| Fraud and corruption cases, involving organizations such as Enron, WorldCom, Tyco, United Way, and Red Cross, have raised awareness of and demand for financial accountability by stakeholders. Internal control principles suggest one way to demonstrate accountability is through the use of a strong accounting internal control system. This research examined internal control principles and components, along with the history of fraud and corruption. It then measured accounting internal control systems within U.S.-based non-governmental organizations (NGOs) with field offices in West Africa to determine their effectiveness in deterring, preventing and detecting fraud and corruption while providing the accountability stakeholders demand. The data indicate weaknesses exist in these NGOs' internal control systems; the NGOs have not capitalized on the strengths of strong internal control system components; and, their operations in international settings need stronger internal control systems. Finally, the data were compared with Transparency International's 2006 Corruption Perceptions Index for validity. This comparison suggests the findings are valid and NGOs operating in the most corrupt countries of the world are at greater risk of internal control failure and becoming victims of fraud and corruption. |
