Impact Of Internal Control Systems On The Bookkeeping Practices Of Small Business In The Nsawam Municipality

Abstract

Proper bookkeeping practices is highly dependent on the control systems available in the organisation. Small business are enterprises that mostly do not keep proper records of their operations. This study therefore analyse the effect internal control system on book keeping practices of Small business in Nsawam Municipality. The first objective of the study was to examine the internal control system utilized by small business in Nsawam Municipality. The second objective of the study was to examine the effect of internal control system on bookkeeping practices of small business. The third and final objective of the study to analyse the challenges affecting internal control system among small business. Questionnaires were the data collection instruments. The required sample size was chosen using the cluster sampling technique. A sample size of 362 were considered in the study. Exploratory Factor Analysis, Multiple regression and descriptive analysis were employed to achieve the study’s objectives. The study found that control activities was the system most of the small business s have employed in their operations. The study also found that there was a significant relationship between control environment, risk assessment, information and communication and monitoring activities and book keeping practices. There was no significant relationship between control activities and book keeping practices. The study found that, inadequate policies and procedures, lack of segregation of duties, too much politics were the challenges affecting the internal control system of small business. The study recommends that management must be effective and to guarantee continual and separately supervising internal control to assess if controls are there and operates well.