Abstract:
Internal control systems in every organization are
paramount., both profit and not-for-profit organizations. The trend
of many banks in Kenya collapsing puts into question the ability
of the internal control systems to steer the commercial banks
stability and performance. The recent failures have put pressure on
the industry regulators and players to rethink how best the
institutions can align their internal control systems and compliance
as tools of ensuring stability and positive performance. This study
assesses the effect of internal control systems on financial
performance of selected commercial banks in selected counties in
Kenya. The researcher adopted correlation research design. Using
questionnaires, the study collected primary data from the fifteen
selected commercial banks Bomet and Kericho Counties;
distributing the questionnaires to 19 branch managers, 13 assistant
managers, 09 credit managers and 45 tellers making a total of 86
target respondents for this study. The findings of the study are
beneficial to commercial banks from where the data was collected,
as various important recommendations touching on internal
control systems are made.
