The Impact of Internal Control System on Revenue Generation: a Case Study of Power Holding Company of Nigeria (P.H.C.N) Okpara Avenue Enugu
CHAPTER ONE
OBJECTIVES OF THE STUDY
The main objective of this study is to evaluate, the internal control system in operations at power holding company of Nigeria in Enugu state.
Other objectives of the study are:
- To examine the types and techniques of internal control system for revenue generation adopted by Power Holding Company of Nigeria in Enugu state.
- To determine the impact of internal control system on revenue generation.
- To identify the strengths and weaknesses of the system of internal control in all departments in power holding company of Nigeria in Enugu state.
CHAPTER TWO
REVIEW OF RELATED LITERATURE
The accounting and administrative system of an entity may be simple, or they may be massive and complex. Independent public accountants; internal auditor, managers will be required to make periodic studies of the accounting and internal control such a system. It could be impracticable, if not imposing procedures affecting all types of transactions and plans.
There will therefore be a need for the system internal control system to exist or be established in the organization to ensure simplified in the organization to ensure simplification in the accounting and the whole system, this is not only acceptable but also desirable and necessary.
In order to fully understand the subject matter of this topic it is necessary to review the opinions of others in this field.
In this chapter, the following subheadings will be discussed;
- What is revenue?
- What is internal control system?
- Objectives of internal control system
- Types of Internal control system
- Components of internal control system
- Functions of internal control system
- Internal control and the auditor
- Operation of internal control system at power Holding company of Nigeria.
- Limitations of internal control system.
WHAT IS REVENUE
Revenue refers to the monetary event of asset values increasing in the firm due to the physical event of production or sales of the products or services. Some companies also receive revenue from interest, dividends or royalties paid to them by other companies. Revenue may also refer to the amount in a monetary unit received during a period of time. Revenue is associated with products or services of the firm as the source of the expected cash receipts the asset value increasing in the firm occurs because the firm undertakes certain activities or there is performance by the firm. The above may not be achieved without a sound internal control system in that organization or company.
CHAPTER THREE
RESEARCH METHODOLOGY
The aim of this chapter in to present in detail the methods used in this research. This focuses on the various method used by the researcher to obtain data.
Research methodology involves and orderly manner employed in collection, interpreting and analyzing of data used in this study, which involves selection of sample, population, and research data as well as the statistic tool of analysis.
RESEARCH DESIGN
A research design can be described as an outline or plan from which an activity can be carried out (Nworgi, 1999:23). It provides the procedural outline for the conduct of any given investigation.
This research work is designed to study how internal control system affects revenue generation in power Holding Company of Nigeria. This covers all the P. H. C. N., which is represented with the branch at Okpara Avenue. However the findings will be generalized to all.
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND INTERPRETATION
This chapter is concerned with data presentation analysis and interpretation of data collected from both primary and secondary sauces. The data were collected through the use of questionnaires and data unless adequately analyzed makes little or no meaning to anybody.
A total of 40 questionnaires copies were sent out and it was all returned. This presents 100% response. The analysis presented is solely done by using simple percentage based on the response form employees of power holding company of Nigeria Enugu business district on which the questionnaire was administered.
CHAPTER FIVE
SUMMARY OF FINDINGS CONCLUSION AND RECOMMENDATIONS
This chapter summarizes the findings draws conclusion and makes recommendation on this project entitled The impact of internal control system on revenue generation in Power Holding Company of Nigeria in Enugu State.
SUMMARY OF FINDINGS
Based on the analysis of data collected and interpreted the research summaries the findings as follows:
The internal control system in operation has some impact on service delivery and revenue generation. It was discovered that the company adopts various types and techniques of internal Control to satisfactorily meet customer electricity demand, provide credible bills based on proper tariff for electricity consumed within the billing month and therefore generate revenue.
The company adopts measures, which ensures that no one individual can control both the recording function and the procedure relative to processing a transaction thereby segregating their duties.
Internal audit system at the company ensures that operations complies with set policies and promotes accuracy and reliability of transactions recorded.
The study also revealed that opportunities for collusion, fraud, loss of revenue, embezzlement, assets conversion and corruption arises as a result of weak internal control system.
Periodic evaluation of the internal control system by an external auditor is used to effectively access the control activities and detect fraudulent practices.
CONCLUSION
The incidence of internal control system weaknesses have always impeded the ability of Power Holding Company of Nigeria in Enugu state to effectively supply electricity to her customers and therefore generate potential revenue. As such her contribution to the improvement of national goals and objectives is not very satisfactory.
On the basis of the above the main objective of this study was to evaluate the internal control system in operation at Power Holding Company of Nigeria in Enugu State and various points were made. Reveals that internal control system plays a major role in prudently managing the resources and funds entrusted to public sector managers.
The company has an organizational structure denoted by organizational charts, which indicated formal communication patterns within the organization.
RECOMMENDATIONS
Having examined and evaluated the internal control system in operation at Power Holding Company of Nigeria PLC in Enugu state, the study makes the following recommendations.
- Internal control system and the investigating units at the company should be remodeled and strengthened to position them to discharge their duties effectively and efficiently.
- The component sectors of the present corporate Power Holding Company of Nigeria should be unbundled into separate distinct independent entities that handle generation transmission, distribution and marketing.
iii. Secure a culture charge within the various cadres of staff that focuses on customer satisfaction, quality service rendition and transparency in service delivery and procurement process.
- To continuously improve her service of provision of electricity of adequate quality to all customers and delivering credible bills to all customers within the billing month. The company should more to establish more customer care centers to mitigate complaints or wrong, billings, non receipts of bills disconnection improper address and wrong names.
- Prepayment meters should also be seen as an alternative to further accumulation of debts
SUGGESTIONS FOR FURTHER INVESTIGATION
Having examined and evaluated the internal control system in operation at Power Holding Company of Nigeria PLC in Enugu State, the researcher suggests a further study on the effectiveness of debt profile in the company.
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