Académique Documents
Professionnel Documents
Culture Documents
Research Study
Development of Finance Process Control Tools in order to facilitate and assist finance
practitioner in there day to day Financial Transactions, a case study of Denmark.
VDX
[Pick the date]
Abstract
Control activity has effects on the financial management in Denmark and this study has
been seeks to recognize these effects. The design chosen was descriptive where 30
number of staff regarding administration, finance and accounting in the Denmark's
governmental departments. The sample for the study was targeted and consensus
survey was conducted and for collection of data questionnaire was used. for data
analysis inferential and descriptive statistics were used in this study and the findings
were presented in tables and figures which captured both inferential and descriptive
results. The conclusion of this study was that public sector in Denmark has effective
control system having characteristics of clear separation of roles and management's
commitment. Because of not extension of internal audit to all department which resulted
as the weak implementation of financial controls. The prudential use of financial
resources in in Denmark is inappropriate though there is improved use of assets and
classification of expenditures and revenue which is also concluded in this study.
Conclusion of this study is that there is a strong relationship between financial
management and control activities. Recommendation of this study is that staff profiling
must be developed and information system must be established together with the
generation of finances to improve the government department's operations.
Contents
Abstract...................................................................................................................... 2
Chapter One: Introduction............................................................................................... 5
1.1. Topic Introduction.............................................................................................................. 5
1.2. Significance of the Study..................................................................................................7
1.3. Research Aims and Objectives.........................................................................................7
1.4. Research Questions......................................................................................................... 8
1.5. Statement of the Problem.................................................................................................8
1.6. Structure........................................................................................................................... 9
Chapter 2: Literature Review......................................................................................... 10
2.1. Corporate Governance...................................................................................................10
2.2. Corporate governance mechanisms monitoring role.......................................................11
2.3. Theoretical Review.........................................................................................................12
2.3.1. The Agency Theory....................................................................................... 12
2.3.2. Theory of Financial Control..........................................................................................14
2.4. Empirical Review............................................................................................................ 15
2.5. Financial Management....................................................................................................17
2.6. Internal audit effectiveness.............................................................................................18
Chapter Three: Methods........................................................................................... 22
3.1. Research Design............................................................................................................ 22
3.2. Target Population............................................................................................................ 22
3.3. Sample Size....................................................................................................................22
3.4. Data collection and Analysis tool.....................................................................................22
3.5. Reliability and Validity.....................................................................................................23
Chapter Four: Data presentation.............................................................................. 24
4.1. Analysis and Empirical Findings......................................................................................24
4.1.1. Effects of Financial Controls.....................................................................24
4.1.2. Descriptive Statistics on Control Activities.........................................................24
Chapter Five: Interpretation and Discussion.....................................................................28
5.1. Financial Management in organizations in Denmark.......................................................28
5.2. Relationship between Control Activities and Financial Management...............................29
financial management of company is to raise funds and efficient use of this fund for the
operation of company (Warren, 2005).careful plan is prepared by the financial
management of company in order to achieve efficient utilization of resources available
for company. The efficient financial management of company ensures that the main
objective of company is taking into account in establishment of financial decisions.
There is a proper planning for the spending of all the finance available for company
(Pride et al., 2002). It has been observed that the government of developing countries is
unable to establish effective financial control system. The notable weakness in financial
control system of developing countries is generally consider as important factor which
bring exploitation of financial dishonesty and public resources in these countries (ElNafbi, 2008).
1.2. Significance of the Study
Various researches have been made about the financial controls and their finding could
help in identifying the gaps in the financial control systems in the organizations.
Moreover these findings may also help in guiding how to deal with such gaps. There
could be valuable benefits of such findings to the management of the organization and
to others who charged with the organization governance as they have to update
themselves with the financial control systems. Eventually these results will help in
improving the performance of the financial management and achieving the objectives of
the organization. The organization's knowledge regarding the financial management
and the financial control may also increase with the help of these researches and this
knowledge may help also help policy makers in making the strategic planning. This
knowledge is also useful to all the academicians in accounting and financial
management.
