Great Zimbabwe University

Faculty of Commerce
RICHMAN TAFATAONA
Department of Accounting And Finance

DISSERTATION TOPIC

AN INVESTGATION OF THE EFFECTIVENESS AND EFFICIENCY OF THE INTERNAL ACCOUNTING CONTROL SYSTEMS OVER PURCHASES AT GEDDES LIMITED: HARARE

STUDENT NO# M040809 JUNE 2008

SUBMMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS OF THE BACHELOR OF COMMERCE [HONOURS] DEGREE IN ACCOUNTING IN THE FACULTY OF COMMERCE DEPARTMENT OF ACCOUNTING AND FINANCE AT GREAT ZIMBABWE UNIVERSITY MASVINGO; ZIMBABWE

Great Zimbabwe University 2008

Title Page An investigation of the effectiveness and efficiency of the internal accounting control systems over purchases at Geddes Limited

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Great Zimbabwe University 2008

Great Zimbabwe University

Faculty of Commerce
Release Form Name of Author Title of dissertation An investigation of the effectiveness and efficiency of internal accounting control systems over purchases at Geddes Limited. Program Bachelor of Commerce Honours Degree in Accounting Year 2008 Permission is hereby granted to the great Zimbabwe university library to produce copies of this dissertation and to lend or sell such copies for private, scholarly or scientific research purposes only. The author reserves neither the right to publications nor the extensive extracts from of this dissertation. Signed Permanent address Date signed . 3479 Rimuka Infill Kadoma ...
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Richman Tafataona

Great Zimbabwe University 2008

Great Zimbabwe University

Faculty of Commerce
Approval Form The undersigned confirm that they have read and recommended to the Great Zimbabwe University for the acceptance of a Dissertation entitled An investigation of the effectiveness and efficiency of the internal accounting control systems over purchases at Geddes Limited, submitted by Richman Tafataona in partial fulfillment of the Bachelor Of Commerce Honours Degree In Accounting in the Department of Accounting and Finance. . Supervisor(s) Date .. Examiner(s) .. Date
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Dedication A journey of a million miles begins with one step, on these premises I would like to dedicate this Dissertation to my late Father Lymon who bolstered me into the first step of this journey and to my mother Lucia who has always been a pillar of strength through and through.

Great Zimbabwe University 2008

Abstract Lubricated by passion, integrity and diligence, this dissertation is an exploratory account of the internal accounting control systems over purchases at Geddes Limited. The main aim is to investigate the effectiveness and efficiency of the internal accounting controls systems over purchases at this wholly owned subsidiary of CAPS Holdings Limited.

The dissertation takes off by introducing Geddes Limited and the statement to the problem. It sets clearly the research questions and objectives and the problem relating to the efficiency and effectiveness of the internal accounting controls over purchases.

Then literature relating to the study will be reviewed citing different authoritative sources and authors. In the process the researcher narrates how he collected the relevant information both primary and secondary. In addition the limitations of the research will be pointed out with the extracted information being presented in a clear and coherent manner. At the end the conclusions will be made on the efficiency and effectiveness of the internal accounting control system and the weaknesses therein. Necessary recommendations will be made which are aimed at improving the operations at Geddes limited.
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Great Zimbabwe University 2008

Acknowledgements Behind every successful graduate (post or under), there are the academia in the vast forest of knowledge ready to bolster up the successful cultivation of the theoretical guidance. Firstly I would like to extent my sincere gratitude to my dissertation supervisor Ms Chitungo for the enabling environment she created during the write up of this dissertation. I am also indebted to all my lecturers from first year up to today for the knowledge they inculcated which has helped in lubricating the discourse of this dissertation. I would also like to thank the staff at Geddes Limited especially The Accountant, Mr. M Chirenje, The Buyer, Mr. O Kunhe, The Purchasing officer, Mr. J Nyaruwanga, The Creditors clerk and warehouse clerks for their responses to the interview questions issued to them. Moreover I would like to thank Mr. Benedict Taurai Ngonidzashe and also my fellow college mates N Tsvangirayi, B Masuku, E Tafirenyika an M T Kurewa who contributed immensely through encouragement to the success of this dissertation. framework through providing encouragement, inspiration and

Last but most importantly to God be the Glory for he has taken me this far with his Grace, without whose grace, I would not be alive and at this Great institution the Great Zimbabwe University.

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Table of contents Title page Release Form Approval Form Dedication Abstract Acknowledgements Table of contents List of tables List of figures List of appendices Bibliography CHAPTER I: INTRODUCTION Background to the study Justification of the study Statement of the problem Objectives of the study Research questions Statement of hypothesis Importance of the study Assumptions Delimitations Limitations Summary 1 2 2 2 3 3 4 4 5 5 6 ii iii iv v vi vii viii ix ix x x

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CHAPTER II: LITERATURE REVIEW Introduction Definition of internal accounting controls Basic objectives of internal accounting controls over purchases Basic features of internal accounting controls over purchases Disciplines over internal accounting controls Factors affecting internal accounting controls Summary 7 7 10 12 16 21 24

CHAPTER III RESEACH METHODOLOGY Introduction Research design Types of data Research instruments Population Sample size/plan Data collection procedures Problems encountered and limitations Summary 25 25 25 27 31 31 32 33 33

CHAPTER IV DATA PRESENTATION AND ANALYSIS Introduction Data presentation and analysis Research findings Statistical and hypothesis testing Summary 34 35 40 44 46
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Great Zimbabwe University 2008

CHAPTER V CONCLUSION AND RECOMMENDATIONS Introduction Weaknesses Conclusions Hypothesis results Recommendations Summary 47 47 48 49 49 52

LIST OF TABLE 3.1 Composition of staff who participated in the research 4.1 Staff response rate 4.2 Authorisation on ordering 4.3 Authorised vs. unauthorized purchase orders 4.4 Acceptance of Goods not ordered 32 34 35 36 38

LIST OF FIGURES 2.1 Specific issues under internal controls 4.1 Authorisatio on ordering 4.2 Authorised vs. unauthorized purchase orders 4.3 Acceptance of goods not ordered 4.4 Paying for goods 4.5 Overview of flowchart 4.6 Existing requisition system at Geddes Limited 10 35 37 38 39 40 41
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4.7 Existing payment authorisation procedures 4.8 Hypothesis testing 42 43

LIST OF APPENDICES A. Interview questions B. Questionnaire 53 55

BIBLIOGRAPHY

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