Impact of Internal Control Systems on Performance of Universal Banks: Evidence from Ghana

Otoo, Isaac Christopher; Asumah, Sampson; Peprah-Amankona, Godfred; Andzie, Ahmed Tahir

doi:10.4236/jfrm.2021.104025

Cited by 2 publications

(4 citation statements)

References 6 publications

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“…Internal control mechanisms promote operational efficiency, effectiveness and competitive advantage (Otoo, 2019a, b). The results show a significant impact of control environment on organizational effectiveness.…”

Section: Discussionmentioning

confidence: 99%

“…An effective internal control system has a significant impact on banking operations making it unique in examining banking industry effectiveness related issues (Hayali et al. , 2011; Otoo, 2019a, b; Vulley, 2022). The survey included 35 banks, of which 15 were commercial banks and 20 rural banks.…”

Section: Methodsmentioning

confidence: 99%

“…Internal control systems have evolved as a unique area of research and study drawing on theories from a variety of disciplines (Otoo, 2019a, b; Vu & Nga, 2022). Internal controls are measures established for the attainment of organizational objectives (Odunko, 2022).…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

“…The contingency theory assumes a no unanimously superior strategy (Richard, 2003; Bergeron, Raymond, & Rivard, 2001). Weak internal controls accounts for most business failures (Oladimeji, 2016; Otoo, 2019a, b). Poor and inefficient internal control mechanisms result in theft, loss of income and fraud conspiracy (Hoai et al.…”

Section: Introductionmentioning

confidence: 99%

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Evaluating the impact of internal control systems on organizational effectiveness

Otoo,

Kaur,

Rather

2023

LBSJMR

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PurposeInternal control systems are critical to an organization's efficiency and promotes the adherence to norms and rules. The purpose of this study is to evaluate the impact of internal control systems on banking industry effectiveness.Design/methodology/approachData were collected from 15 commercial and 20 rural banks. The hypothesized relationships were supported by the data. A structural equation modeling was applied in testing the conceptual model and hypothesis. Confirmatory factor analysis was conducted to establish validity and reliability of the dimensions.FindingsThe results show that organizational effectiveness was significantly impacted by three dimensions of internal control systems: control activities, control environments and risk assessment. However, the impact of monitoring of control on organizational effectiveness was not significant. The results also show a nonsignificant impact of information and communication on organizational effectiveness.Research limitations/implicationsSince the current study concentrated on the banking sector with its distinct characteristics, the generalizability of the conclusions may be limited.Practical implicationsThe study's findings may aid decision-makers and stakeholders in the adoption, designing and implementation of proactive internal control system to enhance operational efficiency, effectiveness and competitive advantage.Originality/valueThe study advances the literature by empirically evidencing that internal control systems impact organizational effectiveness.

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Section: Discussionmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Evaluating the impact of internal control systems on organizational effectiveness

Otoo,

Kaur,

Rather

2023

LBSJMR

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Antecedents of Compliance with Anti-Money Laundering Regulations in the Banking Sector of Ghana

Hoffman,

Okeniyi,

Samuel

2024

JRFM

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This study examines factors influencing Ghanaian banks’ compliance with anti-money laundering (AML) legislation. Drawing upon institutional, compliance, and dynamic capability theories, the study identifies the interplay of organisational, regulatory, and employee factors influencing compliance outcomes. A mixed methods approach was used to collect data from 23 universal banks, 9 local and 14 foreign, in Ghana, focusing on experienced managers and employees in risk, legal, operations, compliance, and business development departments. The findings show that employee characteristics like due diligence and moral involvement have a positive relationship with compliance with AML regulations; however, contrary to expectations, effective AML/CFT programs did not significantly impact banks’ adherence to these regulations. The association between moral engagement, an innovative culture, and AML compliance is weakened by normative power and an innovative culture acting as negative moderators. This study contributes empirical evidence to the literature on AML compliance in emerging markets and offers practical implications for policymakers, regulators, and banking professionals seeking to boost regulatory effectiveness and mitigate financial crime risks. This study provides a foundation for targeted interventions and strategic initiatives aimed at strengthening the AML regulatory landscape in Ghana and other countries.

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Impact of Internal Control Systems on Performance of Universal Banks: Evidence from Ghana

Cited by 2 publications

References 6 publications

Evaluating the impact of internal control systems on organizational effectiveness

Evaluating the impact of internal control systems on organizational effectiveness

Antecedents of Compliance with Anti-Money Laundering Regulations in the Banking Sector of Ghana

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