1.3. Research Aims and Objectives
Several financial transactions processed on daily basis and these transactions should
comply with Financial Rules and Regulation and remain consistent with established
accounting policies. Finance Process Control Tool can help in providing clear and simple
instructions, guidelines to assist finance colleagues to carry out these transactions in
standard way. The aim of this research study is to evaluate financial processes and
develop Finance Process Control Tools, which will assist in accomplishing financial
transactions in compliance with existing rules, regulations and standards. While the
objective of this research study is to:
Understand and recognize the importance of Financial Processes and its controls
transactions
Assess the level at which control activities influence the financial management in
an organization
Examine the financial processing control tool how it assists the finance
practitioner
What are the factors of risk mainly influence the daily financial transactions
1.6. Structure
The first chapter of this research study is primarily based on the introduction and
background of the chosen topic in which research objectives, research questions and
significance of research has been presented. In second chapter literature review has
considered in which different aspects such as agency theory, corporate code and theory
of financial control were discussed. In addition to this, data from previous research has
been gathered and used to critically analyze. Methodology that will adopted for the
research have been discussed in third section of this research study along with sources
of data for the collection of information on the basis of sample also considered in this
section. Data analysis has been undertaken in fourth section of the study by linking the
literature with conceptual framework. All the finding concluded in the last section of this
research study along with suitable recommendation.
more attention on stakeholder theory as he stated that along with the maximization of
shareholders wealth, environmental and social issues are also has importance for the
business firm. Stakeholder theory reveals that the companys operation has great
impact on its internal and external stakeholders that include government, suppliers,
employees and customers. According to Freeman, (1984) the group of people that
affect or to be affected from the operation of the firm are stakeholder. In this context it is
the reasonability of the company to carry out those actions that must beneficial for the
society.
The existing research study determines the role of board of directors and audit
committee of the company and how these effect of FRQ such as EM. In respect to this
research study corporate governance is considered as monitoring system that control
and direct the business activity and ensure the return on corporate finance provider.
Agency theory articulated this viewpoint properly. The primary concern of the recent
study is FRQ instead of recognizing the effect of business firm on the social and
environmental factors; therefore the aim of this study seems to deviate from stakeholder
theory.
2.2. Corporate governance mechanisms monitoring role
Board of Directors (BOD) has the supreme authority in the business firms and this
authority allow them to take all the major decision of the business. Along with they had
the power to compensate the decisions that are made by the strategic management
member of the organization, (Fama and Jensen 1983). In order to make sure the
efficient monitoring function he suggested that initiation and implementation of business
decision ought to be separated from the monitoring and ratification of business decision.
The appointment of non executive directors who are the independent member of
management that aids the organization to make sure the effective monitoring function.
However, the appointments of non executive director are the stakeholder-oriented and
they provide the impartial assessment and evaluate/examine the practices and policies
that are made by the top management of the company (Vance 1983). Fama & Jensen,
(1983) stated that the non-executive director has great importance for the company as
they has great knowledge, about market, corporate law, technology by using these
attributes they can resolve the conflicts that may happen among the companys
management. It has recognized those non-executive directors are better at monitoring
management.
The appointment of non executive directors at top position is contradict to stewardship
theory principal as this theory reveals that the manager of the business firm as a
steward and they always try to work for the best interest of the organization (Donaldson
& Davis, 1991 and Davis et al., 1997). According to Davis & Donaldson, (1991) the
management member of the company are inspired through non-financial motivation that
encourage them to improve their productivity that led the organization to compete the
market competition. The manager always try to improve their level of performance and
interested to do a good job, to emerge as good steward and wish to be major asset of
the company (Donaldson and Davis 1991). In order to enhance the productivity level of
the manager an organization need to follow the empowering structure (Donaldson and
Davis 1991). Being a part of top management the manager are supposed to be give
clear instruction and power of authority this would allow and encourage the manager to
put their full efforts so as to attain the strategic objective of the organization. In respect
to the shareholders viewpoint they are more concerned to the executive director
instead non-executive director. Muth & Donaldson, (1998), the major reason behind this
attraction is that the executive director has good knowledge of existing condition and
they presume much reasonable for the organizations success. Hence, it has been
figure out that shareholders perceive that executive director can provide more return as
they are more expertise and has great knowledge as compare to non-executive director.
2.3. Theoretical Review
The effects of the financial control in the public sector can be analyzed with the with the
help of two theories one is agency theory and the other one is financial control, these
two theories will help in explaining the relationship between the financial management
and the financial control.
