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Internal Controls in Ensuring Good Corporate Governance in Financial Institutions

Author

Listed:
  • Kosmas Njanike

    (Bindura University, Zimbabwe)

  • Margaret Mutengezanwa

    (Bindura University, Zimbabwe)

  • Fungai B. Gombarume

    (Bindura University, Zimbabwe)

Abstract

This paper assessed factors that influence the internal controls in ensuring good corporate governance in financial institutions in developing economies with special reference to Zimbabwe. The research paper assessed how lack of internal controls affected good corporate governance and aimed to bring out elements of good corporate governance. It emerged that failure to effectively implement internal controls contributed significantly to poor corporate governance. The study discovered that internal control system overrides and the issue of “fact cat” directors also contributed to poor corporate governance. The study recommended that there is need for the board of directors to guarantee an organizational structure that clearly defines management responsibilities, authority and reporting relationships. There is also need to ensure that delegated responsibilities are effectively carried out to ensure compliance with internal controls of the financial institution concerned.

Suggested Citation

  • Kosmas Njanike & Margaret Mutengezanwa & Fungai B. Gombarume, 2011. "Internal Controls in Ensuring Good Corporate Governance in Financial Institutions," Annals of the University of Petrosani, Economics, University of Petrosani, Romania, vol. 11(1), pages 187-196.
    • Handle: RePEc:pet:annals:v:11:y:2011:i:1:p:187-196
    as

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    References listed on IDEAS

    as
    1. Fama, Eugene F, 1980. "Agency Problems and the Theory of the Firm," Journal of Political Economy, University of Chicago Press, vol. 88(2), pages 288-307, April.
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    Cited by:

    1. SAIF Ullah, 2020. "Role Of Corporate Governance In Bank’S Efficiency In Pakistan," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 15(1), pages 243-258, April.
    2. Irvan, Nurmiati & Mus, Abdul Rahman & Su'un, Muhammad & Sufri, Mukhlis & Sjahruddin, Herman, 2017. "Effect of Human Resource Competencies, Information Technology and Internal Control Systems on Good Governance and Local Government Financial Management Performance," INA-Rxiv njzsy, Center for Open Science.
    3. Irvan, Nurmiati & Mus, Abdul Rahman & Su'un, Muhammad & Sufri, Mukhlis, 2017. "Effect of Human Resource Competencies, Information Technology and Internal Control Systems on Good Governance and Local Government Financial Management Performance," INA-Rxiv njzsy_v1, Center for Open Science.

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    More about this item

    Keywords

    internal controls; corporate governance; ethical behaviour;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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