Internal Control And Performance Of Commercial Banks In Kampala Uganda. A Case Study Of Uba Bank, Kansanga-Kampala, Uganda

TABLE OF CONTENTS

DECLARATION ............................................................................................................................. i

APPROVAL ................................................................................................................................... ii

TABLE OF CONTENTS .............................................................................................................. iii

DEDICATION ............................................................................................................................. viii

ACKNOWLEDGMENT ............................................................................................................... ix

CHAPTER ONE ............................................................................................................................ 1

INTRODUCTION ......................................................................................................................... 1

1.0 Background to the Study ........................................................................................................... !

1.1 Statement of the Problem .......................................................................................................... .3

1.3 General objective of the Study ................................................................................................. .4

1.4. ReseaTch specific Objectives .................................................................................................... 4

1.5 Research questions .................................................................................................................... .4

1.5 Scope of the Study .................................................................................................................... .4

1.5.2 Geographical Scope ............................................................................................................... .4

1.5.3 Content scope .......................................................................................................................... 4

1.5 .4 Time scope .............................................................................................................................. 5

1.6. Significance of the Study .......................................................................................................... 5

1.7 Conceptual Frame Work ............................................................................................................ 6

CHAPTER TW 0 ........................................................................................................................... 7

LITERATURE REVIEW ............................................................................................................. 7

2.0 Introduction ................................................................................................................................ 7

2.1 Methods of Internal Control ...................................................................................................... 7

2.1.1 Organization ........................................................................................................................... 7

2.1.2 Segregation of Duties ............................................................................................................. 8

2.1.3 Authorization and Approval ................................................................................................... 8

2.1.4 Arithmetic and Accounting ..................................................................................................... 8

2.1.5 Physical Restrictions ............................................................................................................... 8

2.1.6 Management ........................................................................................................................... 9

2.1.7 Persounel ................................................................................................................................. 9

2.1.8 Supervision ............................................................................................................................. 9

2.1.9. Acknowledgement of Performances ...................................................................................... 9

2.1.1 0. Budgeting ............................................................................................................................. 9

2.2. Internal control Measures ....................................................................................................... ! 0

2.3 Effects oflnternal control on financial performance ............................................................... !!

2.4 Competence of staff in relation to internal control .................................................................. 13

2.5 Limitations of internal Controls and reporting systems .......................................................... 16

2.6 Case studies done in Uganda ................................................................................................... 17

CHAPTER THREE ..................................................................................................................... 19

RESEARCH METHODOLOGY ............................................................................................... 19

3.0 Introduction .............................................................................................................................. l9

3.1 ReseaTch design ....................................................................................................................... 19

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3.2 Study population ...................................................................................................................... 19

3.3 Sample size and Selection ....................................................................................................... 19

Source: Human Resource Records ................................................................................................ 20

3.4 Sampling Techniques ............................................................................................................... 20

3.5 Data Collection Methods ......................................................................................................... 20

3.5 .1 Questionnaire ........................................................................................................................ 21

3.5.2 Interview Method .................................................................................................................. 21

3 .5 .3 Research Inst1uments ........................................................................................................... .21

3.5.4 Documentary Review ........................................................................................................... 21

3.6 Measurements of variables ...................................................................................................... 22

3.6.1 Validity of the instruments ................................................................................................... 22

3. 7 Pre-testing ................................................................................................................................ 22

3.8 Reliability of Instruments ........................................................................................................ 22

3.9 Data Validity ............................................................................................................................ 22

3.10 Data Analysis ......................................................................................................................... 23

3 .II Ethical considerations ............................................................................................................ 23

CHAPTER FOUR ....................................................................................................................... 25

DATA PRESENTATION AND ANAL YSIS ............................................................................. 25

4.1 Inn·oduction .............................................................................................................................. 25

4.2 Biographical Information ......................................................................................................... 25

4.2.1 Gender and Position of the Respondents .............................................................................. 25

4.2.2 Educational Level Attained .................................................................................................. 25

4.2.3 Age group ofRespondents .................................................................................................... 27

4.2.4 Work experience in UBA Bank ............................................................................................ 28

4.3 Different Intemal Control Measures used by the Management .............................................. .29

4.3.1 Emphasizing oflntemal control methods system in UBA .................................................. .29

4.3.2 The UBA bank control Activities ........................................................................................ .31

4.3.3 Does UBA have procedures to identify accounting problems? ............................................ 32

4.3.5 Intemal control and Specific audits of Accounting in UBA? ............................................... 32

4.3.6 Procedures for preparing financial statement in every consolidated entity in UBA ............ 33

CHAPTER FIVE ......................................................................................................................... 35

SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS .................... 35

5 .I Introduction .............................................................................................................................. 3 5

5.2 Summary of Findings .............................................................................................................. 35

5.3 Conclusion .............................................................................................................................. .36

5.4 Recommendation ..................................................................................................................... 37

5.5 Areas for further research ....................................................................................................... .38

REFERENCES ............................................................................................................................ 39

APPENDIX I ................................................................................................................................ .42

RESEARCH INSTRUMENTS ..................................................................................................... 42

A. QUESTIONNAIRE'S ....................................................................................................43

B. INTERVIEW GUIDE ................................................................................................ .46

APPENDIX II ................................................................................................ 47