Effectiveness of internal control systems over cash in financial institutions: the case of bank of Tanzania

The general objective of this study centered in assessing the effectiveness of internal cash control systems which are being used by financial institutions in Tanzania using the case of the central bank of Tanzania (BOT). 'Be population of this study was the employees of the Bank of Tanzania (BOT) covering senior employees and operational (supporting) employees. The simple random sampling was employed to select respondents from the supporting staff alter stratifying the respective supporting staff into their respective departments. On the other hand purposive sampling was applied to the senior management officials. The survey instrument comprised six sections: employee fraud incidence, internal control procedural quality, organizational justice perceptions, ethical environment, and general information on various governance features such as internal audit activities: risk management activities and participants' perception of the internal cash control systems in the bank. According to the study findings, the first model revealed that internal control procedural quality has a moderating effect on the relationship between perceptions of organizational justice and employee fraud. In specific, the negative relationship between perceptions of organizational justice and employee fraud is seen to grow stronger as internal control procedural quality improves. The second model found that internal control procedural quality was significantly and positively related to three organizational factors: the organization's ethical environment, internal audit activity level and the extent of risk management training.