How to Write Assumptions for a Thesis

By Nadine Smith

Conscientious writers try to avoid making unfair assumptions that stereotype or over-generalize
people or issues. At the same time, however, every argument conceals some implicit assumption
that can't be helped. For example, the argument "An umbrella provides the best defense in wet
weather" assumes that protecting one's self against rain is a desirable pursuit. Most readers will
find this sort of assumption reasonable, though. To find the assumptions in a thesis, look for the
ideas it takes for granted.

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Step 1

Locate the argument in the thesis. For example, in the claim "An umbrella provides the best
defense in wet weather," the argument is that the umbrella is the best choice, in the opinion of
the writer. You can double-check if the thesis is arguable by determining if it offers a contrary
argument. In opposition to the above argument, one could claim that umbrellas do not provide
the best defense; this confirms that it is indeed the argument.

Step 2

Find the assumption inherent in the thesis. The assumption is the starting point of the thesis, or
what it bases itself on. After taking out the argument, the assumption is what remains. After
removing the argument "An umbrella provides the best," you are left with "defense against wet
weather," which the writer assumes is a desirable thing.

Step 3

Write the assumption in the thesis in your own words: "The thesis assumes everyone would want
to stay dry in wet weather."
Identifying Assumptions and Limitations For
Your Dissertation
By William G. Wargo, Ph.D. / August 19, 2015

It is important to know just what an assumption is when it is applied to research in general and
your dissertation in particular. In the Dictionary of Statistics and Methodology, W.Paul Vogt
defines an assumption as “(a) A statement that is presumed to be true, often only temporarily or
for a specific purpose, such as building a theory; (b) The conditions under which statistical
techniques yield valid results.”
For assumptions – examples: If you are writing a qualitative dissertation, such as case study,
ethnography, grounded theory, narrative research, or phenomenology, here are some common
assumptions to consider:
1. The participants will answer the interview questions in an honest and candid manner.
2. The inclusion criteria of the sample are appropriate and therefore, assures that the participants
have all experienced the same or similar phenomenon of the study.
3. Participants have a sincere interest in participating in your research and do not any other
motives, such as getting a better grade in a course if they are college students or impressing their
job supervisor because they agreed to be in your study.
There may be other assumptions that are unique to your research design.

What are research limitations? Carol M. Roberts in her book, The Dissertation Journey offers
some examples of limitations when she states, “Limitations are usually areas over which you
have no control. Some typical limitations are sample size, methodology constraints, length of the
study, and response rate.”
For limitations – examples:
1. There may be unknown conditions or factors at the facility where the participants reside, work,
or study that could bias the responses of the participants.
2. If you are collecting data from the elderly, if is possible that some of their recollections of
events, situations, and feelings could be questionable.
3. The number of participants or subjects is enough from which to adequately draw conclusions.
In qualitative methods, you will want the numbers of participants to reach a level at which
saturation of the data is achieved – no new data or meaning units are being discovered.
I suggest you define and cite two or three sources regarding assumptions and limitations before
including the specific ones relevant to your study. You want your Chairperson to know the
literature you consulted in understanding your specific assumptions and limitations.

Suggested citation for this article:

Wargo, W.G. (2015). Identifying Assumptions and Limitations for Your Dissertation. Menifee ,
CA : Academic Information Center .
The study will help in bringing into awareness to various stake holders such as the government
and education institutions how the motivations greatly affect the employee’s level of
performance at work.
Impacts of employee training on the performance of the commmercial banks in nairobi
county

