What Is the Impact of Internal Control System on the Quality of Banks' Financial Statements in Jordan?

Rafat Salameh Salameh

Abstract

This study aims to investigate the impact of the internal control system on the quality of financial reporting for Jordanian banks. The five components of the internal control system defined (control environment, implementation of control procedures, risk assessment, information and communication and monitoring framework) were utilized to collect information from 20 Jordanian banks and to test the study hypotheses. Using a questionnaire as a data collection method, the study collected 88 valid responses from various staff levels. The SPSS analysis confirms that the internal control system in Jordanian banks has a positive effect in the quality of financial reporting. The study recommends that Jordanian banks can further improve their internal control system, enhancing the role of internal auditors and integrating their incentives and rewards with the performance and control reporting.