Internal Control Practices In Public Institutions

2.1 Internal Control Practices in Public Institutions.

Internal controls public institutions are aimed at ensuring a value added audit service with the primary focus of achieving a set objective, through the application of an organized and disciplined approach that can appraise and enhance the level of effectiveness with respect to risk management. Thus, internal control systems help ensure that there is proper governance in government institutions (IIA, 2006). Accordingly, Lin and Rao (2009), concludes that internal controls may influence the auditing practices of the organization such that it would help strength and eliminate any weaknesses inherent in the institutions auditing. Such internal controls contribute in the determination of the

Compliance with applicable laws and regulations. This definition stresses several key concepts such as "process," "reasonable assurance," and the "objectives" of internal control. Internal control is a process because it is to be planned, executed, and monitored by the board of directors and management of an entity as a part of the management process and because it is the sum of a series of actions that permeate an entity 's business processes. Internal control can provide only reasonable, not absolute, assurance regarding the achievement of an entity 's objectives. An entity 's objectives for internal control include not only reliability of financial reporting and compliance with applicable laws and regulations, but also effectiveness and efficiency of operations. The former focuses on the fair presentation of financial information regarding an entity 's financial condition, results of operations, and cash flows, while the latter aims at an entity 's profitability and

2008) has resulted in more consideration being given to the internal audit function as playing a significant role in ensuring effective corporate governance and financial reporting. Internal control is seen as an effective tool (Verdina, 2011) in ensuring supervision over the carrying out of plans and taking necessary correction. Internal control system issues are considered significant to organizations particularly in ensuring reliability and accuracy of the financial reports (Changchit, et al., 2001) but it is still an area that receives too little attention in the management literature. According to Jokipii, (2010) there is the need for more research to be conducted in the area of the effect of effective internal control system on internal auditing activities. In addition, the subject of effectiveness of internal audit is crucial in creating improvement in the government agencies (Unegbu and Kida, 2011). This has resulted in more attention been given to the measurement of the effectiveness of internal audit function In line with this, there is the need for an assessment of internal audit since it has a role to play in realizing local objective. There is the need for future research to be conducted (Arena and Azzone (2010), Chaveerug (2011) and Mihret et al, (2010)) in order to examine the determinants of internal audit effectiveness and the way they interact among themselves. The public sector