The objective of the research was to establish the Effect of Internal Controls on Financial Perfo... more The objective of the research was to establish the Effect of Internal Controls on Financial Performance of Commercial Banks in Kenya. Internal Controls were measured using the five elements of internal control as stipulated by the Committee of Sponsoring organizations of Treadway Commission framework of internal controls while Financial Performance was measured using the historical average of Return on Equity. A descriptive research design was adopted due to its ability to describe the relationship between elements of Internal Controls and Financial Performance. The study used the 43 commercial banks in Kenya. Primary data was collected using a structured questionnaire. Descriptive statistics obtained from data analysis were presented using frequency tables, while inferential data findings were presented using correlation and regression tables. The study findings revealed that the banking sector enjoys a strong financial performance partly because of implementing and maintaining effective internal controls. The existence of effective internal control is attributed to the highly regulated and structured environment in the banking sector. The study recommends banks should effectively implement and maintain internal controls due to the nature of the riskiness of the banking sector and its impact on financial performance.
The current corporate trends have made it imperative for most of the large organizations to uphol... more The current corporate trends have made it imperative for most of the large organizations to uphold effective internal control systems. Whereas institutions of higher learning in Puntland state of Somalia have implemented systems of internal control, it is not clear whether they help them to achieve the various financial goals. The main objective of this study was to establish the effects of internal control systems on the financial performance of Higher Learning Institution in Puntland. Internal controls were looked at from the perspective of Information and communication systems, Internal Audit and Monitoring and Financial performance as dimension. The research was conducted using quantitative survey design. A sample size of 30 respondents was used for the study. Data was collected using Questionnaires. Correlation and regression analysis were employed to generate the findings. The study found that management of the institution is committed to the control systems, actively participates in monitoring and supervision of the activities of the Universities, communications systems are in place. The internal audit department is efficient, is staffed, conduct regular audit activities and produce regular audit reports. It was further revealed that there is a clear separation of roles, weaknesses in the system are addressed, and monitoring has helped in assessing the quality of performance of the institution over time. However, the study also found out that there is lack of
The objective of the research was to establish the Effect of Internal Controls on Financial Perfo... more The objective of the research was to establish the Effect of Internal Controls on Financial Performance of Commercial Banks in Kenya. Internal Controls were measured using the five elements of internal control as stipulated by the Committee of Sponsoring organizations of Treadway Commission framework of internal controls while Financial Performance was measured using the historical average of Return on Equity. A descriptive research design was adopted due to its ability to describe the relationship between elements of Internal Controls and Financial Performance. The study used the 43 commercial banks in Kenya. Primary data was collected using a structured questionnaire. Descriptive statistics obtained from data analysis were presented using frequency tables, while inferential data findings were presented using correlation and regression tables. The study findings revealed that the banking sector enjoys a strong financial performance partly because of implementing and maintaining effective internal controls. The existence of effective internal control is attributed to the highly regulated and structured environment in the banking sector. The study recommends banks should effectively implement and maintain internal controls due to the nature of the riskiness of the banking sector and its impact on financial performance.
The current corporate trends have made it imperative for most of the large organizations to uphol... more The current corporate trends have made it imperative for most of the large organizations to uphold effective internal control systems. Whereas institutions of higher learning in Puntland state of Somalia have implemented systems of internal control, it is not clear whether they help them to achieve the various financial goals. The main objective of this study was to establish the effects of internal control systems on the financial performance of Higher Learning Institution in Puntland. Internal controls were looked at from the perspective of Information and communication systems, Internal Audit and Monitoring and Financial performance as dimension. The research was conducted using quantitative survey design. A sample size of 30 respondents was used for the study. Data was collected using Questionnaires. Correlation and regression analysis were employed to generate the findings. The study found that management of the institution is committed to the control systems, actively participates in monitoring and supervision of the activities of the Universities, communications systems are in place. The internal audit department is efficient, is staffed, conduct regular audit activities and produce regular audit reports. It was further revealed that there is a clear separation of roles, weaknesses in the system are addressed, and monitoring has helped in assessing the quality of performance of the institution over time. However, the study also found out that there is lack of
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