| dc.description.abstract | The study examined the effect of internal controls on the financial performance of commercial
banks in Uganda with Centenary Bank (U) Limited as a case. It was guided by four research
objectives which were; the relationship between control environment and financial performance
of commercial banks in Uganda, the relationship between control activities and financial
performance of commercial banks in Uganda, the relationship between monitoring and
evaluation and financial performance of commercial banks in Uganda and the relationship
between risk assessment and financial performance of commercial banks in Uganda.
The researcher used a cross-sectional survey design with both qualitative and quantitative
approach for data collection and analysis. Data was collected using questionnaires and
interviews.
The study was carried out at Centenary Bank (U) Limited with a target population of 340 and a
sample of 181 employees in Operations, Finance, Business development, Audit, Credit and
Branch staff working at the headquarters of Mapeera House. The researcher believed that this
categories of people were knowledgeable about the area of study and were able to avail the
necessary data about the study.
Stratified random sampling was used to select staff in Operations, Finance, Business
development, Audit, Credit and Mapera Branch staff who participated in the study.
Data was analysis involved use of percentages and mean, correlations and regressions to show
the magnitude of the relationship as well as the effect of the independent variables on the
dependent variables.
The Study findings revealed that there is a positive significant relationship between control
environment and financial performance of commercial banks in Uganda(Centenary Bank (U)
Limited) (r=0.776**, p=0.00), a positive significant relationship between Control activities and
financial performance of commercial banks in Uganda (Centenary Bank (U)
Limited(r=0.648**;p<0.001)), a positive significant relationship between Monitoring and
evaluation and financial performance of commercial Banks in Uganda(r=0.824**;p<0.001) and a
positive significant relationship between risk assessment and financial performance of
commercial Banks in Uganda(r=0.837**; p<0.001).
The findings further revealed that any improvement in internal controls would lead to 78.5%
variation in financial performance in commercial banks ( as per the adjusted R- square result)
and that other factors not considered in this study accounted for the remaining 21.5% variation in
financial performance of commercial banks.
The study recommended that the banks should effectively implement and maintain internal
controls due to the nature of the riskiness of the banking sector and its impact on bank‟s
performance and the general economic growth of the Country. The banks must have an
independent Board of Directors and its committee as a Corporate Governance regulatory
requirement. Besides this, an independent audit department that is well trained and staffed should
be set in all the branches of the banks to facilitate effective implementation of internal controls
with keen interest on risk assessment | en_US |
