Abstract:
Proper bookkeeping practices is highly dependent on the control systems
available in the organisation. Small business are enterprises that mostly do not
keep proper records of their operations. This study therefore analyse the effect
internal control system on book keeping practices of Small business in
Nsawam Municipality. The first objective of the study was to examine the
internal control system utilized by small business in Nsawam Municipality.
The second objective of the study was to examine the effect of internal control
system on bookkeeping practices of small business. The third and final
objective of the study to analyse the challenges affecting internal control
system among small business. Questionnaires were the data collection
instruments. The required sample size was chosen using the cluster sampling
technique. A sample size of 362 were considered in the study. Exploratory
Factor Analysis, Multiple regression and descriptive analysis were employed
to achieve the study’s objectives. The study found that control activities was
the system most of the small business s have employed in their operations.
The study also found that there was a significant relationship between control
environment, risk assessment, information and communication and
monitoring activities and book keeping practices. There was no significant
relationship between control activities and book keeping practices. The study
found that, inadequate policies and procedures, lack of segregation of duties,
too much politics were the challenges affecting the internal control system of
small business. The study recommends that management must be effective
and to guarantee continual and separately supervising internal control to
assess if controls are there and operates well.
