Internal control system over cash: In the Case of Commercial Bank of Ethiopia Sebeta cluster branch.

Abstract

This study's primary purpose was to assess the internal control over cash at Commercial Bank of Ethiopia (CBE) Sebeta cluster branches. For this study, the researcher used both quantitative and qualitative methods. In this study, both closed- and open-ended questionnaires were used, and a total of 117 samples were chosen. To select samples from the total staffs simple random sampling technique was used for the operational staffs and judgmental sampling techniques was considered for the middle and above staffs. These respondents were given the questionnaire, which was collected at a rate of 96.6 percent (113 respondents). Cronbach's alpha was used to determine the reliability of the questionnaire when utilizing five Likert scales. The alpha result of 0.83 indicates that the questionnaire was reliable. The empirical result based on the mean score indicates that the majority of respondents are in agreement that there is segregation of duties and responsibilities in the area of cash and cash-related activities, that transactions are recorded in a timely manner, that the current cash management system protects cash from misappropriation, and that CBE uses sequentially pre-numbered or computer-generated receipt forms to establish accountability for each cash transaction. There is division of tasks, there is a check and balance system of cash transactions, there is dual control of cash vaults, there is a trustworthy and robust internal control system, and each transaction is signed by the head cashier and the teller, according to the majority of respondents. The major deficiency in CBE's internal control over cash consists of cash shortages, non-continuous surprise checks, and a lack of controlling cash holding restrictions. The majority of respondents agree that the cash management procedure, which helps CBE control cash misuse, is relevant. Based on the empirical findings the researcher recommends that CBE better to develop surprise checks on regular basis on internal control over cash and better to reconsider the cash holding limits which may have negative implication on its day to day activities when cash shortage happens.