| dc.description.abstract | The purpose of this study was to find out the effect of internal controls on the financial
performance of deposit taking Savings and Credit Cooperative Societies (SACCOs) in
Kenya.
This study is significant because SACCOs make a critical contribution to the economic
development of this nation through funds and savings mobilization. However, these
SACCOs face a number of challenges, key among them being the issues of management
which is largely occasioned by the existence of poor or weak internal controls. Financial
performance of these institutions is thus seriously impacted as a result of the existence or
lack thereof of the necessary internal controls that would lead to effective financial
management within the SACCOs.
The findings of this study conducted on 122 deposit taking SACCOs in Kenya relied on
both primary and secondary data which was obtained from the annual reports of the
SACCOs. Regression analysis was mainly used to reveal that the financial performance
of SACCOs in Kenya is largely influenced by the level of internal controls instituted by
the management of these institutions. If the SACCOs improve the effectiveness of their
internal controls, then the financial performance of these SACCOs improves drastically.
The regression analysis conducted established that the independent variables have a
positive strong correlation with the dependent variable. Each of the independent variables
namely, the control environment, risk assessment, control activities and monitoring
mechanisms contribute positively to the financial performance of SACCOs in Kenya.
It is also evident from the study that without the presence of strong internal controls
within these institutions, the SACCOs would be performing poorly with the risk of
eventual collapse as a result of poor financial performance. | en |