2.3.1. The Agency Theory
The agency theory explains that firms are the necessary structures to maintain the
contracts and control can also be exercised through firms and the as a result the
opportunistic behavior of agents can also be minimized. Agency theory also helps in
recognizing the incomplete information about the relationship, performance of the agent
and interest
There are two ways in which adverse selection and the moral hazard can affect the
output of the agent: one is that the agent is not performing the assigned task which is
his duty and the and secondly he is not possessing that knowledge or information which
is he is supposed to have. This will have negative impact on the overall performance of
the relationship along with the principal benefits in the cash residual form.
There are other reviews which include The Sarbanes-Oxley Act of 2002 (SOX) in which
companies are required to make reports on the internal control system so that
effectiveness can be checked over the financial reporting so that fraud could be reduced
and the financial statements show integrity (Morris, 2011)
Financial control is used to assess the agency problems and this is one of the many
mechanisms while others are budgeting, audit committees, financial reporting and
external audits. It has been shown by the studies that even sox has not required about
the report about the internal control still there would be benefits of implementing internal
control system as it will reduce the agency cost and there would be economic incentives
to report on the internal control. When information will be provided to the principals
(shareholders) about the behavior of the agent which will be the management then it will
result in reducing the information symmetry, cost of equity capital and will reduce the
risk of the investors. There is also a link between the internal control system and the
level of earnings management. If the internal control system is weak that it will affect the
level of the earnings management (Chan et al., 2008; Ashbaugh et al., 2008).
The agency theory has the problem of earning management due to which the sox
legislation get motivated the in the first time particularly earning manipulation by the by
Enron, WorldCom. Due to financial controls the agency problems are becoming modern
in the corporations for many years. In the period of 1980s many audit controls were
failed due to which a (COSO) was formed and the main aim of this committee is to
extract the information about the effectiveness of internal control system. (Simmons
1997). It has recognized that the controls are more effective if it would design in
accordance to infrastructure of the entity (COSO, 1992) and the controls which are built
or formed by states are formed on the basis of quality and empowerment initiatives,
unnecessary cost is eliminated and make them more flexible to the changing
environment so that quick response could be made.
According to the section 404 of the Act it is necessary for companies to made a report
on companies internal control on the financial management and include this in the
annual report along with the attestation report that would be issued by the registered
accounting public firm. According to Morris financial controls can be described as the
controls that are general controls differentiated from those that are specific. He believes
that if the management is trying to manage the control earnings by overriding control
features and this would create more weaknesses in the financial controls in relation to
the general controls in spite the effectiveness of the specific controls.
2.3.2. Theory of Financial Control
This is the area of more concern so this type of carelessness should be uncovered
during the audit process as it has been mentioned in audit standard 5 that reveals that
internal control means the control over business management. While another concept is
that if the general controls are implemented and working effectively then there would be
chances that internal control weaknesses could be reduced in relation to the general
controls. Established objectives of the organization could be achieved by incorporating
the internal controls in the policies, regulation and the rules so indirectly internal controls
help the organization in meeting the objectives.
The theory of financial control reveals that entire future and present function personnel
are declared for the constitution of the fundamental point of reference. This theory
comprises that all the possible and the existing tools of the entity are very important. It is
also stated that all the financial instruments, payments, control models, related
considerations and the economic calculations all these factors with in outside the
organization should be discussed in relation to the inner characteristics.
As per the financial control viewpoint it is imperative to maintain the good relationship
among the different activities and the financial processes (Ostman, 2009). The
organizations are reviewed from the several areas so the theory of the financial controls
places a natural focus. Output is the first regard while the second is about the activities
of the organization and the structure of the organization and the transactions between
the various parties. The procedures and the methods that are used to relate the present
and the future functions for both internal and the external resources are covered in the
third area. In the fourth area the illustrations of the specific processes of the individual
organizations are made. According to Ostman (2009) structure and the financial control
systems work together.
2.4. Empirical Review
Companys management formulates the policies and strategies in regard to establish
the strict financial control that allow the company to achieve its management objectives.
As proper financial control demonstrate that the company set up the proper mechanism
to maintain accounting record that is an important element of decision making process.
Effective Policies and strategies that are made by the management leads towards the
effective decision making however, management must have to provide the information
of its policies and strategies to all the stakeholder of the company. As per (SAS, 2002)
polices and standards provide a path to carried out business operation in systemic way.
