Impact of Internal Control Over Accounting Fraud in Public Enterprises in Addis Ababa
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Date
2011-06
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Addis Ababa University
Abstract
This study was conducted on impacts of internal control over accounting frauds in public
enterprises in Addis Ababa. In general the paper uses sequential mixed methodology. Data are
collected by using a self-administered survey which has both open ended and closed ended
question. The questionnaire was given to both auditors and accountant who are found at
different level. After feeding(inserting) the collected data in to SPSS for analyzing purpose; the
researcher found that some of the company’s internal controls are strong enough so that the
possibility of accounting frauds which expected to happen is very low as compared to those
surveyed public enterprises which are characterized by weak internal control. In general the
reasons which plays a greater role in motivating and pushing peoples to commit accounting
frauds includes personal finance al losses, living beyond once means, Lack of internal controls
that prevent or detect fraud, ignorance and incapacity, and lack of an audit trial. The types of
accounting frauds that is committed in the public enterprises are depend on the nature of the
activity they undertakes and includes violating principles, manipulating of sales, manipulating
of stocks(inventories), and manipulating revenues and expenses. Finally respondents agree that
even if internal control is the best weapon to overcome accounting fraud related problems; it has
to be supplemented by other issues like setting a code of conduct, training employees and consult
about the ethical issues.
Key words: Accounting frauds, Fraud triangle, Internal control
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Keywords
Accounting frauds, Fraud triangle, Internal control