KWAME NKRUMAH UNIVERSITY OF SCIENCE AND

TECHNOLOGY

SCHOOL OF BUSINESS
DEPARTMENT OF BANKING AND FINANCE

IS INTERNAL AUDIT CONTROL A BOOST OR IMPEDIMENT TO UBA?

BY
STEPHEN DUAH AGYEMANG

ID: PG5750911

SUPERVISED BY

DR. LORD MENSAH

JULY 2013

DECLARATION
I, Stephen Duah Agyemang, do hereby declare that this work is the result of my own
research and has not been presented by anyone for any academic award in this or any
other university. All references used in the work have been fully acknowledged.
I bear sole responsibility for any shortcomings.

..

STEPHEN DUAH AGYEMANG

..

DATE

(PG5750911)

..

DR. LORD MENSAH

..

DATE

..

PROF. MAGNUS J. FRIMPONG

..

DATE

ii

DEDICATION

I dedicate this piece of work to; my lovely Dorothy Duku,William Asamoah

Abetia,Patricia Appiah, Sledge Duku Deborah ,Elizabeth Andoh,Lois Duah Agyemang
and my son: Andrews Duah Agyemang . It is also to my mother; Mary Duah Agyemang
of Old Tafo, Ashanti, and then in loving memory of my late Father; Mr. Andrews Duah
Agyemang as well as all my relatives,Joseph Duah Agyemang,Anastasia Duah
Agyemang,Michael Duah Agyemang and also Kofi Amoakohene,Mr P.V Yeboah
Asiamah for their support.

iii

ACKNOWLEDGEMENTS
First and foremost, I would like to thank Almighty God for the guidance and support.
God has always been a source of encouragement for me.
I am indebted to my supervisor, Dr Lord Mensah for his timeless dedication during the
supervision of this work. Special appreciation goes to Mr. Albert Kweku Bediako for his
time, contribution and support. My sincere gratitude goes to Mr Archibald Gyamfi, Mr
Steven Appiah Kubi (USA), and Janet Darkwa Apenteng for their thoughtful feedback,
guidance and encouragement. My sincere gratitude to the staff of the United Bank of
Africa (UBA), and the Management team, for supporting me greatly in my data
collection processes.
My profound appreciations also go to Prof. Magnus J. Frimpong and all graduate school
lecturers who thought me during my period of study in the school of business.

iv

ABSTRACT
Since the deregulation of the banking sector in Ghana in the year 2000, the sector has
become a very keen and highly competitive industry in the country. This level of
competition is making the industry players to develop strategies to ensure survival in the
industry and also increase their market share. One approach for some of these banks is
the process of internally reducing waste and increasing profit. Banks are now adopting
the management process of internal control audit as a boost to increasing profit by
ensuring high standard customer service. The exact influence internal audit control has on
the day to day operations of these banks is the essence for this thesis, using the United
Bank for Africa, Kumasi as a case study. The question now being asked is whether
internal audit control is actually boosting or impeding the operations of banks in Ghana?
The aim of this research is to ascertain whether internal audit control is a boost or
impediment to UBA. The response to this investigation was analyzed through questioning
and questionnaires administered to both management and members of staff of the united
bank for Africa. Some of the findings includes that internal audit control has an impact on
customers and also customers had a very good perception of the internal audit control
systems of the bank.

TABLE OF CONTENT
DECLARATION.......................................................................ii
DEDICATION......................................................................... iii
ACKNOWLEDGEMENTS..........................................................iv
ABSTRACT............................................................................v
TABLE OF CONTENT..............................................................vi
LIST OF TABLES.....................................................................x
LIST OF FIGURES...................................................................x
CHAPTER ONE.......................................................................1
1.1 Background of the Study......................................................1
1.2 Problem Statement..............................................................3
1.3 Objectives of the Study........................................................4
1.4 Research Questions..............................................................5
1.5 Research Hypothesis............................................................5
1.6 Significance of the Study......................................................5
1.7 Scope of the Study...............................................................7
1.8 Overview of Methodology.....................................................7
1.9 Organization of the Study.....................................................8

CHAPTER TWO....................................................................10
2.1 Introduction.......................................................................10
2.2 The impact of internal audit control on customer experience in
the banking sector....................................................................10

vi

2.3 A Brief History of Internal Auditing......................................17

2.4 Customers perception and experience of customer service
standards in the banking sector.................................................18
2.5 Customer satisfaction levels in terms of processes involved in
their day to day banking experiences....................................22
2.6 Concept of Customer Satisfaction........................................22
2.7 Factors of Customer Satisfaction.........................................25
2.8 Strategies to Enhance Satisfaction and Mitigate Complaints. 29

CHAPTER THREE..................................................................32
3.1 Research Design.................................................................32
3.2 Sources of Data..................................................................34
3.3 The Unit of the study..........................................................35
3.4 Population and Sample Frame.............................................36
3.5 Sample size........................................................................36
3.6 Sampling technique............................................................37
3.7 Data Collection Instrument and Analysis..............................37
3.8 Brief Profile of the Case Study United Bank for Africa.........39

