Abstract:
ABSTRACT
The study examines the moderating role of board size in the relationship
between internal control and bank performance. Secondary data was obtained
from the annual audited report of all the 23 commercial banks in Ghana.
Descriptive research design with census method was used thus all the 23
commercial banks were used for the analysis. Multiple linear regression was
used to analyse the extent to which each of the objectives, concerning
monitoring and control activities affects commercial banks’ performance in
Ghana. The study found that there is a positive and significant relationship
between control activities and the financial performance of banks in Ghana.
The findings also revealed that there is a significant positive relationship
between monitoring and financial performance. Further, it was shown that
there is a positive and significant moderating effect of board size on the
relationship between internal control and financial performance of commercial
banks in Ghana. One can therefore conclude that a larger number of board
members have the tendency to increase the Return on Asset (ROA) of the
commercial banks because given the wide variety of industrial knowledge and
skills available to help in effective decision making and monitoring. The
study, therefore, recommended that stakeholders and shareholders in the
banking industry in Ghana should consider appointing a relatively larger board
of directors. Future research can exploit all the five components of the COSO
Framework in the area of Internal Control systems and bank performance, by
using secondary data.
