Assessment of the Impact of the Effectiveness of Internal Control Systems on Fraud Prevention and Detection in Global Bank Ethiopia S.C
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Date
2024-06-03
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A.A.U
Abstract
This research aimed to evaluate the effect of Global Bank Ethiopia's S.C (GBE) internal
control system in deterring fraud. Specifically, the research investigated the primary
causes of fraud within GBE, assessed the implementation of internal control mechanisms,
and evaluated their success in detecting and preventing fraudulent activities. A structured
questionnaire was used as a primary data collection instrument to select employees of
GBE by purposive and convenient means. Items of the questionnaire were measured on
the ranking scale. 57 employees from ten branches and audit department of the bank
were sampled. The research investigated various components of GBE's internal control
framework, including the control environment, risk assessment procedures, implemented
control activities, information flow and communication protocols, and monitoring
practices. Data analysis was done using descriptive and inferential statistics. The
research found that employees of the bank perceived that; poor internal control system,
presence of unqualified staff, inadequate staffing, poor record-keeping practices, and
inadequate training and re-training of staff among others were the main causes of fraud.
All aspects of internal control system were strongly implemented and practiced by the
bank. Internal control system was effective in controlling fraud in the bank in various
forms. Fraud had negative and insignificant effect on the performance of the bank. The
research recommends the continuous practice of the internal control system to ensure
that fraud of any form is reduced to the barest minimum.