@article{10.11648/j.jfa.20221006.12,
  author = {Wilson Bashaija},
  title = {The Effect of Internal Control Systems on the Financial Performance of Commercial Banks in Rwanda},
  journal = {Journal of Finance and Accounting},
  volume = {10},
  number = {6},
  pages = {244-252},
  doi = {10.11648/j.jfa.20221006.12},
  url = {https://doi.org/10.11648/j.jfa.20221006.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20221006.12},
  abstract = {Internal control systems play an important role in any organization as they help achieve financial performance goals. Internal controls minimize risk, protect assets, ensure record accuracy, increase operational efficiency, and facilitate compliance with policies, rules, regulations, and laws. The main purpose of the study was to investigate the impact of the internal control system on the financial performance of commercial banks in Rwanda. The study was guided by the following goals and purposes; to investigate the relationship between the internal control environment on the Financial Performance of Commercial Banks in Rwanda and to establish the effect of risk management on the Financial Performance of Commercial Banks in Rwanda. Most commercial banks in Rwanda have been poorly performing in recent years due to weak internal control systems, records management, financial reporting, and regulatory compliance. In this study, we adopted a system theory and agency theory. The study adopted a descriptive research design using both quantitative and qualitative approaches. The study adopted a target population of 96 and multi-level random sampling of 38 Senior Managers in various categories. Survey data was collected using a structured questionnaire. The data obtained were analyzed using both qualitative and quantitative analysis. Multiple regression models were used to test whether the internal control environment and risk management have an influence on the Financial Performance of Commercial Banks in Rwanda. It was found that an internal control system had a significant relationship with Financial Performance. Based on the research findings, it can be concluded that an internal control system is a significant positive predictor of Financial Performance. The results of the study suggest that internal control systems, especially risk management and control environment, are important areas where commercial banks should pay close attention to improving Rwanda's financial performance. The results are valuable to commercial bank investors and are expected to provide the basis for improving the financial performance of commercial banks. Management also needs to ensure that the organization has a strong internal control environment in which internal control activities properly inform policies and procedures. Managers need to maximize the economic benefits of internal control by using corporate risk management and good corporate governance.},
 year = {2022}
}

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TY  - JOUR
T1  - The Effect of Internal Control Systems on the Financial Performance of Commercial Banks in Rwanda
AU  - Wilson Bashaija
Y1  - 2022/11/22
PY  - 2022
N1  - https://doi.org/10.11648/j.jfa.20221006.12
DO  - 10.11648/j.jfa.20221006.12
T2  - Journal of Finance and Accounting
JF  - Journal of Finance and Accounting
JO  - Journal of Finance and Accounting
SP  - 244
EP  - 252
PB  - Science Publishing Group
SN  - 2330-7323
UR  - https://doi.org/10.11648/j.jfa.20221006.12
AB  - Internal control systems play an important role in any organization as they help achieve financial performance goals. Internal controls minimize risk, protect assets, ensure record accuracy, increase operational efficiency, and facilitate compliance with policies, rules, regulations, and laws. The main purpose of the study was to investigate the impact of the internal control system on the financial performance of commercial banks in Rwanda. The study was guided by the following goals and purposes; to investigate the relationship between the internal control environment on the Financial Performance of Commercial Banks in Rwanda and to establish the effect of risk management on the Financial Performance of Commercial Banks in Rwanda. Most commercial banks in Rwanda have been poorly performing in recent years due to weak internal control systems, records management, financial reporting, and regulatory compliance. In this study, we adopted a system theory and agency theory. The study adopted a descriptive research design using both quantitative and qualitative approaches. The study adopted a target population of 96 and multi-level random sampling of 38 Senior Managers in various categories. Survey data was collected using a structured questionnaire. The data obtained were analyzed using both qualitative and quantitative analysis. Multiple regression models were used to test whether the internal control environment and risk management have an influence on the Financial Performance of Commercial Banks in Rwanda. It was found that an internal control system had a significant relationship with Financial Performance. Based on the research findings, it can be concluded that an internal control system is a significant positive predictor of Financial Performance. The results of the study suggest that internal control systems, especially risk management and control environment, are important areas where commercial banks should pay close attention to improving Rwanda's financial performance. The results are valuable to commercial bank investors and are expected to provide the basis for improving the financial performance of commercial banks. Management also needs to ensure that the organization has a strong internal control environment in which internal control activities properly inform policies and procedures. Managers need to maximize the economic benefits of internal control by using corporate risk management and good corporate governance.
VL  - 10
IS  - 6
ER  - 

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