1. 1. yaIMPACTS OF EMPLOYEE TRAINING ON THE PERFORMANCE OF THE COMMMERCIAL BANKS

IN NAIROBI COUNTY By LEONARD AKURE Reg No: Dipsc 0022: DIPLOMA IN BUSINESS SCIENCE
For: DR. OTIENOA RESEARCH PROPOSAL PRESENTED TO KENYA SCHOOL OF MONETARY STUDIES
FOR AWARD OF DIPLOMA OF BUSINESS SCIENCE. DECEMBER 2011.
2. 2. DECLARATIONThis research proposal is my original work and it has not been presented for a
diploma award inany other institution.Signature:……………………………………
Date………………………………….Leonard akureReg No: Dipsc 0022This research proposal has been
submitted for examination with the approval of my supervisor:Dr. Otieno M.A: Lecturer,
Research MethodologySignature………………………………………..Date………………………………….. i
3. 3. DEDICATIONThis research proposal is dedicated to Mr. Geoffrey O. Akure and Juliet A.
Amadede. ii
4. 4. ACKNOWLEDGEMENTI would like to acknowledge my lecturer of Research Methodology and
my classmates inBusiness science at Kenya School of monetary studies level II-September-
December 2011 forthe great support and encouragement they offered. iii
5. 5. Table of
ContentsDECLARATION .....................................................................................................................
......................
iDEDICATION .....................................................................................................................................
.........
iiACKNOWLEDGEMENT .....................................................................................................................
...... iiiTable of
Contents .........................................................................................................................................
ivABSTRACT........................................................................................................................................
......... viCHAPTER
ONE ........................................................................................................................................... 1
INTRODUCTION .................................................................................................................................
... 1 BACKGROUND INFORMATION OF THE STUDY. ....................................................................... 1
1.1 STATEMENT OF THE PROBLEM .................................................................................... 1 1.2
PURPOSE OF THE STUIDY ................................................................................................ 2 1.3
OBJECTIVES OF THE STUDY ........................................................................................... 2 1.4
RESEARCH QUESTIONS OF THE STUDY ...................................................................... 3 1.5
ASSUMPTIONS OF THE STUDY ....................................................................................... 3 1.6
SIGNIFICANCE OF THE STUDY ....................................................................................... 3 1.7
LIMITATIONS OF THE STUDY ......................................................................................... 4 1.8
DELIMITATIONS OF THE STUDY ................................................................................... 4 1.9
THEIRITICAL FRAMEWORK. .......................................................................................... 4 1.10
CONCEPTIONAL FRAMEWORK. .................................................................................... 5 1.11
OPERATIONAL DIFINATIONS OF TERM. ..................................................................... 7CHAPTER
TWO .......................................................................................................................................... 8
LITERATURE REVIEW .........................................................................................................................
8 2.1
INTRODUCTION .......................................................................................................................... 8
2.2 LITERATURE REVIEW ON VARIOUS PARTS......................................................................... 8
2.2.1 LITERATURE IN KENYA ......................................................................................................... 8
 2.2.2 LITERATURE WORLDWIDE ...................................................................................................
9CHAPTER
THREE .................................................................................................................................... 10
RESEACH METHODOLOGY ..............................................................................................................
10 3.1 INTRODUCTION................................................................................................................. 10
3.2 RESEARCH DESIGN ......................................................................................................... 10 3.3
STUDY LOCATION ............................................................................................................ 10 3.4
TARGET GROUP ................................................................................................................ 10 iv
6. 6. 3.5 SAMPLING PROCEDURE AND SAMPLE SIZE ........................................................... 11 3.6
RESEARCH INTRUMENTS ............................................................................................. 11 3.7
PILOTING............................................................................................................................. 12 3.8
VALIDITY AND RELIABILITY OF RESEARCH INTRUMENT ............................... 12 3.9 DATA
COLLECTION PROCEDURES ............................................................................. 12 3.10 DATA
ANALYSIS AND PRESENTATION ......................................................................
12REFERNCES ....................................................................................................................................
..........
viiAPPEDICES .....................................................................................................................................
......... viii Appendix I: Introduction
Letter ............................................................................................................. viii Appendix II:
Questionnaire...................................................................................................................... ix v
7. 7. ABSTRACTEmployee training is as very critical factor on the performance of commercial banks
or in anyother financial institution. Commercial banks just like any other financial institutions,
accountsfor the large percentage of the world‟s lending sector hence have a critical role to
playing theeconomics of every country and the world‟s economy at large. This research study
will thereforefocus on the influence of employee training on the performance of the commercial
banks inKenya, Nairobi County in particular. Kenya as a whole has experienced banking
