Abstract: The main objective of this research was to examine assessing the effectiveness of the internal control system in the commercial banks of Ethiopia a case of Hawassa city. In general, the paper used a mixed research design. Data are collected by using a self-administered survey, which has both open ended and closed ended question. The questionnaire was given to commercial banks of Ethiopia staffs from both internal auditors and controllers who are found at different level. After feeding (inserting) the collected data in to SPSS for analyzing purpose. The researcher found that the companys internal control is effective in the following internal components. The company under study has a clear codes of conduct; managements of the company periodically reviews policies and procedures; organization under study have clear objectives, and this are communicated to all staff for direction on risk assessment; there is an adequate and strong dual control and separation of duties in the organization and there is effective reporting procedure in the organization and this also communicated to the employees Finally the research recommends, the following points, though the bank has a human resource development plant it has to be strengthen and should be the company priority concern and the controlling environment should also need a revision regarding updating the mechanism for keeping and protecting the company vital asset from fraud perpetrators.
Keywords: Internal Control, Commercial Bank of Ethiopia, Hawassa city