According to Crawford (2000), policies and strategies aid the company to develop
effective internal control.
Control activities are concerned with the segregation of job duties, authorization,
reconciliations and record keeping safeguarding (Jajo, 2005). In contrast Hubbard,
(2003) stated that with regard to develop and maintain the proper control there is need
to acquire the required information and knowledge. There are some frameworks listed
out by (COSO) and an entity can maintain the control activities by using these
frameworks such as systems assurance and control, control objective for (IT), total
quality management (TQM) and system development life cycle. Warren (2003) stated
that control activities deals with couple of components in which the first element is policy
which means what ought to be done and the second element is procedure to influence
the policy. The major reason behind the economic failure of developing nation is the
inappropriate government financial policies and control (Gwilliam and El-Nafabi, 2002).
In effective policies and inappropriate control leads towards financial corruption, and
misappropriation of public resources in developing countries. Ineffective auditing and
accounting system had found in some African countries due to unqualified accountants
and auditors, which mean there was no proper internal control and internal check that
has led towards the financial embezzlements, fraud and corruption. However, public
sector of Nigerias is not following policies adequately. Efficiency and effectiveness of
government ministrys internal control can be assessed by taking in to account the case
Benue State ministry of finance. In order to avoid from financial recklessness it has
been recognized that Benue State ministry of finance prepare annual budget promptly
and align its expenditure with its revenue.
A recommendation about the slack was made that ministry of finance should follow the
procedures and the principles strictly so that slacks could be built into the budget. When
the role of the public sector audit and the financial control system were studied by to ElNafabi (2009) it was found that audit and the control system are the vital systems that
provide assurance about the accountability of the in using the funds of the public and
protecting the limited public resources of the public sector against corruption.
It has been concluded after the broad research that the main factor that support the
corruption sudan are the deficiencies in the accounting system and inefficiencies in the
financial control system. According to Alin et al. (2006), there is need of designing the
systems and the procedures according to the structure of the organization so that
financial control could be implemented effectively, like there should be financial control
and accountability in the public sector organizations. It is very important for the
implementation of the effective internal control system that the staff and the
stakeholders of the organization should participate in the budgeting process (Vincent &
Emil, 2000).
Koitaba, (2013) have also conducted the research on financial control and extract the
factors that influencing financial control practices in (CB0s) community based
organization in Baringo County. However, his research has recognized that there were
number of CBOs in the country that were audited their accounts annually. The study
recommended that the country must have to ensure to conduct the audit their account
once in a year. In addition to the making strict financial control the study also
recommended that CBOs need to follow the accounting and reporting standard for
maintain the accounting record this practice would lead the CBOs to a common and
acceptable platform.
2.5. Financial Management
Padilla et al (2012) has made a research on the financial sustainability for the nonprofit
organizations and the effective financial management practices that are important in
improving the efficiency, accuracy and accountability which makes the organizations in
meeting the objectives. Financial management has been defined by Hendrickse (2008)
that it is an act of keeping the records of all the financial information and these records
should be accurate and creating a connection between the strategic plans of the firm
with the operational plans. Further it is the requirement of the financial management that
all the financial accounts prepared by the financial managers should be compared
against the company's success and the budget so that a decision could be made about
the future. Financial management also emphasis that internal control system should be
implemented in the organization so that the assets of the organization could be
safeguarded and risk could be managed. There would be need of the audit committee
or the auditors that will provide assurance about the reliability and the quality of the
financial information. . El-Nafabi (2009) wanted to maintain the role of the public sector
audit and the financial control systems for the purpose of safeguarding the funds. He
declared the factors that become the causes of financial corruption in public sector.
Further e made a declaration that in the public sector internal check and the financial
control systems are considered ineffective and weak.
But this mostly depends on the occasion that mostly when there is shortage of the
qualified staff, accountant are not trained and just one or two employees of the
organization conduct all the financial activities. In the most government departments
there is no system of the internal auditing which is very important component of the
internal control system (Chioccola & Muhlstein, 2005). It is also declared that in the
most public organizations there are weaknesses in the accounting systems.
