The Profile Of Ghana Stock Exchange Market Accounting Essay

Ghana Stock Exchange was established in July 1989 as a private company limited by warrant under the Companies Code of 1963 and was subsequently given acknowledgment as an authorised Stock Exchange under the Stock Exchange Act of 1971 ( Act 384 ) in October 1990. The Council of the Exchange was inaugurated on November 12, 1990 and trading commenced on its floor the same twenty-four hours. The stock exchange market changed its position to a public company limited by warrant in April 1994.Ghana Stock Exchange market is governed by a Council of nine stand foring three independent members, two representatives of accredited covering members, two listed company representatives and two executives. The Council of the Exchange has assorted commissions, which enable it to give particular attending to assorted facets of the operations of the Exchange. They are the Listing, Finance and Risk Management and Surveillance.

The followers are the cardinal functions of the assorted Committees: Listing Committee considers applications for listing ; Finance Committee considers the fiscal facets of the Exchange ‘s operations, including budgets and wage ; Risk Management and Surveillance Committee appraises, and approves applications for rank.Ghana Stock Exchange is historically set up to supply the installations and model to the populace for the purchase and sale of bonds, portions and other securities. Second is to command the granting of citations on the securities market in regard of bonds, portions and other securities of any company, corporation, authorities, municipality, local authorization or other organic structure corporate. Regulating the traffics of members with their clients and other members and organizing the stock covering activities of members and ease the exchange of information including monetary values of securities listed for their common advantages and for benefit of their clients is yet another ground why it is set up.

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Finally is to co-operate with association of shareholders and exchange markets in other states every bit good as obtaining and doing seasonably and appropriate information that will assist their client to do informed fiscal determinations. In 2004, the exchange was adjudged the universe ‘s best executing market with a twelvemonth return of 144 per centum in US dollar footings against Morgan Stanley Capital with 30 per centum returns as reported in International Global Index ( DataBank Group, 2004 ) . The findings conclude that there are great possible for vivacious capital elevation activity for the exchange.Ghana Stock exchange market council rank includes some of the most distinguished and competent individuals in Ghanaian commercialism, industry, finance and public service whose indefatigable attempt over the old ages have raised the exchange market capitalisation from small over 20 billion Ghana Cedis ( GHA? 20bn ) to about 49 billion Ghana Cedis ( GHA?49bn ) in 2011. These brilliant market public presentations now place the exchange market at the 3rd largest capital market in Sub-Saharan Africa, after South Africa and Nigeria. Nevertheless, the operations of the market are seasonably reviewed and refined overtime.

1.

5.1 Regulations

The activities on the stock exchange market are been governed and regulated by the Ghana Stock Exchange Listing Regulations 1990 ( LI 1509 ) . In an effort by the ordinance to guarantee that internal control mechanisms are put in topographic point by its listed members recommend the formation of Audit sub-committee in all listed companies whose oversight duty are to reexamine and measure the internal control system ; reappraisal audited histories ; appoint and compensate the hearers ; reexamine the internal audit processs and effectivity and eventually the assessment of the general behavior of the concern of the company.

The staying listing ordinance are contain in the appendix two.

2 LITERATURE REVIEW

To analyze the relationship between internal control and company public presentation on Ghanese listed company, the research worker has studied and reviewed theories and constructs from several types of resources among them are academic documents, books and research documents that are related to the subject.

2. 1 Theoretical Model

The survey besides support most earlier research that the complexness and dramatic enlargement in the concern activities in recent clip could non let proprietors to expeditiously and efficaciously pull off the whole personal businesss of their concerns entirely therefore there is the demand to use a 2nd party ( agent ) to help in the operational procedure of the concern activities. The agent in this instance now owe the proprietors ( principal ) a responsibility to describe on all the contractual activities that he has undertaken on behave of his principal on a regular footing.