performancesince independence one of the major being the bank‟s failure (i.e. over 35 banks
collapsed as at1998) one of the major causes of this problem is lack of necessary skills and
knowledge byemployees in corresponding to the improving technology. This problem can be
dealt with byassessing various employee obligations at work place and the level of skills
required andthereafter improving the employee skills through training hence improving the
organizationalperformance. All the commercial banks in Nairobi County will be in the study
forming a censusstudy. The study will target key informants like the human Resource managers,
bank managersand supervisors who have operations of the banks. This study will use
questionnaires andinterview as the primary instruments of data collection vi
8. 8. CHAPTER ONE INTRODUCTIONBACKGROUND INFORMATION OF THE STUDY. An employee is
the one of the most essential resource in any other organization that is working towards
meeting its goals. Therefore the level of training and skills of an employee is very critical in the
performance of the commercial banks especially with the case of improving technology which
requires proportional improvement of employee skills in various departments in the commercial
banks (Kithinji and waweru 2010). It‟s therefore important to research on the aspects of
employee in their place of work and their impacts to the performance and development of
commercial banks. Kenya has experienced banking problems from 1980s culminating in the
major banks failure i.e. over 35 commercial banks failed as at 1997 (Kadian Wanyama and S.N
Mutsotso 2010). Poor employee performance due to inadequate skills was termed the major
cause of the problem. In such crisis of failure to a commercial bank; depositors, lenders to the
bank, and owners of the bank capital all lose confidence and seek to withdraw their resources
and property from the bank. 1.1 STATEMENT OF THE PROBLEMIn the past years there has been
 reported severe failure and collapsing of commercial banks inKenya, Nairobi County in particular
and employee performance in these banks was termed oneof the major causes of the problem
of banks failure. This is the basis of this problem of studywhich is an analysis of impacts
employee training on the performance and development of thecommercial banks in Nairobi
County (Kadian Wanyama and S.N Mutsotso 2010).Nairobi County being one of the core
economy building counties in the country, poorperformance of commercial banks in the county
affects the country‟s economy greatly since thecommercial banks play a major role in the
economy. Commercial banks play the role maincredit facility and deposit facility in the economy
therefore if they fail investor will lack sourcefor capital as well as a place to keep their
deposits.This qualitative study will therefore examine how employee training impact on the
performanceand development of commercial banks, what measures should be taken and hoe
these measuresshould be implemented to enhance performance and development of
commercial banks inNairobi county. Commercial banks in the Nairobi County will be surveyed to
determine thevarious employee levels of training in relation to impacts to the performance of
the banks.Key word: Employee training, employee productivity and performance 1
9. 9. 1.2 PURPOSE OF THE STUIDYThe purpose of this study will be basically to found out issues of
employee training and how itaffects the performance and development of commercial banks in
Nairobi County.Technological changes are very rampant in the banking industry e.g. the
introduction ofelectronic funds transfer, e-banking and mobile banking etc. This has led to the
need forimproving the employee training in the banking sector as per the improved technology
so as toprovide quality services to the banks‟ customers as well as to avoid errors that will lead
the bankto undergo losses and thereafter failing to meet its customers‟ needs. This will make
thecustomers to lose their confidence with the bank.This study will also help to provide
awareness to the banks‟ managements on the qualities ofpersonnel they should hire to provide
services to their customers and who will maintain highconfidence of the customers as well as
keep the organization profitable. 1.3 OBJECTIVES OF THE STUDYThe objectives of this study are
as follow; 1. To improve the performance of commercial banks and enhance their development
in Nairobi county. 2. To ensure quality and effective training among the personnel of the
commercial banks. 3. To enhance entrepreneurial activities among the residents of Nairobi
County through provision of quality of bank services like lending and deposits hence improving
the economy. 2
10. 10. 1.4 RESEARCH QUESTIONS OF THE STUDYThis study will seek to answer the following
research questions; 1. What measures are commercial bankers taking to ensure good
performance other than failure? 2. What measures are commercial banks to ensure their
personnel have attained therequired level of training? 3. What is the common training level
among the commercial banks employees? 4. How do technological changes affect daily activities
and performance of the commercial bankers? 5. Do commercial banks trains their personnel by
themselves of they hire already trained personnel? 6. If commercial banks hire already trained
personnel, which training institutions are the main sources of personnel for the commercial
banks? 1.5 ASSUMPTIONS OF THE STUDYThis study will assume that; 1. The various employees
of commercial banks have undergone various different levels of training. 2. Every commercial
bank experiences technological changes that require more skilled personnel in its daily activities.
3. Employee performance at various work places affects the banks performance. 4. Every
commercial bank employee must have undergone some training at his/her time of hire. 1.6
SIGNIFICANCE OF THE STUDY  The study will help in bringing into awareness to various stake
holders in banking sector how the performance and development of their organization can be
affected by the employee level of training and skills.  The study will also help the stake holders
in the banking sector to plan on how cub the problem brought by technological changes in
 relation to the need for improved employee training.  Through this study the stake holders in
the banking sector will be able to plan on how to acquire personnel with that will help achieve
their goals (well trained personnel).  The study will also help the potential commercial bank
employees on the kind of training to go for the better performance of the banks 3
11. 11. 1.7 LIMITATIONS OF THE STUDY 1) This study will cover only commercial banks in the Nairobi
County, therefore the findings will not apply to the other parts of the country where this kind of
problem exists. 2) The study will only deal with commercial banks, making its findings not
applicable to other related financial institutions that might be experiencing the same problem 3)
