Internal Control Systems and Financial Performance of Selected Savings and Credit Cooperative Organisations (SACCOs) in Luwero Town Council Uganda

TABLE OF CONTENT

DECLARATION ....................................................................................................... i

APPROVAL ............................................................................................................. ii

DEDICATION ........................................................................................................ iii

ACKNOWLEDGEMENT ............................................................................................ iv

TABLE OF CONTENT .............................................................................................. V

ABSTRACT ............................................................................................................ X

CHAPTER ONE 

INTRODUCTION .............................................................................................. 1

1.0 Introduction .................................................................................................... 1

1.1 Background of the study .................................................................................. 1

1.1.1 Historical perspective .................................................................................... 1

1.1.2 Theoretical perspective ................................................................................. 3

1.13 Conceptual perspective .................................................................................. 4

1.1.4 Contextual perspective .................................................................................. 5

1.2 Problem Statement ................ : ......................................................................... 6

1.3 General objective of the study .......................................................................... 7

1.4 Study objectives .............................................................................................. 7

1.5 Research questions .......................................................................................... 7

1.6 Scope of the study ........................................................................................... 8

1. 6 .1 Content scope .............................................................................................. 8

1.6.2 Geographical scope ....................................................................................... 8

1.6.3 Time scope ................................................................................................... 8

1. 7 Significance of the study .................................................................................. 8

1.8 Operational definitions ..................................................................................... 9

CHAPTER TWO

LITERATURE REVIEW 

2.0 Introduction .................................................................................................. 10

2.1 Theoretical Review ........................................................................................ 10

2.1.1 Agency theory ............................................................................................ 10

2.1.2 Reliability theory ......................................................................................... 12

2.2 Conceptual framework ................................................................................... 14

2.3 Related literature ........................................................................................... 14

2.3.1 Internal control activities ............................................................................. 15

2.3.2 Determinants of financial performance ......................................................... 20

2.3.3 The relationship between internal control system and financial ...................... 21

CHAPTER THREE 

METHODOLOGY 

3.0 Introduction 

3.1 Research design 

3.2 Research Population

3.2.1 Sample size 

3.2.2 Sampling procedure 

3.3 Data collection instruments 

3.3.1 Questionnaires

3.3.2 Interviews 

3.4 Sources of data

3.4.1 Primary data 

3.4.2 Secondary data 

3.5 Data analysis 

3.6 Ethical consideration 

3. 7 Limitations of the study 

CHAPTER FOUR 

DATA PRESENTATION, ANALYSIS AND INTERPRETATION OF FINDINGS

4.1 Introduction 

4.2 Response rate

ABSTRACT

The study sought to determine the relationship between internal control system and financial performance of few selected SACCOs in Luwero town council. To achieve the general objective it was broken into three measurable objections which included the assessing of internal control activities and its effect on financial performance of the SACCOs, studying the impact or effect of auditing activities on financial performance and lastly the influence of control environment on financial performance of the SACCOs. The study was carried out on three SACCOs and sample was 58 respondents. This was used secondary data and primary data that was acquired by the use of interviews and questionnaire. The findings revealed that the SACCOs had control environment as one of the functionality of the internal controls of the organization that greatly impacts of the financial performance of the SACCO$. It was also established that management closely monitors implementation on internal control systems. The study examined the effect of control activities on financial performance of selected SACCOs in Luwero town council. The result also revealed that it is impossible of the member of staff to have access to all valuable information without the consent of senior staff. The statistical results from the regression analysis show that there is a possible relationship between auditing and financial performance (r= 6.265). It was concluded that there is a positive relationship between internal controls and financial performance. This indicated that the proper or efficient or improvement in the internal controls will automatically lead to improved financial performance. The limitation of the study included members were not informed more about the internal control and this called for more explanation. This took amount of time.