INFLUENCE OF INTERNAL CONTROLS ON FINANCIAL PERFROMANCE OF DAIRY COOPERATIVE SOCIETIES IN MERU COUNTY, KENYA
Keywords:Internal Control, Financial Performance, Control Environment, Control Activities, Monitoring, Information and Communication
Internal control systems have been a challenge to the performance of Dairy Cooperative Societies in Kenya. Incidences of total disregard to rules and procedures, adherence to cooperative management regulations have been on the rise. The ability of the management to adhere to the internal controls systems is of importance and it’s bound to affect the financial performance of the societies. The purpose of this study was to determine influence of internal control on financial performance of Dairy Cooperative Societies. The study was restricted to Dairy Cooperative Societies licensed to operate in Meru County. . The study adopted a descriptive research design and made use of purposive sampling to generate a sample of 72 respondents. A questionnaire was utilized to collect data from the respondents. Data was analyzed and evaluated through the use of descriptive statistics; standard deviation, mean and percentages, and made use of ordinary linear regression models to generate the size of effects of independent variables on the dependent variable. Analyzed data was presented in tables and pie charts. The response rate of the administered questionnaires stood at 88.88%. This response rate was found to be sufficient for inferential statistical analysis. The coefficient of determination indicated that internal control contributed 65.7% of the variation in financial performance as explained by coefficient of determination which stood at 0.657. The p-value and regression coefficient internal control generated after running the regression model was (β= 0.232, p = 0.026). These results indicate that internal controls positively and significantly influenced the financial performance of Dairy Cooperative Societies in Meru County. This study therefore, recommends the implementation of internal control mechanisms in all Dairy Cooperative Societies in Meru County.
Anania, P., & Gikuri, A. (2015). SACCOs and members expectations: Factors affecting Sacco’s capacity to meet member’s expectations. Paper Submitted to the Cooperative Research Workshop Held on 24th March 2015, Moshi, Tanzania.
Aralik, B., Unkuyu, G., & Altintas, T. (2017). Exploring the effects of business performance on small and micro enterprises to establish an internal control committee: A binary logistic model. Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi, circli 39 (2), 473-486
Cooper, D. R., & Schindler, P. S. (2013). Business Research Methods. New York, McGraw-Hill
Hussein, U., & Muhammed, U. (2018). The effect of internal control and performance of commercial banks in Nigeria. International Journal of Management Research & Review, Vol. 8 (6), 13-32
Kiyieka, E., & Muturi, W. (2018). Effect of internal controls on financial performance of deposit taking savings and credit cooperative societies in Kisii County, Kenya. International Journal of Social Sciences & Information Technology, Vol. IV(X), 30-40.
Kyazze, L., Nkote, Isaac, N & Wakaisuka-Isingoma, J. (2017). Cooperative governance and social performance of cooperative societies, Cogent Business & Management, Vol. 4(1), 1-14
Mbaka, M. (2018). Effects of internal control systems on financial performance of SACCOs in Nyeri Central Sub County, Kenya. An Unpublished MBA Thesis Submitted to School of Business Management and Economics, Dedan Kimathi University of Technology.
Mohan, A., & Chandramohan, S. (2018). Impact of corporate governance on firm performance: empirical evidence from India. IMPACT: International Journal of Research in Humanities, Arts and Literature (IMPACT: IJRHAL) ISSN (P), 2347-4564.
Mugenda & Mugenda (2008) Building theories from case study research. Academy of Management Review, 14(4): 532-550.
Mwangi, E. (2015). Factors influencing performance of SACCOs in Kenya. A case of UNAITAS SACCO. An Unpublished MBA Research Project Submitted to Management University of Africa.
Subramanian, S. (2018). Stewardship Theory of Corporate Governance and Value System: The Case of a Family-owned Business Group in India. Indian Journal of Corporate Governance, 11(1), 88–102. https://doi.org/10.1177/0974686218776026
Waithaka, M. (2013). Factors that influence the social performance of microfinance institutions in Kenya (Doctorof Philosophy in Entrepreneurship). Jomo Kenyatta University of Agriculture and Technology, Nairobi.
Wangeci, C. & Muturi, W. (2017). The effects of internal control systems on the performance of SACCOs in Kenya. A case study of SACCOs in Kisii County. International Journal of Social Sciences & Information Technology, Vol. 3 (2), 1862 - 1869.
How to Cite
Copyright (c) 2021 Emmanuel Nyaga, Dr.Lucy Kiganane, Dr.Moses Gweyi
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors wishing to include figures, tables, or text passages that have already been published elsewhere are required to obtain permission from the copyright owner(s) for both the print and online format and to include evidence that such permission has been granted when submitting their papers. Any material received without such evidence will be assumed to originate from the authors.