ASSESSMENT OF INTERNAL CONTROL IN COMMERCIAL BANK OF ETHIOPIA (CBE)

Abstract

This paper was conducted to make an assessment of internal control in Commercial Bank of Ethiopia (CBE) in ensuring effectiveness and efficiency of operations, reliability of financial reporting, compliance with applicable laws and in reducing risks. Banks have been expanding their operations and activities beyond the domestic borders as a result of globalization and improved technology. The study has taken 81 branches as a sample by using purposive sampling to contain all clustered branch groups which are Grade I, II, III and IV branches. Primary sources of data were employed using questionnaire and structured interview; and frequency tables were used as the analytical techniques in analyzing the collected data through descriptive research design. After analyzing the collected data, the study has concluded that the bank’s internal control has a few gaps in communicating control information to stakeholders regarding effectiveness and efficiency of operations, reliability of financial reporting, compliance with applicable laws and in reducing risks. As a result, the researcher has given some recommendations so as to provide input for areas of control which needs more attention and due to ongoing process nature of the internal control like; creating awareness for employees about the guidelines and procedures of the bank, strengthening the strategy to identify and response to risks and documented policies and procedures should strictly followed by the bank society in order to attain the bank’s objectives. There is also need to ensure that there are corrective or appropriate actions taken after control findings and recommendations