This contractual relation between the two parties is what is known to be an bureau relationship. Harmonizing to Jensen and Meckling ( 1976 ) , bureau relationship is a contract under which one or more principals engage another individual known as agent to execute some undertaking on their behalf, which entails deputing some decision-making authorization to the agent. Agency theory hence labeled the proprietors ‘ as the principal and the directors as the agents. It is deserving observing that agent in their effort to maintain up in concern therefore may be imparting all their attempts towards enlargement and growing, proprietors might merely be interested in maximising their returns therefore doing struggles between the two parties. Barlie and Means ( 1932 ) stated that in order to harmonise the involvements of the principal and the agent and every bit good strengthened their relationship the principal must use an expert to supervise the agent. This work was supported by Coarse ( 1937 ) who states that the contract between the agent and the chief serves as struggle declaration as the principal determines the volume and the nature of the work and the agent merely execute the work to the later. He concluded his work by suggesting that the chief suffers fiddling which deprive them from profiting from the work delegated to the agent.

The survey now unpinned itself to the theory of eventuality to assist set up the relationship between the control factors and the company ‘s public presentation. Contingency theory is a theory in an organisational research that established conceptual footings in an organisational literature ( Donaldson, 2001 ; Sauser, Reilly & A ; Shenhar, 2009 ) . This theory has been a topic of wider research country in the past decennaries but yet has non been to the full developed. ( Ayman, Chemers & A ; Fiedler, 1995 ) . Harmonizing to ( Chenhall, 2003 ; Drazin & A ; Van de Ven, 1985 ; Reid & A ; Smith, 2000 ) the early research workers on eventuality theory in organisation design chiefly focuses on the effects of uncertainness on the organisational construction. It was nevertheless discovered that recent surveies in direction accounting and scrutinizing are all based on eventuality theory ( Abushaiba & A ; Zainuddin, 2012 ; Reid & A ; Smith, 2000 ; Sudsomboon & A ; Ussahawanitchakit, 2009 ; Valanciene & A ; Gimzauskiene, 2009 ) .

Additionally, the relevant of any given factor should be contingent upon other factors ( Krishnamoorthy, 2002 ) but so eventuality theory harmonizing to Umanath, ( 2003 ) facilitates researcher ‘s ability to consistently present factors to explicate and foretell future occurrences. This is because it does depend on one ‘s reading of the theory, and such theory has the capableness of bring forthing accurate hypotheses and consistent maps ( Schoonhoven, 1981 ) . Therefore, indicate the possibility of using eventuality model in the public sectors ( Wood, 2009 ) . Mean while a eventuality theory besides differs with other theories in that establishes relationship between dependant and independent variables in empirical surveies ( Drazin & A ; Van de Ven, 1985 ) .The survey therefore proposes that company ‘s public presentation of listed houses in Ghana stock exchange is contingent upon those constituents of internal controls.

2.

3.5 Debt Leverage

Debt purchase measures the ratio of entire debt to equity. That is it shows the grade to which a house is utilizing its borrowed money. Companies that are extremely leveraged may be at hazard of bankruptcy if they are unable to do payments on their debt ; they may besides be unable to happen new loaners in the hereafter. Leverage is non ever bad, nevertheless ; it can increase the stockholders ‘ return on their investing and do good usage of the revenue enhancement advantages associated with adoption.

The trade-off theory ( TO ) ( Bradley, Jarrell and Kim, 1984 ; Harris and Raviv, 1991 ) suggests that every house has a specific optimum debt-to-equity ratio determined by equilibrating the present value of expected fringy benefits of purchase against the present value of expected fringy costs of purchase. ByA this theory, each company borrows in order to bit by bit travel towards its optimum debt-equity ratio, which in bend maximizes its market value ( given by the present value of the amount of the expected costs and benefits of debt ) . Furthermore Jensen ( 1986 ) and Zwiebel ( 1996 ) support that increased debt can cut down the chance of a house ‘s coup d’etat by perpetrating directors to a more efficient concern scheme. Therefore, there is either a negative or positive influence of purchase on houses ‘ public presentation.

