Date

11-13-2024

Department

Graduate School of Business

Degree

Doctor of Business Administration (DBA)

Chair

Christopher J Demaline

Keywords

Internal controls, Ethiopian banks, COSO framework

Disciplines

Accounting | Business

Abstract

Adequate internal controls enhance an organization's likelihood of achieving objectives in a changing business environment, contribute to organizational growth and competitiveness, support compliance with regulatory requirements, and help in preventing and identifying fraud, embezzlement, and waste. This qualitative case study explored the potential lack of adequate internal control systems in Ethiopian banks that impact their operational and financial performances. The study sought to understand how these banks design and implement internal controls and to identify factors contributing to the potential lack of adequate internal controls. The study was guided by the COSO internal control framework, which is widely accepted for understanding internal control concepts and for assessing, designing, implementing, and maintaining adequate internal controls. The study used a purposive sampling method to select two commercial banks, with a sample size of 13 participants. The participants were chosen based on their roles and responsibilities in the banks' internal control design and implementation. The data analysis revealed five main themes addressing the research questions. The study found that Ethiopian banks have an adequate internal control system except for weaknesses in the areas of the control environment, risk assessment, and control activities. The study also suggested areas for further research and put forward three recommendations. These include an in-depth study on internal control weaknesses related to digital banking and their impact on Ethiopian banks' operational and financial performances, an in-depth study of the banks’ control environment, and a study exploring Ethiopian banks' enterprise risk management (ERM) design and practices using the COSO ERM framework.

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