| dc.description.abstract | The majority of challenges faced by
medium enterprises (MEs) are fraudrelated and could be avoided if in place
there is a strong internal control system.
The purpose of this study was to establish
the influence of internal controls on the
financial performance of MEs in the
manufacturing sector in Nairobi County.
The study was descriptive, the population
for the study included 95 MEs in the areas
of the food processing sector: flour
milling, milk processing, and cooking oil
manufacturing. The sample for the
population was 77 MEs obtained through
the Yamane formula at a margin error of
5%. Data for the study was collected using
a questionnaire through the in-person drop
and pick method. The study also collected
secondary data from the financial
statements of the companies on sales as
well as net profit earned. Collected data
was analyzed through descriptive analysis
(frequency, percentages, mean and
standard deviation) and inferential analysis
through simple linear regression using
SPSS. The study found that food
manufacturing companies in Nairobi
County utilize cash reconciliation,
segregation of duties, inventory audit, cost
management, and risk assessment as the
internal controls. The study further
revealed on cash reconciliation and
financial performance β = 0.759, t=2.770
with associated p- value= 0.0079 which
was less than 0.05). The study concluded
that cash reconciliations had a positive and
significant influence on the financial
performance of MEs in Nairobi county.
The study recommended for the
manufacturing MEs in Nairobi County to
keep petty cash records for reconciliation,
have a real-time cash reconciliation
register, reconcile payment receipts and
invoice records, conduct ad-hock cash
checks, have alert messages on bank
transactions. | en_US |
