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Research Paper | Economics | Ethiopia | Volume 4 Issue 6, June 2015

Examining Effectiveness of Internal Control and Internal Audit Function over Cash Operation in Bank - The Case of Cooperative Bank of Oromia

Dagnu Lulu Bekele

Abstract: The major objectives of this research is to examine effective and efficient internal control system over cash operations in Cooperative Bank of Oromia and reviewing its current states, by such factors, as operating and financial control, custody of asset, and record keeping, personal policies and procedures, and internal audit function in some branches of the bank. The study has employed the descriptive research methods in order to describe factors that affect effective and efficient internal control system in CBO. Analysis of the data collected shows that combination of cash operation functions and some personal relationships, lack of integrity, competence, knowledge and experience by employees working around cash operations, inadequate communication of proper information for decision making, misappropriation of cash, unsatisfactory verifications and weak internal audit functions in the bank which affects effective and efficient internal control systems in the bank. To improve the effectiveness and efficiency of internal control systems in Cooperative Bank of Oromia, the following measures are recommended. Establishing encouragement bonus, disciplinary actions, chained follow-up where all employees monitor each other, diverse and continues training and orientation, surprise audit and verification, serious regular Reporting periods and maintaining independence of internal auditor

Keywords: Effectiveness, Efficiency, Internal Audit function, Internal Control

Edition: Volume 4 Issue 6, June 2015,

Pages: 1233 - 1240