CHAPTER FOUR...................................................................41
4.1 Introduction.......................................................................41
4.2 Background of the Respondents..........................................41
4.2.1 Gender of the Respondents...........................................................42
4.2.2 Age Distribution............................................................................. 43
4.3 Educational level of the respondents...................................45

vii

4.4 Impact of internal audit control on customer experience in

United Bank for Africa, Kumasi Branches....................................46
4.4.1 The Importance of the Implementation Internal Control Systems in
UBA

46

4.5 Customer Complaints emanating from the Implementation of

Internal Control Measures.........................................................47
4.5.1 Customers knowledge in terms of laid down systems on how staff
deals with them....................................................................................... 53
4.5.2 How Satisfied Customers are with the Implementation of Rules in
UBA

55

4.5.3 How often Customers Challenge the Rules of the Bank.................56

4.5.4 The influence of the existence of Rules at UBA on the amount of
Transactions Customers make at the Bank..............................................57
4.6 The level of understanding of customer service staff in terms
of internal audit control system.................................................58
4.6.1 Training of customer service staffs on internal control systems....58
4.6.2 Staff adherence to laid down control systems and maintenance of
customer satisfaction..............................................................................60
4.7 Customers Perception and Experience of Customer Service
Standards.................................................................................61
4.8 Customer Satisfaction........................................................64

CHAPTER FIVE.....................................................................68
5.1 5.1 SUMMARY.....................................................................68
5.1.1 Impact of internal audit control on customer experience in United
Bank for Africa, Kumasi Branches............................................................68

viii

5.1.2 The level of Understanding of Customer Service Staff in Terms of

Internal Audit Control System.................................................................69
5.1.3 Customers Perception and Experience of Customer Service
Standards................................................................................................ 70
5.1.4 Customer Satisfaction...................................................................70
5.2 Recommendations..............................................................70
5.3 Conclusions........................................................................71

REFERENCES.......................................................................73
APPENDIX 1........................................................................79
APPENDIX 2........................................................................86

ix

LIST OF TABLES
Table 4:1 Age Distribution of Respondents.......................................................................43
Table 4:2 Factors for Internal Control...............................................................................49
Table 4:3 Customers challenge of systems........................................................................56
Table 4:4 Level of Customer Satisfaction..........................................................................64

LIST OF FIGURES
Figure 2-1 COSO Internal Control....................................................................................16
Figure 4-1 Gender Distribution of Respondents................................................................42
Figure 4-2 Length of Employment & Banking Relationship............................................44
Figure 4-3 Educational Qualification of Respondents.......................................................45
Figure 4-4 Importance of Internal Control System............................................................46
Figure 4-5 Customer Complaints.......................................................................................48
Figure 4-6 Customers' Knowledge Bank's Internal Control Systems................................54
Figure 4-7 Customers' Views of Internal Control System.................................................55
Figure 4-8 Impact of Internal Systems on customers' transactions...................................57
Figure 4-9 Staff Training on Internal Control Systems.....................................................59
Figure 4-10 Adherence to Internal Control System & Customer Satisfaction..................60
Figure 4-11 Customers' Perception of Customer Service..................................................62
Figure 4-12 Frequency of Customers' Feedback on Customer Service.............................63

xi

CHAPTER ONE
GENERAL INTRODUCTION

1.1

Background of the Study

The Ghanaian banking industry is a very competitive sector with all competitors
developing strategies to be or win the competition. One thing that these banks are not
loosing sight of is the need to make their customers (both existing and prospective) very
satisfied with the service rendered to these customers through a very structured and
efficient customer service strategy.
Whiles implementing all the flourishing customer service strategies, the managers and
leaders of the industry are also mandated to implement all the Rule and regulations
assigned to them by the regulator of the industry, Bank of Ghana, (BOG). These rules and
regulations are also integrated with other internally generated rules and are all assigned to
the internal audit department to monitor.
All these rules and regulation is what is termed as internal audit. Auditing is not a very
pleasant process for most operations staff in various institutions but its also an
unavoidable process that comes every now and then to ensure sanity in the daily
operations of these institution. Betty (1975) describes auditing as a branch of accounting
concerned with the efficient use of resources to achieve a previously determined
objective or set of objectives contained in a plan. In the case of banks, their operational
processes is what is internally monitored and controlled by the internal audit control
system(s).

The use of internal audit control systems is to audit all facets of the banks operations to
ensure that all laid down rules and regulations are being strictly adhered to. The definition
of internal auditing by Obazee (1997) is that, internal auditing is the whole system of
auditing, financial and otherwise, intended to secure management information and
reliability of accounting records. Internal audit control does not allow an form of
deviation from the laid down rules of operation but such stringent rule does not promote
enhanced customer service.
Meyer and Schwager (2007) and Pine and Gilmore (1999) described customer service as
an internal, personal and subjective experience, which exists only in the mind of an
individual who has been engaged on an emotional, physical, intellectual, or even spiritual
level. This means that although customer service is not tangible, any form of obstruction
in its delivery can easily influence the perception of the recipient.
The ultimate onus now lies on the banks to ensure that their services are not rendered too
cumbersome. This is because of adherence to regulation whiles at the same ensuring
customer service expectation are met. All efforts will have to go into ensuring that all
operational standards and regulations are maintained and at the same time customer
service standards are kept on the high side. Arnold, Reynolds, Ponder and Lueg (2005)
argues that such a complex goal can be achieved by encouraging staff to do things
differently whiles carefully designing the service offerings, in order to create a
memorable experience by customers. Such a delightful experience may be attributed to
interpersonal and non-interpersonal factors between both customers and staff.

