IMPACT Of INTERNAL CONTROL SYSTEM ON ORGANIZATION'S PROFITABILITY. CASE STUDY OF NILE COMMERCIAL BANK. JUBA SOUTHERN SUDAN. PREPARED BY MADUK DAU KOOC DENG BBA/14321/71/Df. A RESEARCH DISSERTATION SUBMITTED TO THE FACULTY OF BUSINESS AND MANAGEMENT IN THE PARTIAL FULFILLMENT FOR THE AWARD OF A BACHELOR DEGREE IN BUSINESS ADMINISTRATION Of KAMAPALAINTERNATIONAL UNIVERSITY. MAY, 2010 TABLE OF CONTENTS TABLE OF CONTENTS ................................................................................................... i APPROVAL ................................................................................................................... iv DECLARATION ·············································································································· V ACKNOWLEDGMENTS ................................................................................................ vi CHAPTER ONE .............................................................................................................. 1 INTRODUCTION ............................................................................................................. 1 1.0 Background of the study: ........................................................................................... 1 1.1 Statement of the problem: ......................................................................................... 2 1.2 Purpose of the study: ................................................................................................ 2 1.3 Objectives of the study: ............................................................................................. 3 1.4 Research questions: .................................................................................................. 3 1.5 Geographic Scope of study: ...................................................................................... 3 1.6 Subject matter scope of study: .................................................................................. 3 1. 7 Significance of the study: .......................................................................................... 3 1.8 Justification of the study ............................................................................................ 4 1.9 Conceptual Framework: ............................................................................................ 5 CHAPTER TWO .............................................................................................................. 6- LITERATURE REVIEW .................................................................................................. 6 2.0 lntroduction: ............................................................................................................... 6 2.1 Definition of concepts: ............................................................................................... 6 Internal Control Systems ................................................................................................. 6 2.2 Relationship between Internal Control Systems and Profitability: .............................. 8 2.3 Components of an internal control system: ............................................................... 8 2.4 Structure of internal control: ...................................................................................... 9 2.5 Objective of an Internal Control System: ................................................................. 11 2.6 The major elements of an effective Internal Control System: .................................. 11 2.7 Evaluation of Internal Control Systems and validity ................................................. 21 CHAPTER THREE ........................................................................................................ 22 METHODOLOGY .......................................................................................................... 22 3.0 Introduction: ............................................................................................................. 22 3.1 Research design: .................................................................................................... 22 3.2 Population of the study: ........................................................................................... 22 3.3 Sampling size: ......................................................................................................... 22 3.4 Methods of data collection: ...................................................................................... 23 3-4-1 Questionnaire ....................................................................................................... 23 3-4-2 Observation: ......................................................................................................... 23 3-4-3 Interviews: ............................................................................................................ 24 3.5 Data processing: ..................................................................................................... 24 3.6 Data analysis: .......................................................................................................... 25 3. 7 Methodology conclusions: ....................................................................................... 25 CHAPTER FOUR .......................................................................................................... 26 INTERPRETATION, ANALYSIS AND DISCUSSION OF FINDINGS ........................... 26 4.0 Introduction .............................................................................................................. 26 4.1 Background information of the respondents ............................................................ 26 4. 1.1 Respondents gender .......................................................................................... 26 4.1.2 Respondents Level of Education Qualification ................................................... 27 4.1.3 Period worked at Nile Commercial Bank, Juba Southern Sudan .......................... 28 4.2 To find out whether internal control systems have been put in place by the management of Nile Commercial Bank ......................................................................... 28 4.3 To find out whether the existing internal system affects the profitability of the organization ................................................................................................................... 29 4.4 To find out how long does the organization review its internal control system ........ 30 4.5 To find out the Impact of ICS on profitability between 2005-2009 ........................... 30 4.6 Analysis of the profitability trends in the years 2005-2009 ...................................... 31 4.7 To investigate the impact of ICS on employees performance ................................. 31 4.8 To find out the hindrances faced in the implementation of ICS ............................... 32 4.9 To investigate the extent to which !CS has been hindered in its implementation .... 32 ii 4.10 Solutions put in place to make internal control system more effective .................. 33 CHAPTER FIVE ............................................................................................................ 34 SUMMARY OF CONCLUSION AND RECOMMENDATIONS ...................................... 34 5.0 Introduction .............................................................................................................. 34 5.1 Summary of Findings .............................................................................................. 34 5.2 Conclusion ............................................................................................................... 35 5.3 Recommendation .................................................................................................... 35 APPENDICES ............................................................................................................... 37 APPENDIX (A) .............................................................................................................. 37 6.0 Time frame of study .............................................................................................. 37 6.1 Budget for the study: ............................................................................................ 37 APPENDIX (B) .............................................................................................................. 38 QUESTIONNAIRES ...................................................................................................... 38 References: .................................................................................................................. 42 Ill APPROVAL This is to satisfy that approval has been given for the research dissertation to be submitted to the School of Business and Management. Name of supervisor: HAJJI KIBIRIGE ALLY RAMATHAN . Signature: ..... ... .. .. ~ -- 01~1?.§lc,._.... .. ...... .... .. ....... Date: ..................... v=.r.LoiJ'l:)/..t) .: .. ... .. ... ............. iv DECLARATION I MADUK DAU KOOC DENG, REG.NO BBA/14321/71/DF, hereby declare that this dissertation is of my own findings and has never been produced by any one else in the faculty of Business and Management for any award in this institution. Name of student: Signature: Date: V ACKNOWLEDGMENTS I am grateful to mention by name all those who contributed to the success of this dissertation. Specifically, I thank Hajji Kibirige Ally Ramathan for contribution on the evaluation of Research