The Impact of Internal Control System in Revenue Generation


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– The Impact of Internal Control System in Revenue Generation –

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The objective of this case study was to evaluate the internal control system in operation at Enugu Electricity distribution Company of Nigeria Plc in Enugu State with a view of knowing its impact on revenue generation in the state. A sample of 40 was selected for the study randomly.

The questionnaire were used in gathering the primary data while secondary data were collected from the work of others in the form of literature review.

The data collected were analyzed using the chi square (x2) as the statistical tool to determine the valuation of the hypothesis. The findings concluded that weak internal control system encourages collision fraud, loss of revenue, embezzlement and computation.

This have always impeded the company’s ability to effectively supply electricity to customers and there from generate revenue, internal audit system ensures operations compliance with set policies, promoting accuracy and reliability of transactions recording.

In addition, effective internal control system ensures effective recommends the remodeling of the company’s internal control system and strengthening of the investigating unit.

The components sectors of the present corporate Enugu Electricity Distribution Company of Nigeria Plc should be unbundled into separate distinct independent entities that handle generation, transmission, distribution and marketing. It further recommends that prepaid meters should be seen as an alternative to further accumulate debts.


1.1 Background of the Study

Every organization has a purpose, which includes making some product and rendering some services at a price, for normal operations of the business organization, it is the produce or sources of the firm that cause cash receipts (revenue) to flow into the firm.

Revenue is associated with products or service of a firm as source of expected cash receipts. Revenue is an event; an increase that applies definitely to value that monetary.

Revenue therefore refers to the monetary event of asset values increasing in the firm due to the physical event of production or services of the firm’s product or services.

In Kam, (1987:237), financial accounting standard (FABS) defines revenue as inflows or other enhancement of assets of an entry or statement of its liabilities (or combination of book) during period from delivery or producing goods, rendering service or other activities that constitutes the entry’s ongoing major or central operations.

On the basics of the above, national electric power authority, now Enugu Electricity Distribution company of Nigeria is a government owned public whity establishment customer service chatered (2004).

Her mission as a service industry is to satisfactorily meet customers electricity demand in the most cost effective manner using proven technology are were motivated customer friendly work force with adequate consideration for the environment.

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