1.2

Problem Statement

For the smooth transaction of business in banks, there should exist laid down customer
service procedures and structures. This service cant be allowed to exist without guidance
and monitoring. At the same time, the monitoring process should also not be used an
impeding tool for the smooth execution of customer service strategies.
In the process of improving customer service experience in the banking sector, the
leadership and staff need to understand how customers want to be treated whiles
transacting business with the banks. The thoughts, perception, behavior and feelings of
customers about certain brands and their products and service can aid other brands and
institutions to better handle customer service issues. This view stems from the fact
Gentile, Spiller and Noci (2007) finds successful products and services involve
customers senses, emotions, thoughts, acts, values and relations in different ways,
meaning, that successful service providers need to have a clear understanding of how
customers thoughts and emotions can influence customers decisions and actions.
In the process of ensuring that customers are satisfied with the services rendered to them,
strict measures will also have to be put in place to ensure that the laws, rules and
regulations governing the operations of the bank(s) are not flouted. All inherent risk in
the operation of banks will need to be monitored by an internal audit control system.
Internal auditors in the banking sub-sector, until recently, had focused mostly on broad
corporate controls and risk, Katz (2002). The focus of controlling risks turn to have an
impact on ensuring excellent customer service delivery in the banks. The way to resolve
this impasse between internal audit control and customer service will be to have an

internal system that has all the coordinated methods and measures intended to safeguard
organizations assets, check the accuracy and reliability of accounting data with emphasis
on micro or individual controls at the level of transaction whiles still maintaining a high
degree of excellent customer service.
This study seeks to assess Internal audit control being an impediment or a boost to
customer service in the banking industry in Ghana using the United Bank for Africa as
the case for the study.

1.3

Objectives of the Study

The main objective of this research is to examine whether internal control have negative
or positive effect on the customer service of banks, specifically UBA Ghana.
The following are specific objective that we seek to address specifically to enable the
realization of the main objective of the study.
1.

To assess the impact of internal audit control on customer experience in United

Bank for Africa, Kumasi Branches

2.

To examine the level of understanding of customer service staff in terms of

internal audit control system at United Bank for Africa, Kumasi branches

3.

To assess customers perception and experience of customer service standards at

United Bank for Africa, Kumasi branches

4.

To determine the customer satisfaction levels in terms of processes involved in

their day to day banking experience at United Bank for Africa, Kumasi
branches
4

1.4

Research Questions

This thesis will address the following questions to aid in the completion of the research as
well as realization of the set research objectives.
1.

What is the impact of internal audit control on customer experience in United

Bank for Africa, Kumasi Branches?

2.

What is the level of understanding of customer service staff in terms of internal

audit control system at United Bank for Africa, Kumasi branches?

3.

What are customers perception and experience of customer service standards at

United Bank for Africa, Kumasi branches?

4.

What are the customer satisfaction levels in terms of processes involved in their
day to day banking experience at United Bank for Africa, Kumasi branches?

1.5

Research Hypothesis

Ho: Internal Audit has control on customer service

Ha: Internal Audit does not have control over customer service

1.6

Significance of the Study

It is obvious that no company operating anywhere in the world today will have the
opportunity of risk free environment to operate in. The presence of such risks will only be
remedied or curtailed with the implementation of a well thought through risk
management plan. Such risk management plans will help management to operate
effectively and efficiently in such risky business environment.

On the other side, every institution, including banks, are today doing all they can to win
and maintain more customers. They are now using customer service delivery as a
strategic tool coupled with other strategies to lure customers of their competitors. To be
able to withstand the competition, there must be continuous improvement in the customer
service delivery channels. This study will also take a careful and cursory look at the
customer service channels at the bank under this study.
This study will add up to the existing knowledge on internal audit control and its impact
on customer service delivery in banks in Ghana. Academically this research aims to add
more information to already existing literature on both internal audit control and
customer service delivery in Ghanaian banks. Researchers, students and any academician
who has interest in the chosen subject area can fall on this research for reference and
assistance.
In practical business, the findings of this research can help to streamline decisions and
strategies relating to both internal audit control as well as customer service delivery. The
findings can help decision makers and business leader to understand how internal audit
control is affecting customer service delivery. It can help to minimize losses through
operational surprises by the advance identification of potential events and risks.
Understanding potential risks can also manage specific situation with specific section of
the organization.

1.7

Scope of the Study

The case chosen for this study is the United Bank for Africa. The study will focus on all
the Kumasi branches of United Bank for Africa. The study will cover all operations

managersandcustomerserviceofficersinallthe5branchesinKumasi.Thirtycustomers
randomlychosenfromeachbranchwillalsobeinterviewed.Thisdecisionisduetothe
limitedtimeavailabletotheresearcher.

