The effect of internal control systems on organisatinal performance. A case study of Joint Medical Stores

Abstract

The study sought to establish a relationship between internal control and organizational performance of Joint Medical stores. The study objectives were; to establish the effect of control environment on organization performance, to establish the effect of risk assessment on organization performance, to establish the effect of information and communication on organization performance at joint medical stores A cross sectional survey was used in the course of the study. Both qualitative and quantitative data was gathered in order to establish the relationship between the independent and dependent variables, so as to examine how internal controls are used in Joint Medical Stores and therefore account for the performance levels. The study comprised of 63 employees of Joint Medical Stores. Simple random sampling was used during the data collection process because the technique intended to select a representative without bias .Data was collected using both primary and secondary sources. After collecting data, the researcher organized well-answered questionnaire, data was edited and sorted for the next stage. The data was presented in tabular form, and bar graphs with frequencies and percentages. The researcher used Statistical Package for Social Sciences (SPSS) to analyze the relationship between the variables under study. The findings revealed that there is correlation between control environment and organization performance with a positive and an insignificant relationship (r = 0.032, p 0.01), the results also revealed that there was a correlation between risk assessment and organization performance with a positive and an insignificant relationship (r = 0.034, p 0.01), the results further revealed that there was a correlation between information and communication and organization performance with a negative and significant relationship (r = -0.0040, p 0.01). The study conclusions suggest that internal control systems existed in Joint Medical Stores. However, they did not have a significant impact on the level of organizational performance with insignificant positive relationship between internal controls and organizational performance. The researcher therefore recommended that the entity should invest more in improving the effectiveness of internal control through designing more effective internal control systems. And that Management should encourage staff to participate in decision making because Employees feel encouraged and motivated in accomplishing the goals of the company in which they have taken part in formulating.