2.3.

6 Size of a house

The size of the house affects its fiscal public presentation in many ways. Large houses can work economic systems of graduated table and range and therefore being more efficient compared to little houses. In add-on, little houses may hold less power than big houses ; hence they may happen it hard to vie with the big houses peculiarly in extremely competitory markets.

On the other manus, as houses become larger, they might endure from x-inefficiencies, taking to inferior fiscal public presentation. Theory, hence, establishes relationship between size and public presentation ( Majumdar, 1997, p.233 ) .

2.3.7 Management Practice

The acceptance of best direction patterns is a beginning of competitory advantage, positively related to houses ‘ public presentation, growing and endurance. Harmonizing to Timmons ( 1994 ) enterprisers who win possess non merely an advanced behaviour but besides solid general direction accomplishments.

Bird ( 1995 ) and Ronstadt ( 1984 ) conclude that enterpriser ‘s direction accomplishments were contributing to concern public presentation and growing. Successful houses will be those that have developed a nucleus competenceA in entrepreneurship where a nucleus competency refers to ‘a combination of complementary accomplishments and cognition bases embedded in a group or squad that consequences in the ability to put to death one or more critical procedures to a first criterion ( Cayne, Hall and Clifford, 1997 ) .In drumhead, it can be observed that most of the surveies conducted on the internal control and house ‘s public presentation were all done in a regulative environment where companies are mandated to follow with the internal control revelation and have supported the fact that there is a relationship between the internal control system and the fiscal public presentation of a house. The small that were done in non-regulatory environment like Ghana merely seek to happen out the effectivity of the system by hiting listed houses based on the points described in COSO ‘s theoretical account.

( Joseph.M, Kuipo and Obeng V ) . Kajola, Sunday O ( 2008 ) used ROE and Profit border to public presentation of listed houses in Nigeria. He found out that board size and main executive position have positive relationship with house ‘s public presentation.

However, looking at the above surveies that have been conducted on the effectivity of the internal control, this research further seeks to analyze the empirical survey of internal control on house ‘s public presentation by analyzing control environment, hazard appraisal, monitoring and mention to international codification as steps of internal controls on Ghanaian Stock exchange market since surveies are yet to be carried in that respects in Ghana.

4 Empirical Analysis

4.1 Sample Selection

The information for the survey was obtained from audited fiscal statements of 30 listed companies on the stock exchange market based on the one-year study available between 2000 and 2010. The research worker therefore used purposive sampling technique to choose the sample size.

Aim trying technique was used because the survey was aiming companies who have been listed in the Ghana stock exchange for at least ten old ages since its constitution. And more besides this technique ensures that relevant people with utile information for a survey are merely captured and studied. A sum of 30 companies from across all the industries were eventually used as sample for the survey.

Nine different internal control indexes were examined and topographic point under four different internal control factors recommended by COSO.

4.2 Data Management

The informations collected from the sample size was fed into Statistical Package for Social Scientist for easy analysis and reading of consequences. The relationship that exists between the internal control and fiscal public presentation of the houses was assessed utilizing correlativity. Multiple arrested developments and ordinary least square ( OLS ) were besides used in the appraisal and reading of the informations.

4.3 Arrested development

The survey adopted the economic theoretical account that was in line with most of the surveies conducted in the same field and it is stated as:Y = I?0 + I?Fit + eitWhere Y is the dependent variables used in the survey, I?0 is changeless and I?0 is the coefficient of the explanatory variable whereas the eit is the error term.

From the above the below equation was evolve for the survey.Performance = I?0 + I?1CONTENV + I?2RISKMGT + I?3MONT. + I?4CODE + eitThe thought was to find now the internal control measured by the independent variable have consequence on the company ‘s public presentation.

