ASSESSING INTERNAL CONTROLS AND ORGANIZATIONAL PERFORMANCE: A CASE OF ZOOMLION GHANA LIMITED UPPER EAST REGION

Abstract

The one most important thing that can provide this early warning signal of possible losses or problems is the effective implementation of internal control systems. The general objective is to determine the effect internal control systems have on the performance of Zoomlion Ghana Limited. The study looked at three specific objectives which are to identify the effectiveness of Zoomlion internal control systems, to assess the effect of internal control systems on organizational performance and to identify the factors that limit the effectiveness of Zoomlion internal control systems. The study employed logistic regression, simple linear regression and Likert scale to address the objectives respectively. The study revealed that, the internal control systems of Zoomlionn Ghana Limited is ineffective due to absence of monitoring, information and communication and control environment components. It also revealed that, there exist positive relationship between internal control systems and organizational performance. An improvement in an organizational internal controls lead to 0.456% increase in an organization's profitability. It also found out that, undefined segregation of duties hinders implementation of internal controls, management desire to achieve certain reporting results hinders implementation, the management compliance with rules and regulations as against principles and values hinder the implementation, rapidly changing business environment hinders internal control implementation, among others are the factors that limit the effectiveness of Zoomlion Ghana Limited internal control systems. The study recommends that Zoomlion Ghana limited should take steps to design and embed control environment, monitoring and information and communication components into its internal control systems and address the limiting factors.