Geographically, the study was carried out in the Kumasi Metropolitan area because of the
current location of the researcher and also the metropolis is that second largest financial
concentration in the country. Respondents are selected based on customers patronage of
the service under discourse.

1.8

Overview of Methodology

A total of 50 staff and 150 randomly selected customers of the bank will be interviewed
for the research from the institution under study. The interview will be done through a
structured questionnaire developed using the Likert scale. The questionnaire will also
have a few open-ended questions to seek explained views on specific issues. The Likert
scale will enable respondents to address or answer specific question without having to
give reason for their choice of answer. The reverse applies to the few open ended
questions where respondents will have the freedom to express their opinions in detail.
The researcher will administer all the questionnaires personally and ensure that
respondents chosen have relevant knowledge on the subject under discussion and can
answer the questions without any assistance or influence. Another advance of personal
administration of the questionnaire is that the researcher can be assured of receiving the
entire questionnaires back within the expected time frame. It will grant both the
researcher and the respondents to meet in person and if the need be, ask each other any
further probing question(s) on the subject under discussion.
7

All the data acquired from the field will be processed, analyzed and presented using
SPSS together with other relevant Microsoft office toolkit. Results will cover the main
questions on the questionnaire. Every question on the questionnaire will be analyzed.

1.9

Organization of the Study

This chapter forms the introductory basis for the entire research by outlining the primary
guideline of the research. Its composition is as follows: The background to the study,
problem statement, research objectives, research questions, significance of the study, the
scope of the work, and organization of the chapters
Chapter two seeks to explore the broad theoretical literature on internal audit control and
its impact on customer service. This is relevant mainly because it highlights the concept
of internal audit control in the current banking terrain in Ghana, as a whole and the bank
under the study specifically and its overall impact on customer service delivery. The
research questions will form the guideline for which this review is undertaken.
Chapter three embodies the methodology, population / target Population and sample size.
It also has the sampling techniques and methods of data collection [Questionnaire,
Interview, Focus Group Discussion, etc.] as part of its constituents.
Chapter four will deal with the processing, analyses and presentation of the data acquired
from fieldwork. The analysis will be executed with the aim of answering the research
questions set out in chapter 1 and the literature reviewed in chapter 2.
Chapter five covers the summary of the findings, recommendations, the limitations of
the study and relevant conclusions.
8

CHAPTER TWO
LITERATURE REVIEW

2.1

Introduction

This chapter provides the theoretical framework for the study. It reviews literature
relating to the following key aspects of the study: the impact of internal audit control on
customer experience in the banking sector, customers perception and experience of

customer service standards in the banking sector and customer satisfaction levels in terms
of processes involved in their day to day banking experiences.

2.2

The impact of internal audit control on customer experience in the

banking sector
Banks form the chief cornerstone of any financial system, and indeed of the economy of a
nation. At the heart of banking, is the audit function; this is evident by the fact that all
other departments are linked with the internal audit department. The importance of
internal audit system cannot be overemphasized where a variety of requirements
processes that are both manual and information communication technology-based (ICT)
are used. Organizations have recognized internal audit function as a tool for ensuring
effective workings of the internal control system. Okolo (2001) describes the internal
audit function as an aspect of control mechanism, within a business, manned by specially
assigned staff.
In todays volatile business environment, banks, particularly the banking sub-sector in
Nigeria face a wide array of complex business challenges. These challenges come in the
form of regulatory compliance, litigation, competitive market pressure, changing
technology, investors demand, corporate governance, business ethics and accountability.
In a business environment, anyone given the opportunity and the environment can
commit fraud, thus the importance of the internal audit function. Osenis (1994) findings
reveal that an effective internal audit function reduces overheads, identifies ways to
improve efficiency and minimizes exposure to possible losses.

10

According to Lav (2004), the internal audit function provides an independent and
objective appraisal of activity for management. Katz (2002) summarizes the core
activities of internal audit as analysis of data, recommendation, counsel and information
activities. He argues that these activities operate to accomplish the mission of banking,
currency management, and customer service. Young (2005) finds out that the internal
audit functions assist management in achieving a banks financial and operational goals
by evaluating controls, identifying weaknesses, and providing recommendations through
complete and unrestricted access to records, property and personnel. Katz (2002)
maintains that internal auditors in the banking sub-sector, until recently, had focused
mostly on broad corporate controls and risk. He however argues in favour of having an
internal unit that has all the coordinated methods and measures intended to safeguard an
organizations assets, check the accuracy and reliability of accounting data with emphasis
on micro or individual controls at the level of transaction. To achieve this, it is argued that
internal audit function be placed under the supervision of a committee of the board to
ensure independence, promote effectiveness of the function rather than the control and
direction of management. This function, according to Qslerguard (2000), should be
complemented by ensuring that the audit staffs do not perform functions and
responsibilities outside the traditional functions of the audit staff.
Internal audit independently reviews and evaluates the adequacy of the system of internal
controls and makes recommendations to management to improve these controls. Young
(2005) categorizes these controls into administrative and accounting controls.
Administrative controls relate to controls designed to promote operational efficiency,