2.6. Internal audit effectiveness
Different researches have defined effectiveness in different ways like it has been
defined by Azzone and Arena (2009) as "an ability of the organization to achieve the
desired outcomes in consistency with the objectives or targets set". While Dittenhofer
(2001) defined it another way that it is the ability of moving towards meeting the goals. A
program can be said to be effective if its results are said to be in accordance with the
objectives made (Mihret et al, 2010 and Ahmad et al, 2009). So according to the above
definitions internal audit effectiveness means that internal auditors are capable of
attaining the required objectives which are established. The management of the
organizations set the objective of the organization and then according to that objectives
the internal audit targets are set(Pungas, 2003) and the level of the internal audit
effectiveness will also change in relation to the organization levels (Al-Twaijry et al.,
2003). So the internal audit should be made such that they could achieve the objective
of the organization. There are some factors which will help in determining the effective
functioning of the internal audit operations and these factors are: identification of the
main objective of the organization, set the targets that internal audit has to set and
establish measures that whether the defined objective are met or not
(Aguolu, 2009;
Dittenhofer, 2001) while on the other hand it has been argued that by Cassandra et at
(2008) that there are three basic conditions that must be satisfied for the purpose of
meeting the internal audit objectives which are organization status, objectivity and the
independence and according to the (Feizizadeh, 2012) there are four items that must be
considered for making the internal audit function more effective and these are: achieve
best to his abilities, performance measure, goes along with the stake holder needs and
complies with relevant professional standards. Another concept was presented by the
Beckmerhagen et al (2004) as he was not satisfied with the criteria already set for the
measuring the effectiveness of the audit plans as he considers that it is more important
that effectiveness should be measured by the suitability and the quality of the plans,
follow up and the execution. If any internal auditor is not working effectively then
shareholders have the right that they can remove that auditor (Dhamankar &
Khandewale, 2003). There are some reasons due to which the internal control does not
work effectively and those weaknesses are: the management controls are ineffective,
some organizations have failed in defining the objectives clearly and top management
support is not adequate (Ahmad et al, 2009; Unegbu & Kida, 2011, Dittenhofer 2001).
So the negative effects of the ineffective implication of the internal audit are that they do
not comply with the internal audit procedures and policies, ineffective financial decisions
for the successful operations (Kida &Unegbu, 2011).
The financial and operating information would be evaluated with the help of the
effective internal control system so that recommendations could be made for
improvements (New Delhi, 2006 and Mihret & Yismaw, 2007;). This means, if internal
organizations work properly will lead to the effective internal control systems. There
should be consistency in the audit work documentation, reporting quality and
suggestions should be implemented properly (Mihret & Yismaw, 2007) will also ensure
that internal control are working effectively. If the organization has effective internal
control system than it will help the organization to achieve the performance and the
profitability level and helps the company in preventing the loss in revenue (Vijayakumar
& Nagaraja, 2012).
Various researches has been conducted by Cohen & Sayag (2010); Arena & Azzone
(2009), Ahmad et al. (2009), and Feizizadeh (2012) on the effectiveness of internal
audit. As per the study of Ahmad et al. (2009) that effectiveness of the internal audit is
mainly concerned with the efficiency of audit staff which is mainly recognized as the
prime contributor in the internal control effectiveness.
Theofanis, et al (2011) examined the relationship among the effectiveness of internal
audit and effective internal control system and it has been recognized that that there is a
positive relationship between them. In this study 52 Hotels of Greek were used as
sample and data was collected by the mail survey but they further suggested that if
these studies carried out in future with the large sample then the result would be better
than their own. Another study was done by Feizizadeh (2012) and he provided guidance
about making the internal control system more strong. This study is further extended by
examining it at the local government level. Effective internal control system: It has been
discovered by Glance (2006) that effective and strong internal control enable the
business firm to achieve their objective and targets (Unegbu & Kida, 2011) specified
that" it is the responsibility of the local government to provide a sound internal control
system which would help in achieving the internal control objectives". More over internal
control system also guides the organization how to meet the objectives (Baltaci &
Yilmaz, 2006; Amudo & Inanga, 2009; Jokipii 2010). It is very important for the
organization to insure that the assets are safe guarded and their financial and non
financial records reliable and in compliance with the stated procedures and the policies
for the objective of the organization. the legislator of the government must have to
assure the internal control systems are established properly so that they could further
help the internal audit towards achieving the established objectives.
