The Impact Of Internal Control On Accounting Frauds; The Case Of Government Sectors In West Shoa Zone

Abstract

This study was conducted on the impact of internal control over accounting frauds in Government sector those are found in West shoa Zone. In general the paper uses both qualitative and quantitative, or mixed research methodology. Data are collected by using a self-administered survey which has both open ended and closed ended question. The questionnaire was given to auditors, managers and accountant who are found at different level. After analyzing the collected data by ratio, and percentage; the researcher found that some of the organizations 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. The types of accounting frauds that is committed in the government organization 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.