11

effectiveness and adherence to banks policies and procedures. Accounting controls are
designed to safeguard the banks assets and ensure the accuracy of financial records.
Siayor (2010) also cites CIMAs (2006) definition of internal control as the whole system
of internal controls, financial and otherwise, established in order to provide reasonable
assurance of: (a) effective and efficient operation; (b) internal financial control and (c)
compliance with laws and regulations. While internal control systems include all the
policies and procedures (internal controls) adopted by the directors and management of
an entity to assist in achieving their objectives of ensuring, as far as practicable, the
orderly and efficient conduct of a business, including adherence to internal policies, the
safeguarding of assets, the prevention and detection of fraud and error, the accuracy and
completeness of the accounting records and the timely preparation of reliable financial
information (Siayor 2010).
According to Siayor (2010), a strong internal control is one of the best defenses against
business failures and an important driver of business performance. Therefore the usual
question that is asked when a vibrant organization suddenly goes bankrupt is what went
wrong? The answer points to weak controls most of the time. After assessing key risk
areas of an organization, these risks would need to be managed in line with a defined risk
management strategy. One major component of this strategy is appropriately derived
internal controls that seek to mitigate unacceptable levels of risks. Each control will
address a defined risk or be part of a regulatory requirement that in turn addresses the risk
of breaching laws, procedures and rules.

12

The well known definition for internal control all over the world is given by COSO and
according to it: Internal control is broadly defined as a process, effected by an entitys
board of directors, managers and other personnel, designed to provide reasonable
assurance regarding the achievement of objectives in the following categories:

Effectiveness and efficiency of operations.

Reliability of financial reporting.
Compliance with applicable laws and regulations.

According to the COSO framework, internal controls are put in place not only to help
companies reach profitability goals and achieve their missions, but also to minimize
surprises along the way. An internal control system enables management to deal with
quickly changing economic and competitive environments, market changes such as
shifting customer demands and priorities and restructuring.
So what then is internal control? There seems to be no distinct answer to this question. It
could mean different things to different people, which could be a factor of confusion
among business people, legislators, regulators and others. Misunderstandings and
different expectations could easily lead to problems within organizations and these
problems could get even more apparent when the term, if not clearly defined, is written
into laws, regulations and or other official documents. The COSO report deals with the
needs and expectations of managers and others and describes internal control in order to
establish a common definition that serves the needs of different parties and to provide a
standard against which organizations can assess their control systems and determine how
they can be improved. According to the report everyone in the organization is responsible
for the internal control, yet in different ways. Management is responsible for the

13

establishment of internal control policies and procedures. Management is again

accountable to the board of directors, who is responsible for providing governance,
guidance and oversight and all personnel are responsible for reporting problems, such as
policy violations or illegal actions.
Traditionally, the accounting professions definition of internal control was focused on
financial reporting and compliance aspects of control. However, the definition provided
by AICPA in 1949 includes operational, financial reporting and compliance aspects of
internal control (Mautz and Winjum, 1981). This definition was amended in 1958 and
1972 successively and then separated these controls into accounting controls and
administrative controls. AICPA directs accountants and auditors attention on traditional
accounting controls such as authorization, segregation of duties, cross-checking, in order
to minimize litigation risks. This narrows the focus of control. The reason(s) for
restricting accountants and auditors responsibility to accounting and administrative
controls is much of a debate.
As a result of technological advancements and changing management techniques,
organizations employ less people and are therefore less able to perform many internal
accounting controls, for example, layers of authorization, cross-checking, segregation of
duties, supervision et cetera. A range of control elements is therefore required in order for
internal controls to be effective.
The COSO framework shows three objectives: Operations (which has to do with how
effective and efficient an entity uses its resources), Financial Reporting (which deals with
the preparation of reliable financial statements) and Compliance (which relates to an

14

organizations compliance with applicable laws and regulations). The framework also
identifies five basic control components: Control Environment, Control Activities, Risk
Assessment, Information and Communication, Monitoring and the different units of
application. The objectives show what an organization strives to achieve and the
components show what is needed to achieve these objectives at different levels of the
organization. All the components are related to each objective. For example, when talking
about the reliability of financial reporting, all the five components must be present and
functioning effectively in order to conclude that an organizations internal control over
reliable financial information is effective.

Figure 2-1 COSO Internal Control

15

Source: Adapted from the 2004 COSO

Effective internal control requires a strong control environment under which the other
components are implemented. The principles underlying good control and commitment to
sound control compliance must be present so as to ensure healthy interactive control
structure. Risk assessment forms the basis for determining where internal control
activities are needed. This enables the organization to focus on those risks that will
impact on the overall success of the firm. Communicating information resulting from the
exercise of internal controls keeps key personnel and management informed of potential
problems. An effective monitoring system is an ongoing assessment programme that
oversees the design, implementation and effectiveness of controls in mitigating risks.
Internal control must also be tailored to meet the needs of the individual business. This is
because the more elaborate an organizations control systems, the greater the cost. The
scandals of recent years emphasized the need to evaluate, scrutinize and reformulate
control systems of checks and balances in order to guide corporate executives and
persons in decision-making. Therefore as much as an organization would like to
implement appropriately derived control measures; it must also consider the amount of
money involved in implementing such measures.
Finally, there is the need for companies to have a risk protection strategy (Chorafas,
2008). Insurance is known to be one of the methods used by companies as risk financing
in order to obtain financial protection against the impact of risks. However, it must be
noted that losses such as organizational reputation and employee morale are uninsurable

16

and difficult to regain once they are lost. Therefore, organizations must put in effort to
maintain their reputation and goodwill, Siayor (2010).