Local government is responsible in ensuring the effective implementation of the internal
control system so that they could further help the internal audit leading towards
achieving the objectives. Organizations that have ineffective internal control system
experience more management errors in the operations as compare to those
organizations who implement effective control systems (Feng, Li & McVay, 2009). So
the management should be more conscious in the effective implementation of the
internal controls.
The management of the company is responsible to develop and effective internal
control system that assure the strict control over all activities of the business (Changchit
et al, 2001). The most significant drivers of earnings quality are the effective internal
control system (Church & Schneider, 2008). Effective internal control system is very
important in the success of the organization (Jokipii, 2010) and they also improve the
effectiveness of internal auditors at local government.
For the good governance it is very important that internal control system, organization
commitment and the internal audit functioning should be effective and their
effectiveness should be further improved by the government ministers and the agencies
(Eko & Hariyanto, 2011) and such systems can further guide the management in
achieving the objectives or identifying the problems that restrict the success of the
organization (Jokipii, 2010; Verdina, 2011 Changchit et al, 2001; Chanthinok, 2011;
Nilniyom & Vijayakumar & Nagaraja, 2012;). Therefore, Baltaci and Yilmaz (2006) found
that audit practices and the internal control system in the local government have
received little or no attention.
If the internal control system is not effective at the local government level then it would
become difficult to identify and control the misconduct that is the reason that
implementation and the maintenance of the such effective internal control will provide
surety that all the rules and regulations have
should concentrate not only on implementation but also focus in the improving in the
effectiveness of the control system so that the internal audit would be enhanced.
Internal control system refers to the proper protection of the companys assets, proper
authorization of the expenditure and revenue, proper utilizations of the councils
resources, removal of any misconduct in the finance and proper monitoring of the
expenditure (Amudo & Inanga, 2009; Gundling, 2000).
It has been recognized by Baltaci and Yilmaz (2006) that internal control system of
different organization is not good level at domestic level the major countries which
internal control system are not good are China, India, Indonesia, Argentina, Philippines.
There are some other researcher including (Musa, 2012) as the searched that Nigeria
has weak system of internal control and needs improvement. Organizations need to
improve the efficiency and the effectiveness of the internal controls system (Nilniyom &
Chanthinok, 2011). It has been found by Vijayakumar and Nagaraja (2012) that
effectiveness of the internal control should be ensured by the government bodies
because it is one of those factors that play a vital role in achieving the organization
objectives and leading to the successful operation of the company. According to
Candreva (2006), having the internal control system is not just enough unless they are
working effectively.
organizations of Denmark. The data will be collected by visiting the organizations and
with conduction of interview; all the aspects of financial management will be
overviewed. The required information will also be collected by inferential analysis by
linking through Pearsons correlation analysis in order to evaluate the policies of
organizations in Denmark for financial activities and management of financial aspects.
The main objective of this study will be to evaluate the effects of financial controls in
organizations in Denmark country. this part of the research will be based on findings of
the research based on objective of the research, which are to Understand and
recognize the importance of Financial Processes and its controls considered by Finance
practitioner in Denmark, to Assess the level at which control activities influence the
financial management in an organization. The findings will be presented on the basis of
descriptive and inferential statistics.
4.1.2. Descriptive Statistics on Control Activities
As described above that main objective of the study is to evaluate the financial
processes and financial control activities for the financial management purposes in
organizations of Denmark. For the calculation of standard deviation and mean,
descriptive statistics were used. The result shows in the following table:
Table 1: Mean and standard deviation of control activities
Control Activities
N
Max.
Min.
Corrective action taken to address
weakness
30
1
5
Employees' work is checked by others
30
1
5
There are clear separation of roles
30
1
5
Appropriate supervision by senior staff
30
1
5
Staff trained to implement system
30
1
5
There is a well-developed chart of account 30
1
5
Security systems safeguards Assets
30
1
5
Variance reports generated with
explanations
30
1
5
No expense is incurred in excess of
budget
30
1
5
SD
Mean
1.119
0.906
1.244
0.893
0.938
1.06
1.096
3.21
3.08
3.42
3.47
3.34
3.35
2.51
1.197
2.89
0.998
3.05
All the findings shown in the above table were calculated on the basis of internal control
system of organizations in Denmark by considering the financial management aspects.
