Christian Stewardship and Church Management: Examining the Effectiveness of Internal Control System in Christ Apostolic Church, Adesola Aperin Oniyere, Ibadan
Chapter One
Objectives of the Study
The broad objective of this research work is to examine the effectiveness of internal controls system in the churches of Nigeria using Christ Apostolic Church, Adesola Aperin Oniyere, Oyo state- as a test case.
In order to accomplish the above general objective, the study sought to address the following specific objectives:
- To identify the various forms, measures and mechanisms put in place to enhance the effectiveness of internal controls in Christ Apostolic Church.
- To identify and assess the key element of an effective and efficient internal control function.
- Identify the major problems that inhibit the effective and efficient functioning of internal controls in the accomplishment of the church’s goals.
CHAPTER TWO
LITERATURE REVIEW
Introduction
This chapter examines existing works on the topic internal control with particular emphasis on; its effectiveness in the local government sector. The literature review therefore combines recent findings from the empirical internal control literature with established insights from studies of its effects in the local government sector. The review of the various sources of internal controls will draw from recent publications and the happenings within the sector. It begins with concise overview of the evolution of internal control, the internal control system, components of internal control systems, importance and limitations of internal control systems and many others.
The Evolution of the Practice of Internal Control
As far back as 4000BC historians believed that formal recording keeping systems were first instituted by organized business, government in the near east to allay the concerns of government and management of various enterprises. However, the need for an indication of audit and for that matter internal audit can be traced back to public finance system in olden Babylonian, Greece, the Roman Empire, etc.., all of which developed detailed systems of checks and counter checks. Specifically, the government of the time was worried about incompetent staffs prone to making book – keeping errors and inaccuracies as well as corrupt officials who were motivated to perpetuate fraud whenever the opportunity arose.
Another major factor in the emergence in internal controls was the extended span of control faced by management in business employing thousands of people and conducting operations in many locations. The main objectives of internal auditing were primarily built around the protection of assets.
Prior to 1941 internal controls and internal audit was essentially a clerical function with no organization and standards and also no code of conduct. The old concept of internal auditing can be compared to a form of insurance of which the major objective was to discover fraud more quickly than it could be discovered by public accountant on annual audit. By the end of 1941 a turning point was marked in the emergence of internal auditing as two significant events occurred. The first major book on the subject was published –Victor Z Brink’s internal auditing; also the institute of internal auditors was formed according to fundamentals of the internal audit function. 1971 saw the approval of standard for professional practice for internal auditing. This was further reviewed in 1976, 81 and 90 to reflect the rapid changes in the profession.
Internal Control Systems
According to ICA- Nigeria (2005), internal audit is an independent appraisal function established within an organization that seeks to review the extent to which management is able to achieve organizational objectives in an efficient manner.
ICA – Nigeria (2005) further explained experience with such models shows that if the results appear odd to those who are familiar with the organization and its work, an iterative process of adjustment shall be required before and acceptable result is obtained.
According to Omane – Antwi (2009), internal controls systems (as appropriately and initially defined by the Auditing Practices Committee of United Kingdom) includes the whole system of controls, financial and otherwise, established by management in order to carry on the business of the enterprise in an orderly and effective manner, ensure adherence manner to management policies, safeguard the assets and secure as far as possible the complete accuracy of the record. The auditing committee of United Kingdom describes the components of internal control systems in the auditor’s operational standard as:
CHAPTER THREE
RESEARCH METHODOLOGY
Introduction
This chapter deals with the research methodology used for the course of the study, which consists of research design, population, sampling technique and data collection method and data analysis.
Research Design
The research design used was survey design where data were gathered from respondents. This type of research design was best appropriate since it provided the researcher the opportunity to collect primary data. Furthermore, the researcher engaged the respondents which made it possible to understand the dynamic factors of the research by having a direct experience. The advantage with the survey design was that the researcher had the likelihood to experience how the internal control system of the church is practiced rather than getting it through the secondary sources.
Population
The general staff including the management of Christ Apostolic Church; Adesola Aperin Oniyere, Ibadan state Nigeria were considered for population of the research study.
CHAPTER FOUR
FINDINGS AND DISCUSSIONS OF DATA
Introduction
This chapter provides information on the data collection procedure adopted, analysis of the data and findings. The responses from the respondents are described, analyses, and inferences made to establish relationships.
With a questionnaire as the main research tool to gather data from the respondents, the first section was intended to gather data on the background of the respondents. Frequency tables and charts used in analyzing the data gathered from the respondents.
CHAPTER FIVE
CONCLUSION AND RECOMMENDATION
Introduction
This chapter present the conclusion and makes some important recommendations and suggestions to the problems identified from the study.
Conclusions
It is the responsibility of management of the church to decide on the extent of the internal control mechanism, which is deem appropriate and such controls should be designed in part to prevent, control and minimize errors, irregularities that might arise rather than preventing or eliminating total fraud and irregularities. The effectiveness of internal control system rest in the duties and responsibilities of the management of the organization which arise out of the contractual duty of care once they act as stewards for and on behalf of the church.
The management should exercise and discharge their duty of care by: adhering to the strict code of conducts of the church, monitoring compliance and taking actions against breaches, strengthening the internal audit unit, and making the audit committee powerful as well.
Strong effective and efficient internal control in the church is very important and essential element towards their growth, survival and achievement of goals, objectives or targets set. Therefore management and employees at all level in the church have a major responsibility for the organization success in internal control mechanism. If they do not insist on accurate and adequate documentation, compliance of accounting standards and principles, separation of duties, authorization, timely recording of information ,effective and efficient internal audit unit, competent and reliable personnel and so on as recommended by Larson et al (1987) and Vatter (1950), then, the organizations troubles becomes extensive and inevitable.
The study however concluded that, the staffs of Christ Apostolic Church have knowledge in internal control system which is effective. They had taken and participated in workshops organized for staff in relation to internal control system issues. Issues of internal control systems are also communicated to staff members but not effective. However there are deficiencies in the organization’s computer base which needs proper remedies. There are also no defined roles for staff and management for specific functions causing a threat to the internal control system of the church.
Recommendations
From the findings of the research the researcher recommends that the church should employ more personnel who are members of the professional bodies such as the ICA Nigeria, CAN, and CIMA into the unit, this is because with their knowledge and in-depth study of their profession it will help to reduce the problems of internal control as highlighted in this work.
- Furthermore, the management of the church should strengthen the training programs, refresher courses and seminars for their employees on regular basis. This will help them to upgrade their skills and knowledge in their field of work. All staff and employees should be encouraged to learn and keep to date with technical matters and new technologies.
- Also management of the church should ensure that there is proper division of work and responsibilities as well as rotation of duties.
- The control mechanism used in the organization should be reliable and checked often to ensure that assets of the organization are secured.
- It can be inferred from the above reviews that for every entity to succeed in achieving its goals and objectives it should not only have an evidence of effective internal control systems, and an effective and efficient internal Auditor but all parties should be committed to the process and periodically have a mechanism to test the system to find out whether they are working well. Thus, the objectives of a church are in away embodied in that of internal control and internal audit unit. Therefore, the objective of internal control and internal audit unit and for that matter, a company will be defeated if there exist weak and inadequate internal control systems and ineffective internal Auditor as a result of challenges or limitations. Hence, it will be of great importance to the management of the church to ensure that there are some acceptable degrees of perfection in internal control systems and internal auditing unit which will periodically test the systems to find out whether they exist and are working.
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