The study deals only with employee training, hence other factor that may have the same
impacts to the commercial banks as employee training are not looked at. 1.8 DELIMITATIONS OF
THE STUDYThe following are the delimitations associated to this study. 1) The study will not
disclose the names of the employees and their position at work because most individuals would
not like their educational and work information to be made public. 1.9 THEIRITICAL
FRAMEWORK.This study is based on the theory of “variance in thinking capacity 1859”. This
theory explainshow every individual person is born with different thinking capacity. If different
people aregiven the same task which is totally new to each of them, each of them will come up
with hisown way of performing that task unless all of them have been trained on doing it in a
particularway.This theory is relevant to this study because even the commercial bank employees
are justnormal human beings who unless trained on doing something in a particular way, they
will do itaccording to their own thinking which may cause great harm to the organization, like
failure.Various activities in banking are carried out in specific models which require well trained
andskilled person on it to perform it so as avoid errors which may in turn cause losses. 4
12. 12. 1.10 CONCEPTIONAL FRAMEWORK. COMMERCIAL BANK TRAINED EMPLOYEES FACTORS
THAT LEAD FOR NEED OF IMPROVED EMPLOYEE TRAINING e.g. Technology changes Increased
customer Improved productivity NO FURTHERFURTHERING OF etc. TRAINING OFTRAINING
FOREMPLOYEES EMPLOYEEESEMPLOYEES Decline in productivity Improved productivity
Decreased customers Increased customers Decline in profits Increased profits More developing
Failure and collapsing and profitable of commercial bank commercial bank 5
13. 13. As mentioned on the assumptions of this study, every employee hired by any commercial
bankmust have some sort of training. However in the course of operations of the bank, there
arisesome factors that will require improvement in the training of the employees. These
factorswhich form the inventing variables of the study include: Technological
improvement/changes Increased productivity Increased customer etc.When these factors arise
employees are subjected to greater obligations which require moreskills. Unless trained further,
employees will find it difficult to undertake this added obligationthus causing
underperformance. This will cause negative effects to the bank such as: Decline in productivity
Decreased customers Decline in profitsThis will in turn lead to underperformance of the bank
hence failure and collapsing of the bank.On the other if those factors arise and they are
embraced by the management of the bank throughsubjecting their employees to further
training, it would result positively to the bank i.e.; Improvement in productivity Increased
customers Increased profitsThese will then lead to improved profitability hence development of
the bank. 6
14. 14. 1.11 OPERATIONAL DIFINATIONS OF TERM.Employee training---- the amount of skill an
employee has in relation with his/her specializedjobTechnological improvement---advancement
in in equipment and ways of operations due tointroduction of new innovationsEmployee
productivity----the measure at which an employee accounts for the productivity
anddevelopment of the an organization 7
15. 15. CHAPTER TWO LITERATURE REVIEW2.1 INTRODUCTIONThe issue of employee training and
commercial banks( or any other entities associated withlabour) development is not a problem
only in Nairobi neither it‟s in Kenya only but globally.Therefore this section of this proposal
provides discussion based on the following topics; Literature in Kenya Literature worldwide2.2
LITERATURE REVIEW ON VARIOUS PARTSAs mentioned above, this will provide discussions of
literature of similar studies that had beendone specifically in Kenya and globally.2.2.1
LITERATURE IN KENYAEmployee productivity depends on the amount of time an individual is
physically present at a joband also the degree to which he/ she is “mentally present” or
efficiently functioning whilepresent at a job and the functionality of an employee at work will
depend b on his/her skills(Kadian W. Wanyama and S. N. Mutsotso). In this study to verify the
“Relationship betweencapacity building and employee productivity on performance of
commercial banks in Kenya”,it‟s evident that the major cause of the crisis of banks failure in
Kenya in the past years wasunderperformance of the employees due to minimal training
especially in department that facedfast technological changes.Another literature of this proposal
is based on the study of „Technology and service quality in thebanking industry‟ (Thomas Ogoro
Ombati, Peterson Obara Magutu, Stephen OnserioNyamwange and Richard Bitange Nyaoga).
This study states that technology change is not onlyon machinery but also on human skills. That
is for effective utilization of improved technologythere should be a well trained man power to
run it (for banking industry to effectively embracetechnology, should ensure well trained
personnel). 8
16. 16. 2.2.2 LITERATURE WORLDWIDETraining is one of the most important strategies for
organizations to help employees gain properKnowledge and skills needed to meet the
environmental challenges (Goldstein and Gilliam,1990;Rosow and Zager 1988). This derived
from the study done in Nigeria i.e. “Productivity as aDriving Force for Investment in Training and
Management Development in the BankingIndustry” (Isiaka Sulu Babaita 2010). This study
further stated that, no matter the way onelooks at training and development, they help
employees to learn how to use the resources in anapproved fashion that allows the organization
to reach its desired output. Training anddevelopment has grown concerned not only with
helping individuals to adequately fill theirpositions, but also with helping whole organizations
and sub departments grow and develop.Training and development, though primarily concerned
with people, is also concerned withtechnology, the precise way an organization does business. 9
17. 17. CHAPTER THREE RESEACH METHODOLOGY 3.1 INTRODUCTIONThis chapter presents how
this study will be conducted in terms of location, research methods,sample size, data analysis
and presentation. 3.2 RESEARCH DESIGNThis study will be guided by descriptive survey design to
establish the relationship betweenvariables especially the relationship between the
development and the average level of employeetraining on organizational
performance.Descriptive survey design is more preferable for this study because it will help to
capture andexplain the details of the relationships of various variables of the study. E.g. the level
of a bankperformance at a given average level of employee training. 3.3 STUDY LOCATION The
study will be carried out in the commercial banks across Nairobi County. All thecommercial
banks in the county will be used in the study forming a census study.One of the key objectives of
this study is to ensure better banking services to the economy thusensuring better economy.
