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Effect of Internal Control on Performance of Cooperatives in Nigeria: A Case Study of CSM Cooperative Society Abuja, Nigeria

Received: 1 July 2021     Accepted: 13 July 2021     Published: 24 July 2021
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Abstract

This paper examined the impact of internal control on operational performance in CSM Cooperative Society. Cooperatives have become a good source of affordable finance for both low and medium income group all over the world. As critically important as cooperatives are to the growth and development of Nigeria vide the provision of funds for business and investment hence employment, they may not survive in the long term if they are not properly managed. The presence of an effective and efficient internal control system will go a long way in aiding the cooperatives to manage their operations well. The study investigated internal control impact on performance of cooperatives in Abuja. The target population was the Executive Management Committee, Senior Management, Senior and Junior staff of CSM Cooperative, Abuja, Nigeria. Survey method was employed, and questionnaires were distributed to all the categories of employees identified. Multiple-Linear Regression was used to analyze the data collected vide a 5 point Likert-scale questionnaire. The study revealed that the relationship between internal control (monitoring, control environment, control activities) and performance of cooperatives is not significant. It was recommended that cooperatives should ensure that they seek for and implement measures that increase profitability in addition to instituting a good and functioning system of internal control. The study also recommended that future research should add the two variables of internal control not covered in this research and also use a sample number of cooperatives in Abuja.

Published in Science Journal of Business and Management (Volume 9, Issue 3)
DOI 10.11648/j.sjbm.20210903.16
Page(s) 197-202
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2021. Published by Science Publishing Group

Keywords

Internal Control, Cooperatives, Control Environment, Performance, Control Activities, Monitoring

References
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[2] Asat, S. H., Maruhun, E. N. S., Haron, H., & Jaafar, M. (2015, July). Enterprise risk management (ERM) and organisational performance: The case of housing developers in Malaysia. In MARIM International Conference, Langkawi.
[3] Channar, Z. A., Khan, M., & Shakri, I. H. (2015). Internal Control Effectiveness & its Relationship with Financial Performance. Formerly Journal of Management and Social Sciences, 11 (2), 92-107.
[4] COSO. COSO - Internal control / integrated framework executive summary. Committee of Sponsoring Organization of the Treadway Commission 2013; 1–8.
[5] Deloitte (2021). Financial reporting-COSO control activities. Retrieved from https://www2.deloitte.com/ng/en/pages/audit/articles/financial-reporting/coso-control-activities.html.
[6] Deloitte (2021). Financial reporting-COSO information and communication. Retrieved from https://www2.deloitte.com/ng/en/pages/audit/articles/financial-reporting/coso-information-and-communication-monitoring-activities.html.
[7] Hayali A, Dinc Y, Sarılı S, Dizman AS, Gundogdu A. (2013). Importance of internal control system in banking sector: evidence from Turkey. Turkey: Marmara University. Retrieved from https://www.researchgate.net/publication/258258914.
[8] Ibrahim, S., Diibuzie, G., & Abubakari, M. (2017). The impact of internal control systems on financial performance: The case of health institutions in upper west region of Ghana. International Journal of Academic Research in Business and Social Sciences, 7 (4), 684-696.
[9] Institute of Internal Auditors (IIA). International standards for the professional practice of internal auditing, (October), 2012.
[10] Nguyen, T. (2021). The effect of internal control on the performance of pharmaceutical firms in Vietnam. Accounting, 7 (2), 395-400.
[11] Noviarto, S., & Samputra, P. L. (2021, March). MSME’s sustainable economic behavior for struggling poverty: Agency theory vs. bounded rationality theory. In IOP Conference Series: Earth and Environmental Science (Vol. 716, No. 1, p. 012120). IOP Publishing.
[12] Nurse, M. (2018). The control environment: the foundation of an effective organizational internal control system. Retrieved from https://clarknuber.com/control-environment-foundation-effective-organizational-internal-control-system/.
[13] Nyakundi, D. O., Nyamita, M. O., & Tinega, T. M. (2014). Effect of internal control systems on financial performance of small and medium scale business enterprises in Kisumu City, Kenya. International Journal of Social Sciences and Entrepreneurship, 1 (11), 719-734.
[14] Posthuma, R. A., Campion, M. C., Masimova, M., & Campion, M. A. (2013). A high performance work practices taxonomy: Integrating the literature and directing future research. Journal of management, 39 (5), 1184-1220.
[15] Qian, L., Wang, Y., & Yang, P. (2020). Do control mechanisms always promote collaborative performance: the role of formal institutions and business ties. Journal of Business & Industrial Marketing.
[16] Selim, M., & Farooq, M. O. (2020). Elimination of poverty by Islamic value based cooperative model. Journal of Islamic Accounting and Business Research.
[17] Sofoluwe, N. A. (2020). Relevance of Entrepreneurial Orientation Strategy to Cooperative Business Organizations in Nigeria. Izvestiya. Journal of Varna University of Economics, 64 (4), 415-429.
[18] Sofoluwe, N. A., Ogunola, A. A., & Hassan, A. B. (2020). The assessment of commitment in the cooperative organization in Nigeria. Organizacijų vadyba: sisteminiai tyrimai= Management of organizations: systematic research. Kaunas: Vytauto Didžiojo universitetas, 2020, T. 84, p. 81-93.
[19] Umar, H., & Dikko, M. U. (2018). The effect of internal control on performance of Commercial banks in Nigeria. International Journal of Management Research, 8 (6), 13-32.
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  • APA Style