4.4 Descriptive Statisticss

Tables 1 and 2 below show the variables and their descriptions as used in the surveyTable 1a: Dependent variable description

Variable

Measurement

REP= ReportingReporting variable is set to 1 if steadfast discloses its internal control in theirLIQ = Liquidity i.e Current RatioCurrent AssetssCurrent LiabilitiessPM = Profit MarginNet Net income after revenue enhancementEmployee turnoverTable 1b: Mugwump variable description

Variable

Measurements

Control environmentControl environment variable set to 1 if reported in the one-year fiscal statement, 0 otherwise.Hazard directionIf the company reports on the hazard direction activities, one ( 1 ) and zero for otherwiseMonitoringMonitoring variable besides set to 2 if there is study on external independent hearer and every bit good describe on the responsibilities of internal audit commission and 0 if otherwise.International codificationMention to any international internal control codification gives the house one ( 1 ) and zero if nonThe tabular array 2 below shows the descriptive statistics of all the variables used in this surveyTable 2: Descriptive Statisticss

Rep

LIQ

Autopsy

CONENV

RISKMGT

MONT

Code

Mean0.

46921.41060.04692.96190.

51911.34020.1114Std.

Dev0.05001.14582.33711.18630.

50040.47450.3151Discrepancy0.24981.31285.462241.40740.

25040.22510.0993Lopsidedness0.12345.2551-8.2150-0.6038-0.07630.

67472.4696Kurtosis1.015242.827104.

8721.77321.00581.45527.

0991Scope112.794539.763111Minimum00.

0794-29.21010Maximum112.873910.

564121N Valid341341341341341341341Missing0000000The mean of REP of the entire sampled houses is approximately 46 % , that of LIQ is 1: 1.4 and the mean of PM is 4.7 % .

The consequence clearly shown that on norm, out of the entire houses listed on the exchange market, the figure that study or disclosed their internal control mechanism on their one-year fiscal statement is closed to half of the entire population in the market therefore 46 % of 100 % . And that those who disclosed their internal control mechanisms are able to run into their short term fiscal duty as and when it falls due therefore have their current ratio to be 1:1.4. The mean periodic net income earned over the 10 old ages was besides GH 4.7.

The consequence above besides shows that out of the four ( 4 ) elements measured under the control environment factor ( direction duty, internal audit commission, ethical values and assignment of responsibilities and organisational construction ) , houses that report their internal control mechanisms, on norm besides have three out of the four factors which make the survey to reason that the listed houses in the exchange market hold control system in topographic point which accounted for their fiscal public presentation as seen above. From the above analysis the survey conclude that listed houses in Ghana stock exchange market have some degree of internal control mechanism installed in their company merely that most do n’t see the demand to describe them on their fiscal statement this supported the survey undertaken by Joseph at el. , 2012 that attested on the being of internal control system of listed companies in the Ghana stock exchange merely that there is more room for betterment in the effectivity of the internal control system particularly in the countries of control activities and monitoring. This makes the survey to hold with earlier surveies that listed houses in Ghana stock exchange studies on internal controls in their one-year fiscal statement.

The survey besides identified two ( 2 ) monitoring factors viz. ; studies of being of internal control by an external independent hearer and execution of recommendation by hearers in the following twelvemonth ‘s one-year study. The consequence shown that approximately 1.3 out of the 2 factors examined was put in topographic point by those who report their internal control system. Again about 52 % of the sample size population has put some steps in topographic point to at least pull off the fiscal hazard that might happen in the class of their day-to-day operations. These attest to the fact that most of the listed houses understood the deductions of hazard on fiscal public presentation and hence are ready to contend it. It is instead unfortunate that out of the entire houses that have been sampled, merely 11 % therefore three out of 30 listed houses report on their internal control mechanisms in their one-year studies with mention to an international internal control codification. Though the staying 35 % out of 46 % do describe on their internal control mechanisms, they do so based on what their direction has designed without doing any mention to any of the international codification criterions like studies of COSO, Turnbull, and SOX.

4.3 Arrested development Analysis

The tabular arraies 3a, 3b and 3c below present the correlativities among all the variables used in the survey. From table 3a utilizing the Pearson correlativity, REP is positively correlated with the house ‘s control environment factors and it is important ( sig 0.

