CHAPTER ONE1.0 INTRODUCTION1.1 BACKGROUND OF THE STUDYEvery organization both profit or non-profit organization has itsobjectives and goals in mind to achieve. For the non-profit makingorganization, their goal is to satisfy the social need of the citizensand in the effort to achieve these purposes supervision more oftenthan not play a vital role.The size and scope of these organizations have sometimesmade it hard for the executors to exercise personal and first handsupervision of operation. It is in this light that internal controlestablished by management is initiated. For an organization tocarryout its business there must be some factors put in place forthe smooth running of the organization like materials, machines,money etc.These need to be well co-ordinated in order for the success ofthe organization to be achieved. These factors are used by a groupof persons known as management. Neither can management existswithout an organization both are inseparable. The system of12internal control provides assurance to management of thedependability of the accounting data used in the decision making ofthe organizationIt has been discovered that due to lack of internal controlseveral banks have been discovered to have defrauded itscustomers mostly foreign investors, Having discovered this, banksnow take extra precaution before clearing a cheque because oframpant incidence of fraud and forgeries which have placed bank.Loss on average of N1m each working day of the year in Nigeria.Due to this challenges, CBN issued a directive to banks to increaseits capital base to N25 billion.Management use internal control as a tool to check it staff dueto the fact that managers are not able to monitor the activities ofthe organization. It therefore adopts the internal control in such away that the system checks itself and any irregularity within thesystem is been detected and corrected.To ensure that the system checks itself, management coulduse devices such as segregations, supervision of work andacknowledgement of performance. The effective arrangement and13implementation of this control system would ensure propermanagement
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