Abstract
The overall objective of this study was to establish the effects of internal controls on the financial performance of Asiacell as a telecommunication company in Kurdistan Region of Iraq. This was achieved by looking at the effect of control environment, risk assessment, information and communication, control activities and monitoring on the return on asset of the selected company. The study used both primary and secondary techniques to collect the data. In the model, the dependent variable is financial performance while the independent variables are the components of internal controls. After analyzing the audited financial statements and filling the questioners by the employees of the selected company, the findings of the study showed that there is a significant relationship between internal controls and financial performance. The dependent and the independent variables in the study indicated a relationship with control environment, risk assessment. Information and communication and control activities illustrated a positive relationship with the financial performance while monitoring showed a negative relationship with financial performance. The study also found that, Asiacell had invested on effective internal control systems, thus, it had a better financial performance as compared to the related firms that had a weak internal control system. The study further recommends that the governing body, possibly supported by the audit committee, should ensure that the internal control system is periodically monitored and evaluated by the respective managers.
Highlights
Not just have the complexities of the business procedures added to this improvement, the expanded size of specialty units, which have energized the selection of techniques is helpful to expand the productivity of business because it goes against errors and frauds (Cunningham, 2004; COSO 1985; COSO 1992 and Asiligwa, 2017)
The findings show that the independent variables contributed to 66.9% of the variation in financial performance as explained by adjusted R2 of 0.660% while 33.1% is explained by other variables outside the model and the error term
The main objective of the research was to determine the relationships between internal controls and the financial performance of Asiacell as a telecommunication company in Kurdistan Region
Summary
Internal controls are strategies set by the companies to ensure the integrity of financial and accounting information, meet operational and productivity targets, and transmit administration arrangements all through the association (Shokoohi et al, 2015; Channar et al, 2015; Ngari, 2017; Eniola & Akinselure, 2016; Asiligwa, 2017; Hamed, 2009 and Bett & Memba, 2017). It sets the substance of destinations and has generally speaking obligation over the internal control systems (Cunningham, 2004). The data acquired from a sound inward control framework as reflected from monetary articulations will give a provide details regarding a firm’s money related execution (Hayes et al, 2005). In this essence, internal control systems are very instrumental in achieving the firm’s set mission and objectives. M. & Abdulai, S. (2015), Assessing Internal Financial Controls of the Lands
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