Evaluating the effect of internal control systems on organizational performance in Zambia’s mining sector: Evidence from Konkola Copper Mines, Chingola

Résumé

Internal control systems are globally recognized as critical mechanisms for ensuring financial accountability, operational efficiency and regulatory compliance. Mining contributes over 70% of Zambia’s export earnings.  However, governance and accountability challenges raise concerns about the robustness of internal control mechanisms. This study evaluates the effectiveness of internal control systems on organizational performance at Konkola Copper Mines (KCM) in Chingola. Guided by the Agency and Stakeholder Theories, the study employs a convergent parallel mixed-methods design. Structured questionnaires were used for quantitative data collection while interviews, were used to collect qualitative data. The target population comprised of accounting staff, internal auditors, finance officers and administrative managers. The sample size was 234 participants selected using purposive sampling. The study used a mixed-methods approach. Qualitative data was analyzed using thematic analysis while quantitative data was analyzed using the statistical package for social sciences, SPSS and presented in tables. The qualitative findings revealed that the control environment at KCM is not robust. Interviewees emphasized that internal controls do not receive adequate attention. They reported that risk management systems are ineffective and that control activities and Information and Communication Technology (ICT) systems were inconsistently applied. Interviewees emphasized that monitoring activities are not effective enough. The quantitative findings revealed that the control environment, risk management systems, control activities and financial reporting effectiveness have a positive and statistically significant correlation with organizational performance. Similarly, transparency and accountability showed a positive and statistically significant correlation with organizational performance. The study concluded that internal control systems at KCM are not robust. The study recommends that management at KCM should strengthen and consistently enforce internal control systems by establishing clear financial control policies, using updated communication systems, standardizing control activities, strengthening the internal audit function through independence from management influence and conducting regular risk assessment integrating them into strategic planning.