The Effect of Internal Controls on Business Peformance of Small and Medium Scale Enterprises a Case Study of Petro City Enterprises Uganda Limited, Kyengera, Masaka Road

Abstract

The major objective of this study was to establish the effect of internal controls and business performance in small and medium scale enterprises, a case study of Petro City Enterprises Uganda limited. The independent variable was internal controls with risk assessment, internal auditing and information & communication monitoring as its dimensions. The dependent variable was business performance with profitability, sales growth and market share as its dimensions. The objectives of the study were; to assess the effect of risk assessment on business performance, to identify the effect of internal audit on business performance and to establish the role of communication and information monitoring on business performance.

The study adopted a case study design employing both qualitative and quantitative approaches on a study area of Petro city enterprises head office in kyengera, along Masaka road, Uganda. The study population was 60 employees and a sample size of 52 employees. Data collection sources were both primary and secondary sources the data collection tools used were questionnaires and interview guide.

The analysis of data was done using SPSS for quantitative data and content & theme analysis for qualitative data.

The findings showed that there was a positive and significant relationship of between risk assessment and performance, a positive but insignificant relationship between information and communication monitoring and performance and a positive and significant relationship between internal auditing and performance. The study therefore concluded that the internal control systems have a positive and significant effect on business performance.

The key recommendations made by the study included; to set up individual department for internal auditing, risk assessment and information & communication monitoring, to introduce advertising in the company’s marketing strategies and to give human resource the power to the human resource to exercise communication monitoring towards employees.

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