INTERNAL CONTROL OVER CASH: THE CASE OF BANK OF ABYSSINIA

Abstract

Internal control over cash is of major importance in any business enterprise since cash is a vital factor in the operation of business and many business transactions involve cash. In addition, controlling of cash is important since it is the most liquid of all assets that is vulnerable to theft or misappropriation. The major objective of this research is to assess internal control system over cash operations in the Bank of Abyssinia and reviewing its current status. The study has employed the descriptive research methods in order to describe internal control system in BOA. The study was made through the combination of theory and empirical work. To achieve the study objectives survey research method was employed involving the use of both standardized questionnaire and personal interviews. Analysis of the data collected shows that combination of cash operation functions and level of dependency in internal audit function over management. Internal control should take in to account controlling environment, controlling activity, risk assessment, communication and monitoring. The outcome of the study revealed that the bank should provide training and development program to the employee to create a good understanding of the banks policies to have a better result from now. In order to prevent cash theft and misuse, the bank should rotate cash handling duties periodically in regular. And also it should be experienced to change passwords in periodic basis it shouldn’t have to be changed only when someone leaves the branch.