Influence of Internal Control Practices On the Financial Performance of Tea Processing Firms in Kenya: A Case of Tea Factories in Nyamira County
Author: Risper Nyambeki Mauti & Professor. Willy Muturi, Kenya
Abstract: The study sought to assess the influence of internal controls on financial performance of Kenya tea factories. In the particular the researcher focused on these specific objectives: to determine the influence of segregation of duties on financial performance of Kenya and to evaluate the influence of internal checks on financial performance of Kenya tea factories. The study was conducted in tea factories in Nyamira County, because it is expanding with goods. This study, the researcher used a descriptive research design, because it is based on the fact given from the field as described in the study. The target population was comprised of 130 respondents in tea factories that involved employees from accounting-related sections, and audit sections of the tea factories. The sample size for this study was 98 employees working in accounts related sections, procurement and audits were selected from the entire population by use of stratified sampling method by applying Yamane formula as shown. Data was collected by use of a research questionnaire. Data collected was reorganized edited, coded and key in to the statistical programs for analysis then the coded data was analyzed using descriptive statistics such as, mean and standard deviation. The data was presented by tables and it indicated that segregation of duties had a negative influence on financial performance of tea firms. It was concluded that segregation of duties need to be done with utmost care to avoid the negative impacts of this variable. On compliance tests, the study established that there was need to have strong compliance tests within the firms in order to enhance the financial performance of the firms as this variable was found to positively affect the financial performance of the tea firms. It was also realized that internal controls and checks positively influence the financial performance significantly and therefore recommended that firms need to ensure that internal controls need to be instituted and enhanced for ultimate optimal financial performance.