0000 ) . Similar consequences appeared for hazard direction, monitoring and mention to international codification and are all important. However control environment and hazard direction have comparatively stronger correlativity with describing variable among other independent variables as they have about 52 % and 51 % severally and with monitoring factor holding the lowest correlativity with the coverage variable.The positive correlativity that exist between the dependant variable and the independent variables indicate that houses disclosure policy in one-year study will increase when there is equal internal control mechanism put in topographic point by that house.Table 3a: Correlations ( Pearson ) – Rep as steadfast public presentation index AT significance degree of 5 %

Rep

CONENV

RISKMGT

MONT

Code

Rep

1.

00000.52140.50510.13110.3767

CONENV

0.52141.00000.42980.

15370.2553

RISKMGT

0.50510.42981.00000.

08410.3036

MONT

0.13110.15370.08411.

00000.1981

Code

0.37670.25530.

30360.19811.0000

Sig ( 1-tailed ) Rep

0.00000.00000.01540.0000

CONENV

0.

0000

0.00000.00440.0000

RISKMGT

0.

00000.0000

0.12110.

0000

MONT

0.01540.00440.1211

0.0002

Code

0.00000.00000.

00000.0002

Obs.

341341341341341Table 3b: Correlations ( Pearson ) – LIQ as steadfast public presentation index AT significance degree of 5 %

LIQ

CONENV

RISKMGT

MONT

Code

LIQ

1.

00000.0837-0.1130-0.0479-0.0888

CONENV

0.08371.00000.42980.

15370.2553

RISKMGT

-0.11300.42981.00000.

08410.3036

MONT

-0.04790.15370.08411.00000.1981

Code

-0.08880.

25530.30360.19811.

0000

Sig ( 1-tailed ) LIQ

0.12290.03710.37800.1017

CONENV

0.1229

0.00000.00440.

0000

RISKMGT

0.03710.0000

0.12110.0000

MONT

0.37800.00440.1211

0.

0002

Code

0.10170.00000.

00000.0002

Obs.

341341341341341Table 3b indicates that though LIQ is positively correlated with control environment, it is non statistically important ( sig 0.1229 ) .

However LIQ is negatively correlated with the other three internal control factors but merely risk direction is important ( sig 0.0371 ) . Though the other two variables are non statistically important, their negative correlativity shows that the absence of internal control mechanism in a house makes that house financially vulnerable in run intoing its short term fiscal duties.Table 3c: Correlations ( Pearson ) – Autopsy as steadfast public presentation index AT significance degree of 5 %

Autopsy

CONENV

RISKMGT

MONT

Code

Autopsy

1.00000.

0155-0.1508-0.12480.0133

CONENV

0.01551.00000.

42980.15370.2553

RISKMGT

-0.15080.42981.

00000.08410.3036

MONT

-0.12480.15370.

08411.00000.1981

Code

0.01330.25530.30360.19811.

0000

Sig ( 1-tailed ) Autopsy

0.77560.00530.02110.8069

CONENV

0.

7756

0.00000.00440.0000

RISKMGT

0.00530.0000

0.12110.

0000

MONT

0.02110.00440.1211

0.0002

Code

0.

80690.00000.00000.0002

Obs.

341341341341341Table 3c besides shows that PM which is the last fiscal public presentation index of this survey is positively correlated with control environment and mention to international codification variables but non statistically important ( sig 0.

7756 and 0.8069 severally ) . It nevertheless shows that the net income border of the house can merely increases when those two factors are installed in a house. On the other manus hazard direction and monitoring variables are negatively correlated with house ‘s net income border and are all important ( sig 0.0053 and 0.

