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The Effectiveness of Internal Controls in Rural Community Banks: Evidence from Ghana

Du Jianguo, Rauf Ibrahim, Peter Lartey Yao, Rupa Jaladi Santosh and Amponsah Clinton Kwabena

Business Management and Strategy, 2019, vol. 10, issue 1, 202-218

Abstract: Internal control is relevant in every business establishment, though its presence may not be a guarantee that fraud and corporate scandals would cease to occur. From the rural banking communities in Ghana, this study examines the significance of internal control element on the performance of elected rural banks. The statistical analysis and inferential judgment is based on the responses gathered from 650 bank employees on the functioning of internal controls. Based on the quantitative results and analysis, the study found a highly significant relationship between internal controls and performance of banks with respect to the principles prescribed by the Committee of Sponsoring Organization of the Treadway Commission framework –COSO. There exist a very strong internal control systems in the rural banks of Ghana, however monitoring, control activities and issues of corporate governance need to be addressed.

JEL-codes: R00 Z0 (search for similar items in EconPapers)
Date: 2019
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