Internal Control Literature Review
Literature Review
2.1 Introduction
This chapter presents literature review of the proposed study. It provides the theoretical framework for internal control systems and its impact on clean audit outcomes. Furthermore, the research process will begin with a review of applicable literature to help in building a strong foundation of background of topic.
2.2 Concept of internal control
The Department of State Expenditure (in Visser, 2011: 84) defines internal control “as a system of controls established by senior management, in order to perform the activities of a government institution”. It is through the tightened internal control systems that assets of government can be safeguarded and secured. However, Puttick and Van Esch (in Visser, 2011:
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At the same the Cahill (2006), argues that the systems of internal control involve the financial and administrative checks and balances that are designed and supported to ensure that the goals, objectives and responsibilities of the institution are realised. It can be classified as preventative detective and/or corrective.
According to the Business Dictionary (2016) control is defined as:
A management function aimed at achieving defined goals within an established timetable, and usually understood to have three components (1) setting standards, (2) measuring actual performance, and (3) taking corrective action.
Another definition given by Walsh, Seward, Chung, Chong and Jung (cited in Lakis and Giriunas (2012:143) can further state;
Internal control involves the supreme enterprise control apparatus and enterprise shareholders, whereas external control might be defined as the power in the market or branch, competitive environment or state business
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