Abstract:
This study assessed the impact of internal control systems on financial performance in Tanzania, a
Case of Commercial Banks Listed at Dar es Salaam Stock Exchange. This study adopted descriptive
research design. A total sample of 36 Support managers, Head of Corporate and regulatory affairs,
chief finance officers, chief business officers, risk managers, credit managers, and Human
Resources Managers and DSE officials were used in this study. Both quantitative and qualitative
techniques were used. Both interview, questionnaires and secondary data were used in this study.
The study concluded that there was a not significant effect of control environment on the financial
performance of commercial banks listed at DSE in Tanzania. The study established that some
management of these banks failed to act with great integrity while executing their roles. The study
further found out that there was a significant effect between control activities and the financial
performance of listed commercial banks. It is recommended that, commercial banks listed at the Dar
es salaam Securities Exchange should re-evaluate their internal controls systems and strengthen
their weak areas so as to improve their financial performance, there is a need for management to
fully understanding their obligations and take necessary actions in ensuring financial performance of
their commercial banks, commercial banks should implement efficient control activities to guide their
operations. The banks’ management specifically the human resource management should examine
the level of employee integrity in allocating them responsibilities especially employees who handle
confidential information, commercial banks should ensure that their monitoring strategies are geared
towards effective operations and achievement of organization goals. The management of commercial
banks should ensure that there are policies in place guiding the banks’ dealing with threats to the
banks’ operations. Commercial banks should transparently report on the structure and performance
of their governance, risk management and internal control systems in their various reports to internal
and external stake- holders for example through their periodic accountability reports.
