[01] Eleazer Fianko Ofei, Department of Business Administration, Accra Institute of Technology, Accra, Ghana. [02] Henry Kofi Mensah, Department of Human Resource and Organizational Development, Kwame Nkrumah University of Science and Technology, Kumasi, Ghana.

Banks play a major role in accepting deposits and making available credit facilities to clients, the performance of banks is considered very key to its profitability and the is the need to ensure that necessary measures are adopted to promote this objective. In this study, the purpose was to analyse the internal control environment set up by management and assess its effect on the financial performance of banks operating in Ghana. In view of this, the research objective was to determine the effect of the internal control environment on the financial performance of Ghanaian banks. A questionnaire was developed and used to solicit the views of 676. Data collected was analysed with the help of hierarchical linear regression. The results from the analysis indicated that the banks had an internal control environment setup within the banks, it further established that the results were significant and the effect was positive. This implied that as control environmental activities improved or increased financial performance of the banks similarly improved. These results imply that banks have internal control environments that have been well developed and functioning. The study, therefore, recommends that the bank should continuously review the control environment and ensure all policies and procedures are functioning as they should and if possible, review section that seems to have issues. The study finally provided empirical evidence on the effect of internal control environment more specifically relating to the entire banking sector of Ghana.

Internal Audit, Internal Control Environment, Bank of Ghana, Financial Performance

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