Relationship Between Internal Controls Practices and Financial Performance of Commercial State Corporations in Kenya

Abstract

The main objective of the study was to determine relationship between internal control and financial performance of commercial state corporations in Kenya. The study adopted a descriptive design. The target population comprised of 33 commercial state corporations. The study adopted a census and thus the sample size was 33 firms. The study collected primary data using questionnaires. The collected data was analysed using means, standard deviations and regression. The study found out that control environment had p value 0.004 and thus has significant effect on financial performance of commercial state corporations. Risk assessment p=0.011 which is less than 0.05. This that risk assessment has significant effect on performance of commercial banks. Information and communication(p=0.014) which is less than 0.05 and thus it significantly influenced financial performance. Monitoring p=0.009 which is less than 0.05 and thus it significantly influenced financial performance of commercial banks. The study concludes that internal controls significantly influence financial performance. The study recommends that the management team of all commercial state corporations in Kenya should have clearly established risk management department. Policy makers and regulatory authority the Auditor General should come up with formulate sound policies that strengthen internal controls of state corporations.