A CASE STUDY OF PROJECT DEVELOPMENT INSTITUTE PRODA ENUGU
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