The Internal Control System of a Commercial Bank

Abstract

The study intends to assess the effectiveness of the Internal Control System of a commercial bank. The descriptive - survey method of research was used in this study. The respondents were composed of 120 bank employees from the Banking Operations Group (BOG), Finance and Corporate Affairs Group (FCAG), and Compliance Department of CTBC Bank (Phils.), Corp. Based on the findings, the effectiveness of the internal control system of a commercial bank in terms of control environment, risk assessment, control activities, information and communication, and monitoring activities were evaluated by the respondents as ‘very effective’. The study also reveals that there are no significant differences on the effectiveness of the internal control system a commercial bank in terms of age, sex, civil status, highest educational attainment, job position level, length of service in the company, and years involved in internal control. The researcher recommends that: 1) the bank shall consider employing older or experienced individuals with at least master’s degree; 2) in terms of control environment, the bank shall continue to maintain an updated design of the organizational structure made accessible to all the employees; 3) in terms of risk assessment, the bank shall remain to identify fraud risks opportunities for unauthorized acquirement, use and disposal of assets and altering the reporting records; 4) in terms of control activities, the bank shall continue to practice all transactions within the limits set by the policy or that exceptions to policy had been granted by the appropriate authority; 5) in terms of information and communication, the bank shall enhance that data information back - up is available whenever the system is down to eliminate delay in the operations; and 6) in terms of monitoring activities, the bank shall continue to check that all employees are sharing and receiving information appropriately and that this information is timely, relevant, and sufficient for the user. The researcher also recommends that future researchers work on other topics that were not taken up in this study to identify the effectiveness of the internal control system.