0211 severally ) . This negative relationship make the survey to hold with the earlier survey on the demand for listed houses on Ghana stock exchange to make more work on their hazard direction and monitoring activities so as to heighten their fiscal public presentation in the long tally.Table 4a: ANOVA – REP as dependent variable

Model

SUM OF SQ

DF

MEAN SQ

F

SIG

1 Arrested development37.40766.23443.820.000Residual47.520334.

1423Entire84.927340.2498Forecasters: ( Constant ) , conenv, riskmgt, mont, codificationDependent variable: RepTable 4b: ANOVA – LIQ as dependant variable

Model

SUM OF SQ

DF

MEAN SQ

F

SIG

1 Arrested development19.87663.3132.590.018Residual426.

4753341.277Entire446.3513401.313Forecasters: ( Constant ) , conenv, riskmgt, mont, codificationDependent variable: LIQTable 4c: ANOVA – Autopsy as dependant variable

Model

SUM OF SQ

DF

MEAN SQ

F

SIG

1 Arrested development113.

917618.9863.640.002Residual1743.2173345.219Entire1857.1373405.

462Forecasters: ( Constant ) , conenv, riskmgt, mont, codificationDependent variable: AutopsyTables 4a, 4b and 4c show the analysis of discrepancy ( ANOVA ) of the variables. With F- values of 43.82 ( sig 0.

000 ) , 2.59 ( 0.018 ) and 3.64 ( 0.002 ) for REP, LIQ and PM as fiscal public presentation indexs of the survey severally, it clearly shows that there is a strong relationship between the dependent variables ( REP, LIQ and PM ) and the four independent variables ( control environment, hazard direction, monitoring and mention to international internal control codification ) at 1 % , 5 % and 10 % statistical important degrees.Table 5: Coefficient estimations Dependent Variables

Independent Variables

Dependent Variables

Rep

LIQ

Autopsy

Conenv.

144[ 0.020 ] *( 0.000 ).174[ 0.139 ] *( 0.003 ).210[ 0.

118 ] ***( 0.075 )Riskmgt.297[ .047 ] *( 0.000 )-0.

375[ 0.139 ] *( 0.007 )-0.973[ 0.282 ] *( 0.001 )Mont.

0155[ .046 ]( 0.733 )-0.113[ 0.132 ]( 0.393 )-0.

684[ 0.269 ] **( 0.011 )Code.3113[ .072 ] *( 0.000 )-0.

276[ 0.208 ]( 0.187 )0.570[ 0.424 ]( 0.180 )Changeless-.1661.2710.

782R20.40410.04260.0514Adjusted R20.39700.03120.0401F – Statisticss ( 4, 336 )56.953.

744.55P & gt ; F0.00000.00550.0014No of observations341341341St mistake are shown in the signifier [ ] , while the p – values are in the signifier { }* , ** , *** indicate statistical significance at 1 % , 5 % and 10 % severally.Table 5 shows the consequences of the coefficient estimations. The control environment has a coefficient of 0.

144. This indicates a positive relationship between it and REP and is statistically important at 1 % , 5 % and 10 % degrees. Similar consequence is shown for hazard direction and codification.

However supervising variable shows a positive relationship between the REP but is non statistically important ( sig 0.733 )The tabular array farther reveals that both control environment and hazard direction are statistically important ( sig. 0.

003 and 0.007 severally ) but control environment is positively related to LIQ while the hazard direction is negatively related to LIQ. Though monitoring and mention to international codification is non important, they have negative relationship with the LIQ.

Again it can be seen clearly that control environment is positively related to PM and is important ( sig 0.075 ) , whiles hazard direction and monitoring variables are negatively related to PM and are besides important ( sig 0.001 and 0.011 severally ) .By analysing, the descriptive tabular arraies and the tabular array 5 above it is clear that the control environment has a positive relationship with the three public presentation indexs and is important with all the public presentation indexs used in the survey at 1 % , 5 % and 10 % degrees severally.

