The Effectiveness of Internal Control System in Safeguarding Assets in the Ghanaian Banking Industry

The study assessed the effectiveness of internal control system in safeguarding assets against fraud in Agricultural Development Bank Ghana Limited (ADB). The study specifically highlighted the major causes of fraud; determined the extent of implementation of internal control systems; assessed the effectiveness of internal control system on fraud detection and prevention; and ascertained the effect of fraud on the bank in terms of its profitability, liquidity and operational efficiency. A structured questionnaire was used as a primary data collection instrument to select employees of ADB by purposive and convenient means. Items of the questionnaire were measured on the ranking scale. 37 employees from five branches of the bank were sampled. Data analysis was done using descriptive statistics. The study found that employees of the bank perceived that; poor internal control system, presence of unqualified staff, inadequate staffing, poor record-keeping practices, and inadequate training and re-training of staff among others were the main causes of fraud. All aspects of internal control system were strongly implemented and practiced by the bank. Internal control system was effective in controlling fraud in the bank in various forms. Fraud had negative and insignificant effect on the performance of the bank. The study recommends the continuous practice of the internal control system to ensure that fraud of any form is reduced to the barest minimum.