Entrepreneurship skills and performance of SMES: A case study of Aggrey zone in Rubaga Division-Kampala district

Abstract

The study examined the effect of internal control on financial performance in the Agribusiness: A Case of Aponye Uganda Limited (AUL)’s Agro processing. Specifically intended to examine the effect of internal control environment on financial performance at AUL, examine the effect of internal control activities on financial performance at AUL and establishing the effect of internal control monitoring on financial performance at AUL. A cross-sectional survey design was used to capture in-depth data. A sample of 73 elements from a population of 82 participants included top management, middle level management, lower-level management and External Auditors of AUL were obtained using simple random and census sampling techniques. Data was collected through key informant interviews, questionnaires, and document review, with a triangulation approach applied to capture both primary and secondary data. The study yielded a response rate of 91.5%. Regression results show that internal control activities emerged as the strongest predictor of financial performance (B = 0.687, p = 0.000), indicating that effective control mechanisms significantly enhance financial outcomes. Then internal control environment exhibited a significant influence on financial performance (B = 0.387, p = 0.000). And internal control monitoring showed an insignificant effect on financial performance (B = 0.075, p = 0.536). The study recommended that the internal control oversight should be strengthened, improve asset management, enhance internal audit independence, increase leadership commitment, and optimize debt recovery strategies while improving corporate governance structures. Similarly, strengthen adherence to standard operating procedures, address procurement and supplier oversight issues, strengthen working capital management, strengthen Management’s responsiveness to audit findings, improve external audit execution, robust stock monitoring systems and integrate audit findings into strategic planning. The study invited investigation on the impact of timely implementation of audit findings on financial stability and efficiency, evaluate how the establishment of a fully functional internal audit unit can improve financial oversight and reduce fraud and investigate strategies to enhance management vigilance in monitoring internal controls to reduce inefficiencies and financial mismanagement in agro processing units