Birhanu, Habtamu (PhD)Bekele, Rahel2018-06-292023-11-082018-06-292023-11-082017-01http://etd.aau.edu.et/handle/123456789/4758Effective internal control system can play a very crucial role in every organization to realize organizational goals, one of which is achieving financial performance objectives. The main purpose of this study was to determine the impact of internal control systems on financial performance on Ethiopian shipping and Logistics Services Enterprises as a case study. Specific objectives include evaluating the existing internal control system in the organization and investigating the relationship between the five internal control elements and financial performance. The study used explanatory research design research design by using both descriptive and quantitative methods where primary data is collected using Likert-scale questionnaires distributed and interviews made with employees in the finance department. Secondary data was gathered from company's financial statements and publications. The dependent variable was financial performance measured in-terms of profitability and ROA. The predictors or independent variables were the five elements of internal control system, control environment, control activities, risk assessment, monitoring and information and communication. The target population was 40 employees in the finance department and census design was adopted. The study period covers 9 years 2005-2013. Effectiveness of the elements of internal control system was analyzed from the descriptive statistics result. Multiple regression analysis was done to determine the relationship and the significance level of elements of internal control system towards financial performance. The result revealed that internal control system contributed only31% variation on financial performance. The descriptive result shows there is weak internal control system in the organization. The study recommend more commitment by the management in monitoring internal control system and continue working on improving for the effectiveness of the internal control system so, the company will achieve better performanceen-USServices enterpriseShippingLogisticsThesis