The consequence above seem to certify to Whittington and Pany ‘s findings that control environment set tone of the organisation even in a non-regulatory internal control environment. DeZoort et all. , 2002 defined in his work that control environment which is reflected by the audit commission aims at “ protecting the proprietors ‘ involvements by supervising direction ‘s actions, in footings of fiscal coverage, hazard direction and internal control ” . Hence proprietors ‘ involvements can merely be protected through answerability and accurate coverage of fiscal statement. It is hence clear that control environment is extremely related to fiscal public presentation and therefore our hypothesis one ( H1 ) , there is a important relationship between the control environment and company fiscal public presentation on Ghana stock exchange market is accepted.From the hazard direction position, though it is seen as important in all the three public presentation indexs it is merely positively related to describing But the instance is different for liquidness and net income border as it negatively associate to and at a important degree. The negative relationship with liquidness besides confirm that when a houses ‘ hazard direction system is less effectual, it increases the current ratio of that house much higher that it gives an feeling that most of the house ‘s fiscal resources are idle and could negatively impact the fiscal public presentation of that house.

The two deductions thereby attest to most of the surveies carried out that hazard direction has positive effects on the fiscal development of houses ( Abdulazzi et al. , 2012 ) .Though the relationship between hazard direction and net income border is negatively related, it merely attest to the fact that most listed companies in Ghana stock exchange do non describe in their one-year fiscal statement their hazard direction activities due to the stiff competition they faced in the market even though their direction might utilize their experience or traditional method in covering with most of the hazard the concern might confront. On history of hazard direction and fiscal public presentation, the 2nd hypothesis ( H2 ) there is a relationship between hazard direction and company public presentation on Ghana stock exchange market is accepted in the instance of coverage and liquidness but rejected in the instance of profitableness.COSO ‘s study on supervising counsel suggests that an effectual monitoring system put in topographic point by a company may assist better the internal control system which in bends increases the likeliness of the organisation in achieved its set aims hence increases its fiscal public presentation. But our statistically analysis does non back up this averment even though the coverage and liquidness degree seems to certify to COSO ‘s study, but they are all non important ( sig 0.733 and 0.393 severally ) .

Again the net income border which is important at 0.011 has a negative relationship with the monitoring which does non back up the averment of COSO that effectual monitoring installed seeks to better fiscal public presentation of a house. And therefore most listed houses on the Ghana stock exchange market do non supervise efficaciously their internal control mechanisms that they have installed in their company therefore Our 3rd hypothesis nevertheless, H3 = there is a important relationship between the monitoring and the company public presentation is rejected.

But this confirm to the survey conducted by Joseph at el. , 2012 that reveals the failing in monitoring system put in topographic point by the listed houses in Ghana stock exchange market. On history of mention to the internal codification, it is clear that houses that structured their internal control system based on international criterion perform financially good than those that do non.

The statistically analysis shows a positive relationship between coverage and mention to international codification and is important ( sig 0.000 ) bespeaking that houses fiscal public presentation additions when they employed international internal control codification. Though similar reading can be deduced from liquidness and net income border, they are non statistically important in this survey. Hence internal control mechanisms affects fiscal public presentation of listed houses in Ghana stock exchange market can be accepted.

5.4 Relationship between Internal Control and Financial Performance

This subdivision answers the last hypothesis and the chief aim of the survey. The relationship between the internal controls and fiscal public presentation of listed companies in the Ghanaian stock exchange market was examined utilizing control environment, hazard direction, monitoring and mention to international codification as indexs of internal control whilst coverage, liquidness and net income border were common steps of fiscal public presentation.

Table 6 Pearson ‘s Correlation analysis at 0.05 important degree.

The correlativity tabular array presents the relationship between internal controls measured by control environment, hazard direction, monitoring and mention to international codification as against steps of fiscal public presentation.

The consequences show that control environment that set the tone for every organisation relates positively to fiscal public presentation. However the staying indexs ; hazard direction, monitoring and codification relate positively to describing but negatively to liquidness and net income border. This can be attributed to the less factors examined under hazard direction and monitoring as a consequence of the information available.The consequence in general footings shows that there is a relationship between internal control and houses ‘ fiscal public presentation and hence strong internal control must be installed in all the listed companies to heighten public presentation.

