THE CONTROL ENVIRONMENT AND RISK ASSESSMENT AS FACTORS OF INTERNAL CONTROL SYSTEMS ON FINANCIAL PERFORMANCE AMONG LISTED COMMERCIAL BANKS IN KENYA
THE CONTROL ENVIRONMENT AND RISK ASSESSMENT AS FACTORS OF INTERNAL CONTROL SYSTEMS ON FINANCIAL PERFORMANCE AMONG LISTED COMMERCIAL BANKS IN KENYA
Kimacia Gitau
ABSTRACT
The purpose of the study was to assess the effect of the Control Environment and Risk Assessment as factors on internal control systems on financial performance among listed commercial banks in Kenya. Descriptive research design was used in the study. The target population was a total of 379 employees while the sample size was a total of 191 employees. Data was collected by use of self-administered questionnaires. Descriptive statistics including means, standard deviation and frequency distribution were used to analyze the data. In addition, the study used correlation and multivariate regression analysis to assess the effect of the independent variables on the dependent variable. The study found that Control environment had a positive and significant effect on commercial bank performance (β1 = 0.694; t = 3.022; p < 0.05), while Risk assessment was the most significant factor in influencing performance of the surveyed commercial banks (β2 = 0.530; t = 3.308; p <0.05). The study concluded that control environment positively and significantly affected commercial bank performance, Additionally, risk assessment practices in the listed commercial banks significantly influenced performance, The study recommended that in order for a firm to perform effectively the elements of a strong control environment must be upheld and ensuring effective risk management practices would be crucial towards a firm’s financial performance.
