A Research Report Submitted to Mzumbe University – Mbeya Campus College in Part of Partial Fulfilment for the Award of Bachelor Degree of Accountancy and Finance in Business Sector (BAF-BS) of Mzumbe University
Internal controls were designed with the aim of adhering to an organization’s objectives with regard to reliability of financial reporting, effectiveness and efficiency of operations, and compliance with applicable laws and regulations. However, with the increase of several cases of embezzlement of funds and occurrence of errors in the financial statements, the confidence in effectiveness of internal control systems operations has been low. Having seen this, the researcher embarked herself in this study, so as to assess the internal control systems in the prevention of frauds and errors in financial reporting.
The researcher used the case study research, taking the Tanzania Revenue Authority-Customs and Excise HQ as the case under concern. Data were collected through both primary and secondary methods, being through the use of the questionnaires, observation, interviews and the documentary reviews respectively. Using judgmental sampling technique, questionnaires were strategically distributed to a sample of twenty-four respondents’ regards to both genders. Data analysis was done with help of excel package and presentation was done in terms of frequencies and percentage in the form of figures and tables. The findings revealed that the internal control systems at the Tanzania Revenue Authority-C&E Department are known and implemented by the employees together with the management. Also, the findings revealed that the management is taking part in ensuring effective internal controls and operations through checkups done with the internal audit department to ensure prevention of frauds and errors incidences.
The research concluded that the case of prevention of frauds and errors in financial reporting should be the responsibility of all members of the organization, since the controls cannot independently wipe out all the frauds and errors incidences. It is recommended that both members of the organization should be accountable in ensuring effective controls and also the internal audit department should perform regular checkups to ensure minimization of frauds and errors incidences.