By calculating means and standard deviations, the analysis was made on the financial
Organizations of
Denmark are adopting the suggestions provided by Ray and Pany (2001), according to
them there should be clear division of financial responsibilities among the employees of
company so that all the financial transaction should not be performed by any particular
individual. Jajos (2005) also suggested some recommended findings for financial
management aspects, some of which are that there should be division in regard of
authorizations of financial transaction, recording of financial transaction, security of
companys assets and reconciling statements in organizations. According to the report
given by Hubbard (2003), organizations should have those employees and
management, which should have deep knowledge of segregation of duties among the
employees of company.
Financial checks at departmental level in Denmark: The result showing in above
table in regard of financial checks at departmental level showing that financial
practitioners in Denmark were indifferent because the mean of 3.08 in above table is
showing that financial practitioners were not interested because they were confused
about whether there was checking of work of every employees but in comparison to it ,
there was different responses are showing by 0.906 standard deviation by conduction of
interviews of financial practitioners in Denmark in regard of checking of financial work of
other employees. According to Chemengichs (2013), checking of financial work of other
employees can help to ensure accuracy and completeness of financial information so
financial practitioners in Denmark can increase the level of accuracy by keeping checks
on financial work of employees.
Supervision of activities performed by staff: The result from the table is showing
that all the financial practitioners in Denmark are at the same point that there is a proper
concerned. This might be a sign of lack of separation of obligations which might effect
on the steady quality of financial reports prescribed by Schelker (2008) and Whittington
and Pany (2001).
Expenditure control by organizations in Denmark: The outcomes proved that
financial practitioners were not certain in respect to whether controls are set up to avoid
carrying about use in abundance of fund available. This is proved by a mean figure of
3.05 which is near the normal of 3.while in this way; the deviation of 0.998 proposes
different reactions to the research from the financial practitioners point of view. The
finding could be a fail in the checking viewpoint provided by Hayes, et al (2005).
Mean
3.00
3.000
Regression
Residual
Total
Table 5: ANOVA
Sum of Squares
df
F
0.863
4 1.557
4.184
26
5.08
30
Mean square
324
208
Sig.
0.12(a)
The specialist performed ANOVA as appeared in table 4.13. The examination proved a
critical level of 0.012 which reveals that the information is perfect for making a
conclusion on the population's parameter as the value of extent (p-quality) is fewer than
5%. The determined quality was more noteworthy than the basic worth (1.299 < 1.557)
a sign that control exercises fundamentally impact cash related management in
organization of Denmark.
Organizations need to get advice from Finance Practitioners about the financial
Reference
Alin, F., de Boer, S., Freer, G., van Ginneken, L., Klaasen, W., & Mbane, J. R.,
(2006). How to build a good small NGO, Management Review, 35(1)55-64.
3, 124 144.
Arena, M. & Azzone, G. (2009). Identifying organizational drivers of internal audit
Internal control and audit at local levels. World Bank Institute Washington, D.
Baltaci, M. & Yilmaz, S. (2006). Keeping an eye on Subnational Governments:
Internal control and audit at local levels. World Bank Institute Washington, D.
Beckmerhagen, I. A., Berg, H. P., Karapetrovic, A. & Willborn, W. O. (2004). On
the effectiveness of quality management system audits. The TQM Magazine,
16(1), 14 25.
Candreva, P. J. (2006). Controlling internal controls. Public Administration
Review, 66(3), 463-465.
Chioccola, F. & Muhlstein, C. (2005). Internal Controls and the ISA Program. New
York: McGraw-Hill.
El-Nafbi, H. M. (2008). The role of public sector audit and financial control
systems in safeguarding public funds in Sudan, Journal of Economics &
Administration, 2 (1), 1-11.
Jajo, S. (2005). Internal Audit- Internal Controls Internal Audit. 275 HDL center oh
university Athens.
Appendix
Questionnaire
1. Are financial implications considered when choosing the best way of delivering
services and products or carrying out operations?
Yes
No
Yes
No
Yes
No
4. Will financial advice helpful for organizations in Denmark to carry out their
financial management responsibilities?
Yes
No
Yes
No
Yes
No
7. Are financial practitioners getting the most out of today's technology for
improving the efficiency of financial management of organizations in Denmark?
Yes
No