5 CONCLUSIONS AND FUTURE RESEARCH

5.1 Decision

There is no uncertainty that several ranges have been conducted and there are still on – traveling surveies on the scrutiny of the relationship between houses ‘ fiscal public presentation and internal control mechanisms in organisations but the consequences of these surveies are assorted.This survey specifically examines the relationship that exist between house public presentation, utilizing three fiscal indexs ( REP, LIQ and PM ) and four internal control mechanisms ( control environment, hazard direction, monitoring and mention to international codification ) . Sample size of 30 ( 30 ) listed houses on Ghana Stock exchange between 2000 and 2010 was used.

The survey employs multiple arrested developments and the method of appraisal was OLS. However, the survey reveals the undermentioned results:There is a positive and important relationship between control environment ( an internal control mechanism ) and all the three fiscal indexs ( REP, LIQ and PM ) used in the survey.There is besides a important relation between hazard direction and the three fiscal indexs merely that it relates positively to merely describing pieces it relate negatively to both LIQ and PMMonitoring factor is negatively related to PM and is statistically important excessively but it has no important relationship with REP and PMThere is positive and important relationship between codification and coverage but it has no statistically important relationship with LIQ and PM.Listed houses on Ghana stock exchange markets have their ain internal control mechanisms installed in topographic point and hence choses to describe on it or non.

5.2 Restrictions

As a consequence of clip and resources restraints, it was impossible for the research worker to use primary informations aggregation techniques where welled worded questionnaires will be developed and administered every bit good as interviews conducted to the top degree direction of all the listed companies on the exchange market to determine the being of the internal control mechanisms in their several outfits. Hence the research worker belies that some companies might hold the system in topographic point working more absolutely but failed to describe it in their one-year statement.More besides though companies in Ghana are non mandated to give one-year study on the effectivity of their internal control system, it is possible that those companies who tries describing it might non besides report suitably the consequence of their monitoring which might besides impact the result of this survey.

Finally, people might non read this work hence might non acquire the benefits of this survey. However, the purpose of the research worker will be to step out a small higher with this subject through authorship of documents and perchance making presentation in conferences in the close hereafter.

5.

3 Future Research

More research should be conducted into the hazard direction activities and monitoring of internal control system of the listed companies in the stock exchange market and associate it to how it affects their public presentation. And besides future researches should increase the sample size to even analyze the little and average graduated tables houses in Ghana. This is because these classs of houses account for near to 75 % of the entire figure of houses in the state.Again future surveies in the same country attempts should be put in topographic point to increase the internal control mechanisms variables recommended by the international codification like COSO so as to do the result of the survey to be more robust.

Recognitions

First of all, cubic decimeter will wish to that this chance to thank all people who made a part in my academic life up to this degree.I would wish to show my sincere dear gratitude to my supervisor, Prof Yang QingXiang, for her support and encouragement throughout the authorship of this thesis. Prof Yang, you so restored hope back in me at the clip cubic decimeter felt hopeless ; a can make spirit that lead me through to the terminal. Yes no sum of words can show my sincere gratitude for your eternal moral and academic support during my research period.

May you find favour and fortune in all your hereafter enterprises.I am besides greatly indebted to all the lectors ( professors ) of school of direction, the full staff and the 2010/2012 academic twelvemonth international pupils for doing my two old ages analyzing in Wuhan worth life.I take this chance besides to thank my full atomic household back place in Ghana for their attention, love and encouragement shown me during my two old ages of survey in China. I am peculiarly indebted to my Dad ; Jacob Kwesi Agboado and my loving sisters Belinda and Lucky for their sound fiscal support for my stay here in Wuhan. May the good Lord amply reward you in multiple creases.Last but non least, my warmest respects and approvals go to HUST Bible Study Group members for your supplications and positive parts made to my life. God bless you all.