Abstract
This paper examined the impact of internal control on operational performance in CSM Cooperative Society. Cooperatives have become a good source of affordable finance for both low and medium income group all over the world. As critically important as cooperatives are to the growth and development of Nigeria vide the provision of funds for business and investment hence employment, they may not survive in the long term if they are not properly managed. The presence of an effective and efficient internal control system will go a long way in aiding the cooperatives to manage their operations well. The study investigated internal control impact on performance of cooperatives in Abuja. The target population was the Executive Management Committee, Senior Management, Senior and Junior staff of CSM Cooperative, Abuja, Nigeria. Survey method was employed, and questionnaires were distributed to all the categories of employees identified. Multiple-Linear Regression was used to analyze the data collected vide a 5 point Likert-scale questionnaire. The study revealed that the relationship between internal control (monitoring, control environment, control activities) and performance of cooperatives is not significant. It was recommended that cooperatives should ensure that they seek for and implement measures that increase profitability in addition to instituting a good and functioning system of internal control. The study also recommended that future research should add the two variables of internal control not covered in this research and also use a sample number of cooperatives in Abuja.
Highlights
It is a common knowledge that cooperative societies have become a major source of financing aside from the regular financial institutions
The practice of forming cooperative societies by various groups to mediate in making finances available to members, especially to those who are financially excluded is a fact that is well-known in our society [20]
Ho1: no significant relationship exists between control environment and operational performance of cooperatives
Summary
It is a common knowledge that cooperative societies have become a major source of financing aside from the regular financial institutions. The practice of forming cooperative societies by various groups to mediate in making finances available to members, especially to those who are financially excluded is a fact that is well-known in our society [20]. The importance of cooperatives in economic empowerment and poverty reduction cannot be overemphasized the need for effective management of such organizations [16]. Businesses need to deliberately institute internal control measures aimed at achieving their objective otherwise they stand the risk of being inefficient and may even go out of business. Especially in the developed world have called for firms to be more proactive in implementing a robust internal control system as a check to the excesses of business managers. The collapse of big companies like Leeman Brothers and Enron have confirmed that too big to fail is a delusion [19]
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