    Maren Damina Makut, Umar Abbas Ibrahim. (2021). Effect of Internal Control on Performance of Cooperatives in Nigeria: A Case Study of CSM Cooperative Society Abuja, Nigeria. Science Journal of Business and Management, 9(3), 197-202. https://doi.org/10.11648/j.sjbm.20210903.16

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    ACS Style

    Maren Damina Makut; Umar Abbas Ibrahim. Effect of Internal Control on Performance of Cooperatives in Nigeria: A Case Study of CSM Cooperative Society Abuja, Nigeria. Sci. J. Bus. Manag. 2021, 9(3), 197-202. doi: 10.11648/j.sjbm.20210903.16

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    AMA Style

    Maren Damina Makut, Umar Abbas Ibrahim. Effect of Internal Control on Performance of Cooperatives in Nigeria: A Case Study of CSM Cooperative Society Abuja, Nigeria. Sci J Bus Manag. 2021;9(3):197-202. doi: 10.11648/j.sjbm.20210903.16

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  • @article{10.11648/j.sjbm.20210903.16,
      author = {Maren Damina Makut and Umar Abbas Ibrahim},
      title = {Effect of Internal Control on Performance of Cooperatives in Nigeria: A Case Study of CSM Cooperative Society Abuja, Nigeria},
      journal = {Science Journal of Business and Management},
      volume = {9},
      number = {3},
      pages = {197-202},
      doi = {10.11648/j.sjbm.20210903.16},
      url = {https://doi.org/10.11648/j.sjbm.20210903.16},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.sjbm.20210903.16},
      abstract = {This paper examined the impact of internal control on operational performance in CSM Cooperative Society. Cooperatives have become a good source of affordable finance for both low and medium income group all over the world. As critically important as cooperatives are to the growth and development of Nigeria vide the provision of funds for business and investment hence employment, they may not survive in the long term if they are not properly managed. The presence of an effective and efficient internal control system will go a long way in aiding the cooperatives to manage their operations well. The study investigated internal control impact on performance of cooperatives in Abuja. The target population was the Executive Management Committee, Senior Management, Senior and Junior staff of CSM Cooperative, Abuja, Nigeria. Survey method was employed, and questionnaires were distributed to all the categories of employees identified. Multiple-Linear Regression was used to analyze the data collected vide a 5 point Likert-scale questionnaire. The study revealed that the relationship between internal control (monitoring, control environment, control activities) and performance of cooperatives is not significant. It was recommended that cooperatives should ensure that they seek for and implement measures that increase profitability in addition to instituting a good and functioning system of internal control. The study also recommended that future research should add the two variables of internal control not covered in this research and also use a sample number of cooperatives in Abuja.},
     year = {2021}
    }
    

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    AU  - Maren Damina Makut
    AU  - Umar Abbas Ibrahim
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    DO  - 10.11648/j.sjbm.20210903.16
    T2  - Science Journal of Business and Management
    JF  - Science Journal of Business and Management
    JO  - Science Journal of Business and Management
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    EP  - 202
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    UR  - https://doi.org/10.11648/j.sjbm.20210903.16
    AB  - This paper examined the impact of internal control on operational performance in CSM Cooperative Society. Cooperatives have become a good source of affordable finance for both low and medium income group all over the world. As critically important as cooperatives are to the growth and development of Nigeria vide the provision of funds for business and investment hence employment, they may not survive in the long term if they are not properly managed. The presence of an effective and efficient internal control system will go a long way in aiding the cooperatives to manage their operations well. The study investigated internal control impact on performance of cooperatives in Abuja. The target population was the Executive Management Committee, Senior Management, Senior and Junior staff of CSM Cooperative, Abuja, Nigeria. Survey method was employed, and questionnaires were distributed to all the categories of employees identified. Multiple-Linear Regression was used to analyze the data collected vide a 5 point Likert-scale questionnaire. The study revealed that the relationship between internal control (monitoring, control environment, control activities) and performance of cooperatives is not significant. It was recommended that cooperatives should ensure that they seek for and implement measures that increase profitability in addition to instituting a good and functioning system of internal control. The study also recommended that future research should add the two variables of internal control not covered in this research and also use a sample number of cooperatives in Abuja.
    VL  - 9
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    ER  - 

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Author Information
  • Department of Business Administration, Nile University of Nigeria, Abuja, Nigeria

  • Department of Business Administration, Nile University of Nigeria, Abuja, Nigeria

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