THE INTERNAL CONTROL PRACTICE OF JUMHOURIA AND SAHARA BANKS IN LIBYA.....

Abstract

The rapid change on economic environment highly requires organizations to control the risks related to the financial and operative purposes. Furthermore, monitoring is also crucial for the management and the board of directors in providing them significant information related to the performance and the effectiveness of internal control systems. Internal audit as a part of internal control system has helped organizations manage and mitigate the risk as well as understanding the position where their risks are. In the effort of achieving the objective, COSO framework gives a concrete alternative for organizations to mitigate the risks related to the validity of financial reporting. This study is aimed at understanding the internal control implemented in Jumhouria and Sahara banks in Libya according to the top managements’ perspectives based on COSO framework. This study is qualitative descriptive research. Data was collected through questionnaire that was distributed by E-mail. Furthermore, an interview was also done to gain deep information done by e-mail as well. The findings of this study revealed that control environment has not been well implemented by the Jumhouria and Sahara banks although the integrity and ethical value are communicated effectively throughout the organization. However, there is no consistency between the works done by the management of operating units with the senior management. Furthermore, it is believed that COSO Framework brings some benefits for the banks although the implementation of its components has not been recognized. A good internal control is important, because it may give the bank an idea of how it is performing.