The Effect of Internal Control Systems on Financial Performance of Commercial Banks in Rwanda
Internal Control Systems play an important role in every organization as it assists in realization of their financial performance goals. Internal controls minimize risks and protect assets, ensure accuracy of records, promote operational efficiency, and encourage adherence to policies, rules, regulations, and laws. The main objective of the study was to determine the Effect of Internal Control Systems on Financial Performance of Commercial Banks in Rwanda. The study was guided by the following objectives Specifically; to investigate the relationship between internal control environment, internal audit function, risk management, internal control activities, and financial performance. Most commercial banks registered declining performance in recent year weakened internal control systems, record keeping, financial reporting and regulatory compliance . Research done relating to internal control systems and financial performance do not directly show the effect of corporate governance and regulatory systems on financial performance. The study adopted System Theory and agency theory.