2.3

A Brief History of Internal Auditing

According to Pickett (2004:10), internal auditing has come a long way over the last two
or three decades. In the past, internal auditing was seen as a mechanism to double-check
the thousands of financial transactions that were posted to the accounts each week. In the
1950s and 60s, it only consisted of basic tests of the accounts with a view to isolating
errors and irregularities. Huge standardised auditing work programmes would be
prepared that determined the steps that had to be taken to verify figures in the main
accounting ledger and feeder systems. In contrast, todays internal auditor facilitates the
development of suitable controls as part of a wider risk strategy, and provides assurances
on the reliability of these controls. The move from detailed low-level checks of huge
volumes of mainly financial transactions to high-level input into corporate risk strategies
has been tremendous. Rudasingwa (2006)

2.4

Customers perception and experience of customer service standards in

the banking sector

Parasuraman, A., Zeithaml, V.A. and Berry, L.L. (1994), developed an instrument for
measuring customers perception of Service Quality, which became known as
SERVQUAL. They collapsed their dimensions for measurement from ten to five as
follows:
1. Tangibles physical facilities, appearance of personnel and equipment
2. Reliability ability to perform the promised service dependably and accurately
3. Responsiveness willingness to help customers and provide prompt service
17

4. Assurance - Assurance (combination of items designed originally to assess

Competence, Courtesy, Credibility, and Security) ability of the organizations
employees to inspire trust and confidence in the organization through their knowledge
and courtesy.
5. Empathy - Empathy (combination of items designed originally to assess Access,
Communication, and Understanding the customer) personalized attention given to
customer.
Service quality is important in the retail-banking sector. Some of the reviewed literatures
are presented below:
Bahia and Nantel (2000) developed a new measurement for perceived service quality in
Retail Banking as a means to counter against the weaknesses of the SERVQUAL
instrument. They proposed a scale that was called Bank Service Quality (BSQ). It
comprises 31 items classified across six dimensions as: effectiveness and assurance,
access, price, tangibles, range of services offered and accuracy and reliability. They
proved that the dimensions of BSQ are more reliable than the dimensions of
SERVQUAL. Glaveli et al. (2006) stated that BSQ is more reliable than SERVQUAL.
Stafford (1996) conducted research to identify the core elements of BSQ and identified
seven attributes in assessing BSQ. They are as follows:
1. Bank atmosphere - environment of the bank including the attitude of the staffs.
2. Relationship - it indicates the personal relationship with the bank employees.
3. Rates and charges - an individuals perception of BSQ is affected by the low cost and
high interest rates.
4. Available and convenient services - it indicates the full range of available services,
convenient and easily
5. Accessible

18

6. ATMs - it indicates the availability of the automatic teller machines.

7. Reliability/honesty - it emphasizes on the solid bank ratings and reliable, honest staff.
8. Tellers - enough and accessible tellers.
The applicability of the SERVQUAL measure is well established in the retail banking
industry. Angur et al (1999) stated that SERVQUAL is the best measure of service quality
in the retail banking industry in developing country. Most of the researchers use the
SERVQUAL measure or the modified SERVQUAL measure in the retail banking
industry.
Customer Satisfaction is one of the most important outcomes in the marketing literature.
It serves to link processes culminating in purchase and consumption with post purchase
phenomena such as attitude change, repeat purchase, and brand loyalty (Surprenant and
Churchill, 1982). This definition is supported by Jamal and Naser(2003) and Mishra
(2009).
According to Oliver (1980), the customer satisfaction model explains that when the
customers compare their perceptions of actual products/services performance with the
expectations, then the feelings of satisfaction have arisen. Any discrepancies between the
expectations and the performance create the disconfirmation. Oliver (1980) identified
three types of disconfirmation. They are:
1. Positive disconfirmation occurs when Product/service performance expectations. In
this case, the customers are highly satisfied.
2. Negative disconfirmation occurs when Product/service performance expectations. In
this case, the customers are highly dissatisfied.
3. Zero disconfirmation occurs when Product/service performance = expectations.

19

Based on the above literature and definition of satisfaction, Giese and Cote (2000)
identified the following components of satisfaction:
1. Customer satisfaction is one kind of response (cognitive or emotional)
2. The response emphases on a particular focus (product, consumption experience,
expectations etc.)
3. The response occurs at a particular time (after choice, based on accumulated
experience, after consumption etc.)
In the competitive business market, many firms are focusing on their efforts on
maintaining a loyal customer base. Most of the retail banks set their strategies towards
increasing satisfaction and loyalty of customers through the quality of service. Devlin
(2001) pointed out that customers perceive very little difference in the services offered
by retail banks and any new offering is quickly matched by competitors.
Zaim et al (2010) find out that tangibility, reliability and empathy are important factor for
customer satisfaction, whereas responsiveness and assurance are important factor, found
by Mengi (2009). Kumar et al. (2010) and Lai (2004) found that assurance, empathy and
tangibles are the important factor, and on the other hand, Baumann et al. (2007) found
that tangibles are not related to customer satisfaction and Ahmed et al. (2010) find out
that empathy is negatively related to customer satisfaction. Researchers have identified
various determinants of customer satisfaction in the retail-banking sector. Arasli et al
(2005) pointed out that reliability dimension of SERVQUAL has the highest impact on
customer satisfaction in Greek Cypriot banking industry, whereas reliability is not related
to customer satisfaction, found by Chaniotakis and Lymperopoulos (2009). According to
Levesque and McDougall (1996), competitive interest rate is one of the important