And Nairobi County being the major economic centre in the countrywas selected as the best
location for the study. 3.4 TARGET GROUPThis study targeting the key informants like the
Human Resource managers, bank managers andsupervisors who have skills and understanding
on the operations of the commercial banks. Thistarget group understand very well the
productivity of each employee in the organization and theirvarious levels of training hence they
able to give the relation between various employees‟performance and heir level of trainingThe
 total estimated population of the study is 86 people, that is at least two officers from
eachcommercial bank in the county provided the there are 43 banks in the county. Note: only
the main branch (headquarters) of each commercial bank in the county will besurveyed. 10
18. 18. 3.5 SAMPLING PROCEDURE AND SAMPLE SIZEThe sampling procedure that will be applied to
this study is “judgmental sampling.” That is an„expert‟ judgment will be employed to select on
who will be included in the sample frame.Only senior employees and those that hold the
positions of a human resource manager, bankManager or bank supervisors in the 43 commercial
banks in the county will be selected.This sampling procedure suits this study because the
selected sample will be having a betterunderstanding of the various operations of the bank as
well as various employees‟ performanceand their level of training.This study sample will also
help to avoid biased information as some employees at lower rankingmay tend to provide false
about their performance in their jobs and their levels of training. Someindividuals may not be
willing to disclose their levels of training hence provide falseinformation. 3.6 RESEARCH
INTRUMENTSThis study will use questionnaires as the primary instrument of data collection. The
questionnairewill contain demographic information of the respondents in terms of age, job
status, gender andwork experience; key variables of the study like employee productivity,
employee level oftraining and organizational performance. Questionnaires is the more
preferable data collection instrument for this study because therespondent are almost always
busy during working hours thus making difficult to fixed time forinterview. Also senior of
organizations would not like to be observed while they are workingthus making the observation
method not suitable for this study.People also tend to give a lot of unbiased information while
answering the questionnaire inprivate than when being interviewed. 11
19. 19. 3.7 PILOTINGTo test reliability of the instrument, a pilot study using some student studying
banking at theKenya School of Monetary studies has been done. Despite that this student don‟t
have enoughexperience and skill as the target group, they were able discuss and sagest some
modifications tothe instrument and were able to convince that the suggestions should be
adopted. 3.8 VALIDITY AND RELIABILITY OF RESEARCH INTRUMENTFrom the response on
piloting and the discussion with the supervisor the research instrument wasfound valid and
reliable for the study. 3.9 DATA COLLECTION PROCEDURESData for the study will be collected by
the researcher with the help of research assistants. Theresearch assistance will be trained on
how to administer the research instruments to therespondents under the supervision of the
researcher.The data collected by individual research assistants will then be compiled and
generalizedtogether to determine the general outcome. 3.10 DATA ANALYSIS AND
PRESENTATIONThe analysis of this study can be done using both descriptive and inferential
statistics. Whenusing Inferential statistics Pearson‟s coefficient of correlation can be used to
establish therelationship among the variables, Simple and multiple regression analysis can also
be used sinceit shows the interactive effect of the independent variables on the dependent
variable.In the case of descriptive statistics, frequency tables, pie charts, bar graphs, mean,
mode,standard deviations, variance will be used. 12
20. 20. REFERNCESKadian W. Wanyama and S. N. Mutsotso, (2010)-Relationship between capacity
buildingand employee productivity on performance of commercial banks in Kenya,
MasindeMuliro University of Science and TechnologyShikha N. Khera, (2007) Human Resource
Practices and their Impact on EmployeeProductivity: A Perceptual Analysis of Private, Public and
Foreign Bank Employees inIndiaIsiaka Sulu Babaita, (2010), Productivity as a Driving Force for
Investment in Trainingand Management Development in the Banking Industry, Nigerian Institute
ofManagementThomas Ogoro Ombati, Peterson Obara Magutu, Stephen Onserio Nyamwange
andRichard Bitange Nyaoga (2010), Technology and service quality in the banking
industry,University of Nairobi, School of Business and Narok University College, Faculty
 ofCommerceCentral bank of Kenya prudential guidelines, (2010)William Ashton, Ph.D. York
College, CUNY vii
21. 21. APPEDICESAppendix I: Introduction LetterATTENTION: BANK MANAGERRE: REQUEST FOR
DATA COLLECTION FROM YOUR BANKI am a diploma student at Kenya School of Monetary
Studies in Nairobi. I write to request foryour permission to collect data from your bank on a
study am carrying on (impacts of employeetraining on the performance of commercial banks in
Nairobi County).This study is a requirement for the award of my diploma in business science.I
will therefore require administering questionnaires to the following members of your staff;
theBank Manager, Human resource managers and the supervisors.The research findings of the
study will be shared with your institution, treated with utmostconfidentiality and used for
academic purposes only unless with direct permission to use itelsewhere for the interest of the
public.Your response and support will be greatly appreciated.Yours faithfully,Leonard
Akure.leonardakure@rocketmail.com viii
22. 22. Appendix II: QuestionnaireA STUDY ON IMPACTS OF EMPLOYEE TRAININING ON
PERFORMANCE OFCOMMERCIAL BANKS IN NAIROBI COUNTY.GENDER: ………………………………AGE
(optional)……………….NAME OF THE BANK: ……………………………………………………JOB POSITION: (tick
one) Human Resource manager/bank manager/ bank supervisorFor how long have you been in
your current job position?
………………………………………………………………………………………………………………………………………………Say
something about your experience in banking………………………………………………..
………………………………………………………………………………………………………What do think of employee
concerning what? You must be specific in your organization?
……………………………………………………………………………………………………………………………………………………
……………………………………………………………………………………………What performance related problems
do the bank experience with its employees?
……………………………………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………………………………
……………Why do you say so?…………………………………………………………………………………………………….
……………………………………………………………………………………………………………………………………………………
……………………………………………………..What do you think is the average employee training level
acceptable by your
bank………………………………………………………………………………………………………………………………………………
………………………………………………… ix

