The prime focus of this study is to assess the moderating effect of internal audit effectiveness on the relationship between internal control systems and the performance of Ghanaian banks.
Structured questionnaires were administered to a sample of 235 top managers from 15 regional branches of selected Ghanaian banks, using a simple random sampling technique. This quantitative study rides on inferential statistics using a partial least squares structural equation modelling (PLS-SEM) estimation approach.
Findings indicate that internal control mechanisms positively influence bank performance and that adequate internal audits strengthen this relationship by enhancing risk management, communication, and monitoring. This reinforces the importance of robust internal control systems, supported by efficient internal auditing, in sustaining bank performance.
Ghanaian financial institutions should prioritise enhancing internal control systems and allocating resources to establish efficient internal audit practices, address weaknesses, and build a solid and efficient audit framework.
The present study innovates by investigating the moderating role of audit effectiveness in the nexus between internal control mechanisms and performance. Its broad conceptualisation of performance includes non-accounting measurements.
