Evaluating the effects of Internal Control in the Operations of financial institutions: A Case Study of Bond Savings and Loans.
The major cause of serious banking challenges continues to be ineffective internal control system for core processes. These policies determine the reliability and integrity of data for operational efficiency to achieve strategic goals and objectives. They are established to ensure management has accurate, timely and complete information for effective decision making. The objectives of this study are to: examine the components of internal control system; assess the effectiveness; analyse the challenges of internal control system; and evaluate the effects of the internal control system on the operations of Bond Savings and Loans Ltd. This research adopted descriptive design and quantitative approach. The data collection instrument used was questionnaire. The population of the study were staff of Bond Savings and Loans Ltd in Kumasi. The population size was twelve (12). Data was collected from the entire population. The study discovered that Bond has adopted a hybrid control framework (COSO, CoCo, and CobiT frameworks) and that the Board of Directors and Management of Bond only are responsible for formulating internal control policies. It was revealed that the control systems of Bond are highly strong and effective. The study found out that: the inability of the control system to detect people who do not comply with control policies; inadequate physical control measures and procedures over the company‘s assets to protect those assets against theft and unauthorised access are some of the challenges of Bond‘s internal control systems. It was also discovered that the control system had led to positive financial and non-financial performance at Bond. Some of the major recommendations made include: Bond should involve staff in the formulation of control policies and also, the company should conduct regular control system reviews.
A thesis submitted to the department of finance School of Business, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirements for the degree of Master of Business Administration (Finance).