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 THE EFFECTIVENESS OF INTERNAL CONTROL SYSTEM ON THE

IMPROVEMENT OF FINANCIAL MANAGEMENT IN PUBLIC SECTOR BUSINESS

OUTFITS

(A CASE STUDY OF NIKE LAKE RESORT HOTEL, ENUGU) 

ABSTRACT

This research work has set out to determine the relationship between effective internal control

system and improve financial management.  The motivating factor in researching into the

relationship in the assumed contracting of contemporary Nigeria parastatals claming to employ

effective internal control system and observance of unimproved financial management.  In actual

fact, a problem was identified in some situation, management have constantly claimed effective

internal measures adopted but financial management has not improve accordingly.

In view of this problem, hypothesis were formulated, facts and figures were collected and these

hypothesis were tested proved using universally acknowledge statistical instrument, the chi-

square.  The method of deducting an interference from answers given in the interview schedule

was adopted in addition to the chi-square.  The null hypothesis were accepted and the alternative

hypothesis rejected, showing that effective internal control system leads to improved financial

management.

The analysis among other things revealed the effectiveness of internal control system on the

improvement of financial management.

The recommendation in looking at this work would be to advice readers for the research on this

topic.  The findings are based on data analysed.

In order to ensure that management understand what the concept of internal control entails,

frequent lectures should be organized for all these who constitute the top management of the

organization.  The management of parastatals should take measures to ensure that they maintain

an effective internal control system in their organization not only for the purpose of improvement

in financial management but to increase both the reliability of information and the credibility

organization to government investors, leaders and the public at large.

TABLE OF CONTENTS

            CHAPTER ONE

1.0              Introduction

1.1       Background of the Study

1.2       Statement of the Problem

1.3       Objectives of the Study

1.4       Research Hypothesis

1.5       Significance of the Study

1.6       Scope of the Study

1.7       Limitation of the Study

1.8       Research Questions

            CHAPTER TWO

2.0              REVIEW OF RELATED LITERATURE

2.1       Internal Check, Authorization, Recording Custody and Procedures

2.2       Classes of Internal Control

2.3       Administrative Control

2.4       Accounting Control

2.5       Internal Control Over Purchase

2.6       Internal Control Over Cash

2.7       An Overview of Effective Internal Control System

2.8       Internal Auditing

2.9       The Importance of Internal Audit Department in an Organization

            CHAPTER THREE

3.1              Research Design and Methodology

3.2              Area of Study

3.3              Population of Study

3.4              Sample Size Determination

3.5              Sampling Techniques

3.6              Research Instrumentation

3.7              Validity and Reliability of Research Instrument

3.8              Sources of Data

3.9              Method of Data Analysis

CHAPTER FOUR

4.0       Presentation and Analysis of Data

4.1       Presentation and Analysis of Data

4.2       Test of Hypothesis

CHAPTER FIVE

5.0              Summary of Findings/Conclusion and Recommendation

5.1       Findings
5.2       Conclusion

5.3       Recommendation

            References

            Appendix                                                                                                       

CHAPTER ONE

1.0              INTRODUCTION

1.1       BACKGROUND OF THE STUDY

            Internal Control system of an entity is strictly interrelated to the structure used by

management to oversee the activities of the organization, or to what is defined as the entity’s

corporate governance.  Good corporate governance should provide proper incentives for the

board or management to pursue objectives that are in the interest of the company and

shareholders and should facilitate effective monitoring, thereby encouraging firms to use

resources more effectively or efficiently.

