| dc.description.abstract | Internal control serves many important purposes. There are increasing calls for better internal control
systems and report cards on them. Internal control is looked upon more and more as a solution to a
variety of potential problems that touches on the effectiveness and efficiency of an organization.
The financial reporting and corporate governance arenas have been in an uproar. Some external
actions through the Nairobi Stock Exchange as well as professional association e.g. ICPAK and
regulatory bodies e.g. Capital Market Authority (CMA) and Central bank of Kenya (CBK) are
attempting to regain trust and stability in the financial markets. One of the strongest means to monitor
financial reporting, ethics, and governance is implementing a strong internal control system. Internal
control can ensure the reliability of financial reporting and compliance with laws and regulations.
However, an internal control system, no matter how well conceived and operated, can provide only
reasonable--not absolute--assurance to management and the board regarding achievement of an
entity's objectives.
This research is a study of internal control system in the public and private sector. The main objective
of the study is to find out the practice in regard to design and implementation of internal control
systems in the private and the public sector and whether there is any difference in effectiveness and
efficiency as the result. The research focused on the key components of internal control systems
namely control environment, risk assessment, control procedures, information and communication and
finally monitoring. The study explored the designs of the respective sectors to find out if their
similarities and difference.
Data of this study was collected by questionnaires and focused group discussion. The data collected
was analyzed by use of descriptive and inferential statistics. Frequency tables and graphs were used to
present the results of this study.
The results of this study showed that the private sector compared to the public sector has a strong
internal control system than the public sector in all the component of internal control However the
public sector and private sector do not have a significant difference in monitoring and control
activities and the public sector even has stronger elements of preventive controls.
Thus Public sector should enhance the design of internal control in control environment, risk
assessment, monitoring and information control components while the private sector should enhance
design of control activities | en |
