ASSESSMENT OF INTERNAL CONTROL EFFECTIVENESS IN E-BANKING; THE CASE OF COMMERCIAL BANK OF ETHIOPIA

Abstract

This study focuses on evaluating the internal control effectiveness of E-banking operations within the Commercial Bank of Ethiopia (CBE). The assessment was made based on the five components of the COSO internal control framework. The study used a descriptive research design. The study makes use of primary data that are collected using closed-ended questionnaires. The study finds the following results. First, concerning control environment of internal control, a significant majority of respondents perceived the existence of a clear separation of roles and responsibilities in the CBE’s E-banking operations. Second, the majority of respondents recognized the importance of considering risk assessment for fraud in assessing risks related to E-banking objectives. There was a positive perception that the bank identifies and assesses changes that could significantly impact internal control for E-banking. Third regarding control activities respondents strongly agreed that the bank has selected and developed general control activities over technology to support the achievement of E-banking objectives. The bank deploys control activities through policies and procedures effectively, ensuring transparency and compliance. Four concerning information and communication practices, the study finds that the bank generates and utilizes relevant, quality information to support internal control E-banking. The bank effectively communicates objectives and responsibilities for internal control within the organization and with external parties. Finally, regarding monitoring activities and evaluation, the study find that the bank conducts ongoing evaluations to ascertain the presence and functioning of internal control components and communication deficiencies promptly to relevant parties for correction action.