20

determinants of customer satisfaction in retail banking sector. They found that a good
employee-customer relationship could increase the satisfaction level. They pointed out
that problem-recovery is important to maintain the customer satisfaction.
However, the results did not confirm that satisfactory problem-recovery can increase
satisfaction. At least, it can maintain the satisfaction level. Finally, they concluded that
competitiveness and convenience of the banks are the two important determinants of
customer satisfaction. On the other hand, Jamal and Naser (2003) found that convenience
and competitiveness are not the critical factors for all gender, age and income groups.
Siddiqi (2011)

2.5

Customer satisfaction levels in terms of processes involved in their day

to day banking experiences

In the present banking system, excellence in customer service is the most important tool
for sustained business growth. Customer complaints are part of the business life of any
corporate entity. This is more so for banks because they are service organizations. As a
service organiza-tion, customer service and satisfaction should be the prime concern of
any bank. The bank believes that providing prompt and efficient service is essential not
only to attract new customers, but also to retain existing ones, Uppal (2010)

2.6

Concept of Customer Satisfaction

According to Wandaogou & Jalulah (2011), customer satisfaction has been defined in
different context by different authors. They give some of these definitions as folllows:

21

Customer satisfaction is a psychological concept that involves the feeling of

wellbeing and pleasure that results from obtaining what one hopes for and expects

from an appealing product and/or service (WTO, 1985);

CS as an attitude-like judgment following a purchase act or a series of consumer

product interactions. Youjae Yi, (1990 cited in Lovelock &Wirtz, 2007);

CS is a consumers post-purchase evaluation and affective response to the overall

product or service experience. (Oliver, 1992);

Satisfaction is merely the result of things not going wrong; satisfying the needs and

desires of consumers. (Besterfield, 1994);

Satisfaction as pleasure; satisfaction as delight (Kanji and Sa Moura, 2002);
CS is an experience-based assessment made by the customer of how far his own
expectations about the individual characteristics or the overall functionality of the

services obtained from the provider have been fulfilled. (Bruhn, 2003);
Satisfaction is a persons feeling of pleasure or disappointment resulting from
comparing a products performance (outcome) in relation to his or her expectation.

(Kotler& Keller, 2006 p. 144).

The process of customer overall subjective evaluation of the product/service quality
against his/her expectation or desires over a time period. (Gyasi & Azumah, 2009).
Wandaogou & Jalulah (2011)

Cohen et al (2006) indicate that customer satisfaction has for many years been perceived
as key in determining why customers leave or stay with an organization thus
organisations need to know how to keep their customers, even if they appear to be
satisfied. They explain that in businesses where the underlying products have become
commodity-like, quality of service depends heavily on the quality of its personnel. This is
well documented in a study by Leeds (1992), who documented that approximately 40
percent of customers switched banks because of what they considered to be poor service.

22

Leeds further argued that nearly three-quarters of the banking customers mentioned teller
courtesy as a prime consideration in choosing a bank. The study also showed that
increased use of service quality/sales and professional behaviours (such as formal
greetings) improved customer satisfaction and reduced customer attrition.
Reichheld (1996) cited in Cohen et al (2006) suggests that unsatisfied customers may
choose not to defect, because they do not expect to receive better service elsewhere.
Additionally, satisfied customers may look for other providers because they believe they
might receive better service elsewhere. However, keeping customers is also dependent on
a number of other factors. These include a wider range of product choices, greater
convenience, better prices, and enhanced income (Storbacka et al., 1994). Fornell (1992),
in his study of Swedish consumers, notes that although customer satisfaction and quality
appear to be important for all firms, satisfaction is more important for loyalty in
industries such as banks, insurance, mail order, and automobiles.Cohen et al (2006).
Al-Hawary S.I.S, Alhamali R.M., Alghanim S.A., (2011), also point out that customer
satisfaction is another important aspect for service organizations and is highly related
with service quality. In today's world of intense competition, the key to sustainable
competitive advantage lies in delivering high quality service that will in turn result in
satisfied customers. As service quality improves, the probability of customer satisfaction
increases. In this way, the association between service quality and customer satisfaction
has emerged as a topic of significant and strategic concern. Oliver (1997) defines
satisfaction as the consumers fulfillment response, a post consumption judgment by
the consumer that a service provides a pleasing level of consumption-related fulfillment,
including under- or over-fulfillment. Customer satisfaction is viewed as influencing

