ICARE 2018
Permanent URI for this collectionhttp://repository.kln.ac.lk/handle/123456789/19607
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Item The Impact of Internal Control Systems on Profitability: A Study Based on Employees’ Perception of Licensed Commercial Banks in Sri Lanka(4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Jayaweera, W.T.N.; Karunarathna, W.V.A.D.Internal control system plays an important role in preventing and detecting fraud and also protecting the tangible and intangible assets of an organization. Therefore, it is important to study how the internal control system of an organization affects the organization’s performance. Indeed, it is critical for banks and financial institutions to recognize the risk they encountered. So the purpose of this study is to investigate the impact of internal control system on profitability of an organization and it is mainly based on employees’ perception on internal control system of Licensed Commercial Banks in Sri Lanka. Internal control system consists of control environment, risk assessment, control activities, communication and monitoring. The study selected a sample of permanent employees of 25 licensed commercial banks in Sri Lanka. The study used on primary data and it was collected using semi-structured questionnaires with open- ended and close-ended questions. Data was analyzed by using Statistical Packages for Social Science (SPSS). Descriptive statistical measures and the regression analysis were applied to analyze the data of the study. The results of the study showed that the internal controls have statistically significant impact on profitability. Furthermore, findings of the study revealed that the elements of internal control systems comprising control environment, control activities and monitoring have significant and positive impact on profitability in licensed commercial banks in Sri LankaItem The Effect of Internal Control System on Financial Performance of Licensed Commercial Banks in Sri Lanka(4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Bogahadeniya, B.D.S.A.; Munasinghe, M.A.T.K.Internal control systems play an important role in every organization as it help to accomplish their financial performance objectives. The main objective of this study is to determine the effect of internal control system on financial performance of licensed commercial banks in Sri Lanka. Internal controls are looked at from the perspective of Control Environment, Risk Assessment, control Activities, Information and communication and monitoring whereas financial performance focused on Return on Assets. The target population was 25 licensed commercial banks, supervised by the central bank under the banking Act No. 30 of 1988. The random sampling method was used to select the sample and sample size of the study was 16 licensed commercial banks in Sri Lanka that represent 62% of total population. The study relied on both primary and secondary data. Primary data obtained through the standard questionnaire in five likert scale format while the secondary data is gathered from financial statements. Multiple regression models were used to test whether internal controls have any influence on financial performance. The study adopted descriptive research design using both quantitative and qualitative approach. The data is analyzed by the aid of Statistical Package for Social Science (SPSS). Based on the research findings it can be concluded that internal control system is a positive significant predictor of financial performance. In addition, control environment, Risk Assessment, internal control activities, information and communication have positive relationship with financial performance licensed commercial banks