Effects of Internal Control Practices on Financial Performance of Small and Medium Enterprises in Nairobi County
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Date
2016Author
Kamau, Jacintah
Type
ThesisLanguage
en_USMetadata
Show full item recordAbstract
SMEs play a vital role in an economy of any nation more especially the developing ones.
However, SMEs are still finding it hard to survive and compete with other well established
firms despite their contribution to an economy as a whole. As such, an effective internal
control in SMEs has the potential of reducing employees’ fraud leading to success of SMEs
in achieving its objective and goals, which is creation of more profits. This study examined
effects of internal control practices on performance in financial perspective of SMEs within
the county of Nairobi. A descriptive research design was adopted in the study. Population
of this study comprised of all SMEs in Nairobi County. Using simple random sampling
technique a sample of 100 SMEs was randomly selected. Both primary data and secondary
data were utilized in the study, which was collected using self-administered questionnaires
and secondary data on performance in financial perspective of SMEs was collected from
SMEs financial reports. The results established that the control environment and risk
assessment had a negative relationship with financial performance of small and medium
enterprises. The results also revealed a positive relationship between control activities and
information and communication and monitoring and financial performance financial
performance of SMEs in Nairobi County. The study concluded that there is an inverse
relationship between financial performance of SMEs in Nairobi County and the control
environment and risk assessment. The study also concluded that there is a direct
relationship between control activities, information and communication, monitoring and
the financial performance of SMEs in Nairobi County. The study recommended that SMEs
should ensure there they have a good environment control, effective assessment of risk and
control activities and proper monitoring strategies.
Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
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