Internal Control System and Performance of Financial Institutions in Rwanda: A Case of Bank of Kigali in Nyarugenge District

Authors

  • Annie Mukandoli Mount Kenya University, Kigali, Rwanda
  • Claude Rusibana Mount Kenya University, Kigali, Rwanda

DOI:

https://doi.org/10.53819/81018102t2058

Abstract

The general objective of the study was to analyze the effects of internal control system on financial performance in Bank of Kigali. In methodology, descriptive research design was used to accumulate quantitative and qualitative information. The target populations of 398 BK personnel of headquarter where 191 respondents were selected by the formula of Krejcie and Morgan (1970). The data collection instrument such as questionnaires was used to accumulate information from the field. After processing the data, the last closing end result summarized in the structure of statistical tables such as descriptive statistical tables, regression tables and correlation analyzes for the use of the SPSS version 21.0 and the researcher gave an interpretation of the results. The study findings have proved a positive and significant relationship internal control system and financial performance because all calculated p-values are less than 0.01 significance level for instance the relationship between risk assessment and return on asset with B=.962 and sig=.000, between risk assessment and return on investment with B=.872 and sig=.000, between control activities and monitoring of operation with B=.917 and sig=.000, between control activities and return on equity with B=.937 and sig=.000, between control activities and return on asset with B=900 and sig=.000, between monitoring of operations and return on investment with B= 877 and sig=.000, between return on asset and return on investment with B=.889 and sig=.000, between return on asset and return on equity with B=.922 and sig=.000. Thus, implies that internal control system has an impact on financial performance in Bank of Kigali. Basing on the findings the research recommends BK to tackle all factors of internal control system in order to gather the information to enhance financial performance of Bank of Kigali.

Keywords: Internal control system, Performance, financial institutions, Bank of Kigali, Rwanda

Author Biographies

Annie Mukandoli, Mount Kenya University, Kigali, Rwanda

School of Business and Economics, Master of Business Administration (MBA), Accounting and Finance, Mount Kenya University, Kigali, Rwanda

Claude Rusibana, Mount Kenya University, Kigali, Rwanda

Mount Kenya University, University of Kigali, ULK, Kigali, Rwanda

References

Bank of Kigali. (2018). BK Group Plc Announces Audited, IFRS-Based 4Q & Full Year 2018 Results. BK. Kigali, Rwanda.

Bostan, I. (2022). Special Issue Audit and Financial Control Tools Aimed at Ensuring the Sustainable Performance of Organizations. Journal of Sustainability, 13 (2), 1-4. https://doi.org/10.3390/su131810364

Eyisi, D. (2016). The Usefulness of Qualitative and Quantitative Approaches and Methods in Researching Problem-Solving Ability in Science Education Curriculum. Journal of Education and Practice, 7(15), 16-20.

Kombo,D.K. & Tromp, D. L.A. (2011). Proposal and Thesis writing an introduction: Pauline Publications Africa. Nairobi.

Kunz, J., & Heitz, M. (2022). Banks’ risk culture and management control systems: A systematic literature review. Journal of Management Control, 32(10), 439–493 (2022). https://doi.org/10.1007/s00187-021-00325-4

Muhunyo, B.M. & Jagongo, A.O. (2018). Effect of internal control systems on financial performance of public institutions of higher learning in Nairobi city county, Kenya. International Academic Journal of Human Resource and Business Administration, 3(2), 273-287

National Bank of Rwanda. (2017). Annual Financial Stability Report. BNR. Kigali, Rwanda.

Niyonsenga, E., & Abuya, J.O. (2017). Internal Control System and Financial Performance in Financial Institutions in Rwanda: A Case of I & M Bank Ltd Rwanda. African Journal of Business and Industry, 2(3), 46 – 58

Nwobodo H., Adegbie, F. & Banmore, O. (2020). Effect of bank internal control system on nonfinancial performance of selected quoted deposit money bank in Nigeria. Journal of Management, Economics, and Industrial Organization, 4(2), 77-88. https://doi.org/10.31039/jomeino.2020.4.2.5

Olumbe, C.O. (2012). The Relationship between Internal Controls and Corporate Governance in Commercial Banks in Kenya. Unpublished Research Thesis. University of Nairobi. Nairobi, Kenya.

Soriano, C.V. (2014). Recession and social dialogue in the banking sector: a global perspective. Eurofund. Dublin, Ireland.

Tumwebaze, Z., Bananuka, J., Kaawaase, T.K., Bonareri, C.T. and Mutesasira, F. (2022). Audit committee effectiveness, internal audit function and sustainability reporting practices. Asian Journal of Accounting Research, 11(2), 21-33. https://doi.org/10.1108/AJAR-03-2022-0036

Downloads

Published

2022-04-22

How to Cite

Mukandoli, A., & Rusibana, C. (2022). Internal Control System and Performance of Financial Institutions in Rwanda: A Case of Bank of Kigali in Nyarugenge District. Journal of Finance and Accounting, 6(1), 91–107. https://doi.org/10.53819/81018102t2058

Issue

Section

Articles