            Whatever may be the nature of a business and its organizational set-up, the duty of the

auditor is to check if the financial statement prepared by the company shows a true and fair view

and the importance of audit can hardly be exaggerated.  Every auditor should worship those

principles and conventions which have been adopted and follow them on our daily behaviour.
            Auditing is an important professional task carrying heavy responsibilities and calling for

commensurate skill and judgment.

            The need for a continuous review of records undertaken within a business by specially

assigned staff need to be overemphasized.  The objective examination of financial statements

prepared by management of an organization not only increase the reliability of information, but

the credulity of the organization of investors, government and the public at large.  On accounting

matters, the main objective of internal audit is to ensure management that the internal check and

accounting system are effective in design and operation.

            The present practice of employment of effective internal control system and status of

auditors report represents the culmination of a century of development.  Initially, audit were

performed mostly at the request of business owners who wished to be assured that their book-

keeping records has been accurately handled and that all cash was properly accounted for.  So,

with the development of partnership, auditor also became useful in determining the amount of

profit to be distributed to partners.

            Because of divergent views head by many people who are not versed in the accounting

profession about whom the auditor is, the greater majority has always regarded the work of the

auditor to be limited to were desired to apprehend fraud.  They visualize him as wizened

individual wearing the traditional green eyeshade and sheave garters.  They would expect a top

high stool, counting money or meticulously long columns of figure and gaining his sole pleasure

in life from the apprehension of likeness persons whose books failed to balance or whose cash or

account proved to be short.

            However, this is an erroneous impression, audit reports aim not only to dictating frauds

but to review and report on the propriety and impropriety of management measures and

communication of financial preparation in an organization.  Same applies to internal control.  

An effective internal control measure is meant to determine both the degree of accuracy and

reliability of information, and that it is in accordance with accepted criteria and standards. 

Determining whether a particular internal control system is effective is a judgment resulting from

an assessment of whether the five components Control Environment, Risk Assessment, Control

Activities, Information and Communication and Monitoring are present and functioning. 

Effective controls provide reasonable assurance regarding the accomplishment of established

objectives.  Infact, the role of effective internal control system in business world can only be

likened to the importance to be said in the food.

            Internal control itself, is the organization of the accounting system and the distribution of

duties of the accounting staff in such a way that it gives to check on day-to-day transactions

which operate continuously as part of the routine system whereby the work of one person is

proved independently or is complementary to work of another.  That is each individual within a

unit is to be cognizant of proper job responsibilities.  The objective if this being the prevention or

early detection of errors or fraud.  All involve surveillance by at least two persons so far so

possible independent of each other.  The Internal Audit role is to examine the adequacy and

effectiveness of the organizational internal controls and make recommendations where control

improvements are needed.  Since Internal Auditing is to remain independent and objective, the

internal Audit office does not have the primary responsibility for establishing or maintaining

internal controls.  However, the effectiveness of the internal controls are enhanced through the

reviews performed and recommendation made by Internal Auditing.

            The discussion on the work of the auditor, the attendant audit report vis-à-vis the internal

control system as presented this study is intended to convey a more accurate impression of the

present day audit system.  This research study therefore, wants to determine empirically how

indispensable an effective control system is human and material management and allocation in a

parastatal using Nike Lake Resort Hotel, Enugu as a case study.

BRIEF HISTORY OF NIKE LAKE RESORT HOTEL

            The idea of a resort hotel started soon after the war.  Considering the place of tourism in

the world, this dream remained in the pipeline until 1979 when Dr. M.I. Okara former Premier of

the Eastern region performed the foundation laying ceremony of Nike Lake Resort Hotel.

            Urgent as the protest seemed, it was stalled by government bureaucracy thus politics and

constant change of administration.  Lake of fund and expertise is another overriding factor.

            Through concerted efforts, Nike Lake Resort Hotel, Ltd. Gen. Sani. Abacha invested the

plague under the watchful eyes of Col. Robert N. Akonobi the then Military Government State to

declare it open.                   

NIKE LAKE RESORT HOTEL ORGANIZATIONAL CHART

            Nike Lake Resort Hotel Organizational Chart

 
1.2              STATEMENT OF THE PROBLEM

In Nigeria today, especially in the public sector many public servants tend to look down

on the concept of accountability.  Accountability is a concept that concerns itself with the

liability to be accountable to the public or to whichever body for whom services is rendered. 

Stewardship account rendering which gives a sweeping over-view of the leaders and managers

performances has reviewed committee appointed to appraise the financial performance of most

public companies, ministries and contracts awarded during the ousted civilian and military

administration.  The order become necessary in view of allegation that politicians swindled

public money during the duration they were in office.  Consequently, most of these trusted public

servants have been found guilty of either embezzlement or misappropriation of public fund but

audit reports on the other hand may indicate that the company had maintained a system of

effective internal control and accounting records fairly kept.  This is therefore, a problem which

permeates our society which need to be investigated.  That is how do we reconcile the idea of

employing an effective internal control system and at the same time having the records unfairly

kept?

