ASSESSMENT OF INTERNAL CONTROL SYSTEM: A CASE OF DEVELOPMENT BANK OF ETHIOPIA BY ALEMAYEHU GETANEH

Abstract

This study assesses the internal control system: a case of development bank of Ethiopia. The study used explanatory design and quantitative research approach. Primary data was used. The collected data were taken the dispatched questioner from the bank staff. Hence the total population was seventy four (74), of which 59 (80%) were male respondents, whereas the rest 15 (20%) were female respondents. The study covers the components of internal control such as Control activities, Control environment, risk assessment, information & communication, and monitoring. In the study, descriptive method was used to assess the components of internal control. The paper reveals that the mean value of the components is less than three which is lower in the standard out of the total respondents 80%, 82%, 82%, 83% and 86 % of them were disagree on strengthen of the Bank`s internal control system in terms of control environment, monitoring activity, control activity, information system and risk assessments respectively. The policy implications of the study suggest that Development Bank of Ethiopia should properly segregate the duties, safeguarded computer systems, proper review and approval process of credit, purchases & procedures. The bank should make periodic assessment and discussion by identifying, the bank`s risk tolerances, highest risk arising areas of both internal and external sources, and processes are should in place to minimize the identified risks. The bank management should install well structure computer processing procedures and it essential continuously communicate the data effectively to designated employees, , communicate effectively with a goal of influencing the control consciousness of its employees, finally evaluating the ongoing process and assessing the systems.