INTERNAL CONTROLS AND ORGANIZATIONAL PERFORMANCE IN SELECTED NON GOVERMENTAL ORGANIZATIONS IN MOGADISHU, BANADIR SOMALIA

Background Historically some types of internal controls date back thousands of years. As mentioned earlier, the Greeks, Romans, and Egyptians were conducting internal controls through audits before the birth of Christ. Interestingly, the scope of these early controls was in many ways akin to that of modern internal audits; both included an examination of the correctness of accounting records and an evaluation of the propriety of activities reflected in the accounts. Emphasis was on improving management control over the activities of the organization. Such broad emphasis was not to reappear on a wide scale until after World War II (Institute of Internal Auditors, 2005). In the United States, there was little need for internal controls in the colonial period because there was little in the way of large industry. In fact, accounting textbooks of the period never referred to the subjects of internal auditing or internal control. In government, however, the need for an audit function was recognized. The first U.S. Congress in 1789 approved an act that included a provision for the appointment of a secretary of the treasury, a comptroller, and an auditor. Krupp apparently employed some type of internal audit staff at least as early as 1875 since there is a company audit manual dated January 17, 1875, which includes the following provisions: The auditors are to determine whether laws, contracts, policies and procedures have been properly observed and if all business transactions were conducted in accordance with established policies and with success. In this connection, the auditors are to make suggestions for the improvement of existing facilities and procedures, criticisms of contracts with suggestions for improvement, etc (Institute of Internal Auditors, 2005).