Before taking up this research, the researcher mind has been puzzled with the problem of

whether to believe that business organization these days on the face of financial misappropriation

still employ effective internal control system.  This is exactly the same problem which agitates

the minds of most investor and lenders.  However can an investor assure himself that his

investment will ever yield in the face of this malady, and the profit figures that attracted him are

not “lookep up” false or misleading.  The problem gets complicated to more when we pause to

view that our auditors who are supported to ensure that effective internal control exists, are the
chief perpetrator by conspiring.  It is said that even the audit department of the statement is not

left out in this mass fraud we have to ask control?  That is the question we have to trusted.

On its own part, evidence shows that the inability of the part of management to carryout

effective internal control measures over the years has culmination on their loss of potential

investor.

And in an effort to investigate the effectiveness of internal control system in the operation

of services of parastatals in Nigeria, one needs to understand the nature of the organizational set-

up to find where the problem emanates from.  In this regard, the following critical question

demand answer.

Are proper books of account kept with respect to:

a)                  All sum of money received and expended by the company and the matters in

respect of which the receipt and expenditure take place?

b)                  All sales and purchases of goods by the company?

c)                  The assets and liabilities of the company?

2.         Does the internal audit department conform to its function which include:

a)         enforcing compliance with laid down principles and procedures

b)         Monitoring enforcement and compliance ensuring that things are done.
c)         Making the financial statement prepared by it so accurate that management can safety

rely on them in making their business decisions.

            The above similar question need to be answered before the researcher can find out the

impact effective internal control system can have towards effective financial management and

allocation.

1.3              OBJECTIVES OF THE STUDY

The main trust of this study is to investigate and identify how effective and prompt the

conduct of internal check of financial statement of Nike Lake Resort Hotel in particular has been

vis-à-vis other parastatals in Nigeria.  In order to ascertain what impact they have created on the

improvement of their financial management.               

In summary, the purposes of the study are:

1.                  To find out why people should bother themselves with the existence of internal

control measures, if it is true that such measures lack effectiveness.

2.                  to advice and recommend, depending on the findings of the study and more

attention be directed towards the exercise of periodic internal check.  The

advise/recommendation is necessary because many people are affected when the

activities of those who are entrusted with the management of their affairs misuse such

privilege.
 3.                  identify the reliability to investors, lenders, government and public at large of

such periodic internal check of parastatals.

1.4              RESEARCH HYPOTHESIS

Based on the statement of problem and research purposes, the hypothesis are as follows: 

1.         Ho:       The company has effective internal control

system.

H1:       The company does not have effective internal control system.

2.         Ho:       That the impact of internal control has improved

the level of financial management since the past 5 years.

H1:       That the impact of internal control has not improved the level of financial

management since the past 5 years.

1.5              SIGNIFICANCE OF THE STUDY

It can safely be said that proper internal control system is the life wire of any corporation

for the rendition of an opinion by audit reports attesting to the fact that an effective internal

control system preceded the preparation of the company’s financial statements on the past

performances are for information purposes.  The need for this study, therefore, lines on the

recommendation that were made at the end of the study and their implementation.
 In general, the significance of this study would at least be predicted on:

1.                  That good internal control should safeguard the company’s assets.

2.                  That good internal control should make accounting record are therefore, the

financial statements prepared from them so accurate that the management can safely

rely on the in making their business decisions.

3.                  That their responsibility for the establishment and working of internal control

lines with the management and not with the independent auditor and

4.                  that employment of effective internal control system by a parastatal has a

tremendous impact on the improvement of financial management of that

organization. 

1.6              SCOPE OF THE STUDY

Nike Lake Resort Hotel is a service company located at Nike, Enugu.  However, the

questionnaire for the study will be extended to all the department in the company.  As to the

report and data analysis, areas of concentration will include the financial statements and the audit

reports including the recommendations that may have made by an independent auditor. 

Concentration will include these areas because financial statements are derived from internal

control measures and audit reports are based on financial statements.

 The study does not intend involving the computation of all ratio as this may amount to

deviation but selected ones may be computed and the selection which depend on the degree of

relevance of the study.  Further, the study will not extend to physical examination of cash, stock

or other assets and liabilities but to accept any written as may be produced by an appropriate

management officer.  The questionnaire itself will not go beyond these relevant areas except

where remark and other necessary information are needed.  The questionnaire will concentrate

on the management of internal resources and the impact of internal control on it. 

External/independent audit and its attendant reports will have to be discussed very briefly at it is

the climax of the entire audit exercise.

1.7              RESEARCH QUESTIONS

To achieve the objectives of the study, the researcher would seek to provide answers to

the following questions:

1.                  Does the company has effective internal control system?

2.                  how does the impact of internal control improved the level of financial

management since the past five (5) years?

 
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