Revista de Economía y Negocios

Assessment of Government Internal Control Systems on Financial Reporting Quality in Ghana: A Case Study of Ghana Revenue Authority

Abstract

Wonder Agbenyo, Yuansheng Jiang and Prince Komla Cobblah

Internal control systems can provide reasonable but not absolute assurance to an entity’s management and board of directors that the organization’s objectives will be ascertained. Internal control actions on quality financial report state positive goals more especially when all the parties involved adhere to their duties; thus making the quality of financial reporting comparable, understandable, relevant, and reliable. An organizations framework of financial control plays a key role in the management of risk that is important to the satisfaction of its operational objectives. In this regard, this study investigated the impact of government internal control systems on financial reporting quality in Ghana using Ghana Revenue Authority as the case study. Specifically, the study sought to examine the nature and quality of financial reporting in the GRA and to analyze the impact of government internal control systems on financial reporting quality. Both quota and simple random sampling techniques were used to select fifty (50) persons as the sample size of the study. Questionnaires were used to obtain data from the employees of Ghana Revenue Authority in Ghana. The correlation matrix was used to establish a positive relationship between government internal control systems and financial reporting quality. The study find out that contrary to apriori expectation sign monitoring as an element of internal control system has a negative impact on the financial quality reporting but was however statistically significant. The study also revealed that with a unit increase in the collection performance quality of financial reporting of GRA will improve. The study recommended that the government should ensure that the internal control system is periodically monitored and evaluated.