Impact of Internal Control System on Profit Performance of Commercial Banks

Filed in Banking and Finance Project Topics by on October 22, 2020

Impact of Internal Control System on Profit Performance of Commercial Banks. 

ABSTRACT

This study primarily aims at finding out the impact of internal control system on  the profit performance of commercial banks in Nigeria with an empirical study on Orient Bank of Nig. Plc and United Bank of Africa Plc.

Internal control systems impact on commercial banks might be as a result of non- adherence to the system or stringent, inflexible adherence on the system.

These two extremes will invariably have adverse effect on the profit performance of the commercial banks and as such the management will always try to strike a  balance or trade-off  for  their profit maximization.

The paper therefore tends to evaluate the extent of adherence to internal control system, its impact on the profit performance of OBN PLC and UBA PLC and control strategies to be adopted to revitalize or moderate the system.

This project is divided into five (5) chapters – Chapter One: This is the introductory chapter that provides information about internal control system.

This chapter gives insight of the problem identification, objectives and significant of study, hypothesis to be tested and scope and limitations of the study.

Chapter Two: This is the Literature Review which makes good references to people that carried out the studies on internal control.

It includes the importance  and  qualities  of good internal control and also qualities expected of bank staff. Chapter Three: This includes Research design, scope and methodology.

Chapter Four: This involves presentation and analysis of data collected. Chapter Five: This includes the Summary, Recommendation and Conclusions.

INTRODUCTION

Internal control is the set of accounting and administrative control and practices  that helps managers in operating their organization more effectively and efficiently.

It ensures that both the accounting and administrative activities are in order with the laid down procedures, standards, and statutory requirements. It also detects deviation  if any and calls for immediate corrective measure.

In any profit oriented organization, the objective of management is to maximize profit, and internal  control  is a technique  that can be of assistance in attaining such maximizations.

Banking is a venture undertaken primarily for profit and whose operation should at least include taking money on account and releasing of such money wholly or partly on demand or authority of the depositor.

An important object of banking particularly in the developing countries is the promotion of economic development.

In pursuance of this economic development as well as banks’ profitability, banks tends to improve on their services by devising methods of sound and effective system of internal control.

BIBLIOGRAPHY

AICPA, Codification of Statement on Auditing Standards No 1-23 Commerce Clearing House, Illionis, 1979

Alderman E.C and Deitrick T.O “Internal Audit Impact of Financial Information Reliability” The Internal Auditor, South-Western Pub.Co Illinois, 1981.

Corns C. Marshall, How to Audit A Bank Boston: Banker publishing company, 1971.

Cushing Barry, Accounting Information and Business Organization, 2nd Ed. Addison Wesley Pub. Co. Reading 1978.

Cyasi kwame, An international Guide to Auditing, 1ST Ed., United Kingdom: Fraham Buru,1982.

Duncan G.M, “Dishonesty among Stores Clerks” Sociology and Socail Research 1948.

CSN Team.

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