Perceptions on Internal Control System and Financial Performance; Evidence from Commercial Banks in Ethiopia
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Date
2018-06
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Addis Ababa University
Abstract
Internal Control Systems play an important role in every organization as they assist in realization
of their performance goals. The main objective of the study was to assess the Perception of internal
control systems on financial performanceof commercial banks in Ethiopia. The study adopted a
mixed research approach. The quantitative component used survey of employees working in 8
commercial banks in Ethiopia. A random sampling of 240employees in internal audit, finance and
internal control departments were covered by the survey; the response rate was 90%. Survey data
was collected by use of a structured questionnaire. Multiple regression models were used to test
whether internal control activities, risk management, monitoring, corporate governance have any
relation withfinancial performance. As part of the qualitative component interviews with internal
audit and internal control manager were held. It was found that internal control systems had a
significant relationship withfinancial performance. The findings of the study suggested that internal
control systems especially corporate governance and control activity are important areas that
management of commercial banks should give attention to improve financialperformance of
commercial banks in Ethiopia.
Description
A Thesis Submitted to the School of Graduate Studies of Addis Ababa University
in Partial Fulfillment of the Requirements for the Degree of Master of Science in
Accounting and Finance.
Keywords
Financial performance, Internal control