Browsing by Author "Workineh, Tesfaye"

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    The Effect of Internal Control on Financial Performance: The Case of Selected Privately Owned Manufacturing Share Companies in Addis Ababa
    (Addis Ababa University, 2019-06) Workineh, Tesfaye; Habtamu, Berhanu (PhD)
    The existence of an organization in a turbulent and dynamic business environment, among other factors, depends largely upon the internal control system in place. The main objective of the study was to seek the effect of internal control system on the financial performance privately owned manufacturing share companies. To achieve the objective of this study, the research employed a quantitative research approach. A total of 46 employees in the department of finance and internal audit departments in four privately owned manufacturing firms were involved by the survey where the response rate was 89%. Exploratory research design was used and the survey data were collected using structured questionnaires and the recent five years audited financial statement of the sample firms. To test the relationship between internal control elements namely control environment, control activity risk assessment, information & communication and monitoring activity that were used as independents variables (predictors) with financial performance of privately owned manufacturing firms, correlation analysis were adopted. The findings of the study were that internal control systems had positive relationship with financial performance of privately owned manufacturing share companies but the study revealed that some components of internal control systems had insignificant contribution to the financial performance of a manufacturing firm. Recommendations were made to privately own manufacturing firms to strength their monitoring activity and to pay attention to maintain strong control environment to improve the financial performance of their firms.