Effects of Internal Control Systems on Financial Performance of Sugarcane outgrowercompanies inKenya

Abstract

This study was designed to investigate the effect of internal control systems on the financial performance of sugarcane outgrower companies in Kenya.The study adopted a descriptive correlational survey design. All the sugarcane outgrower companies were studied. Both the primary and secondary data was collected. Primary data was collected from the key informants from all the nine outgrower companies in Kenya using questionnaires. Secondary data was extracted from annual reports, publications and document analysis. The key informant's method was used, hence, all the Finance Managers and heads of internal audit for every outgrower company were selected to take part in the study. The data collection instruments were administered to all the nine sugarcane outgrower institutions. The data was analysed using statistical package for social scientists (SPSS) computer software version 19.0 to generate cumulative frequencies and percentages. The study found a positive significant effect of internal control system on the financial performance (R = 0.682), and R square 0.428 thus internal control components accounts for 42,8% variance in performance The findings are expected to be of value to the sugarcane outgrower stakeholders and form a basis for improving financial performance of sugarcane outgrower companies.