23

repurchase intentions and behavior, which, in turn, leads to an organizations future

revenue and profits. As a result of the direct link with profits, the issue of service quality
and customer satisfaction has become a focus of banking industries. Al-Hawary et al
(2011)

2.7

Factors of Customer Satisfaction

Satisfaction is an overall customer attitude towards a service provider'' (McDonald

2002) or an emotional reaction to the difference between what customers anticipate and
what they receive regarding the fulfillment of some need, goal or desire. (Zineldin 2006)
Customer satisfaction brings many benefits. Satisfied customers are less price sensitive,
buy additional products, are less influenced by competitors and stay loyal longer
(Zineldin, 2006). Cohen et al (2006) also view customer satisfaction as influencing
repurchase intentions and behavior, which, in turn, leads to an organizations future
revenue and profits. As a result of the direct link with profits, the issue of service quality
and customer satisfaction has become a focus of the banking industries. More and more
companies are compelled to assess and improve their service quality in an effort to attract
customers.
Customer satisfaction has for many years been considered as key in determining why
customers change service providers or remain loyal to an organisation. According to
Reichheld (1996) cited in Cohen et al (2006), unsatisfied customers may choose not to
defect, because they do not expect to receive better service elsewhere. Additionally,
satisfied customers may look for other providers because they believe they might receive
better service elsewhere. However, retaining customers is also dependent on a number of

24

other factors, which include a wider range of product choices, greater convenience, better
prices, and enhanced income.
According to Fornell (1992) cited in Al-Hawary, Alhamali, & Alghanim, (2011) although
customer satisfaction and quality appear to be important for all firms, satisfaction is more
important for loyalty in industries such as banks, insurance, mail order, and automobiles.
The question that must be asked however is: what are the factors that contribute to the
satisfaction of the customer? Is it the product or the service?
Several factors affect customer satisfaction. Amankwah & Ohene-Adu (2011) argue that
the variety of products that banks offer their customers can lead to customer satisfaction
or dissatisfaction. Consumers do not buy a product or service for its own sake, they buy
to acquire benefits that the product offers i.e. they buy to satisfy a need. Products
therefore exist for what they fulfill in terms of consumer needs. It is the essential feature
or benefit that the buyer expects to receive from using the product that motivates buying
behavior. They gave the example that a customer who opens a savings account for
instance is not buying a passbook or a card but rather a safe deposit, which will earn him
interest. Therefore when the interest rate offered by one bank is low in comparison with
other banks, it will cause that customer to be dissatisfied.
They also added that the features of a product can differentiate it from others in the
product category and create customer satisfaction or dissatisfaction. Features such as
reliability or high performance may be associated with a particular product from a
particular service provider. They gave the example that where a bank introduces a savings
account that offers a life assurance policy cover to the holder, it can be seen as

25

introducing a feature to differentiate their savings account from those of their

competitors. This may cause a customer at another bank to leave his/her bank and join the
innovative bank in order to enjoy this facility.
They also added that when the interest rates, for example, charged on loans by a bank is
high, customers may have difficulty repaying such loans and so may become dissatisfied
and may leave to open accounts with other banks where interest on loans is low (Boateng,
1994) cited in Amankwah and Ohene-Adu (2011).
In the service industry, packaging includes the treatment a customer receives on opening
an account. Another service element that causes customer satisfaction or dissatisfaction is
the people or the employees delivering the product or service (Covey, 2004 cited in
Amankwah and Ohene-Adu 2011). The employees occupy the first point of contact with
the customer. Employee behaviors are therefore important to customers. If the employee
is cold or rude the customer takes it as a measure of the state of the firm.
According to Amankwah and Ohene-Adu (2011), a friendly employee or staff therefore
adds to customer satisfaction and helps to promote the image of the organization in the
eyes of the customer and the general public. However, some employees will do a better
job of satisfying customers than will others regardless of the quality of training, reward,
and recognition programs afforded them. The service delivery process also plays a key
role in customer satisfaction. When the process of service delivery is too long, it
lengthens customer-waiting time. If for example, a cheque for a certain amount of money
has to be signed by two officials in the bank before payment is made, it causes delay and
customers may get irritated for having to wait too long. Customers may even get

26

frustrated with reward programs so that rather than creating loyalty and goodwill, they
actually breed dissatisfaction. Examples are; when customers feel they are excluded from
a reward program because of low balances or volume of business, or if the rewards are
seen as having little or no value, and if redemption processes are cumbersome and time
consuming.
Amankwah & Ohene-Adu (2011) also cited physical evidence as a major factor that
influences customer satisfaction. Physical evidence includes the edifice or buildings and
its decorations, an imposing banking hall with comfortable seats, very spacious and
modern. Such tangibles: the building and its external and internal decorations can satisfy
a customer such that the customer will take pride in being a customer of that bank. Also,
easy access to the bank premise would make a customer feel happy to transact business
with the bank, for example, if the bank premise is located on a major street. However, the
nice building or a banking hall will not be noticeable if customer service is poor, there are
unnecessary delays or there is lack of personal support from staff.
The technology being used by the bank in service delivery is another factor that could
influence customer satisfaction, according to Amankwah and Ohene-Adu (2011). When
electronic devices such as computers are used, they speed up the processing time of
transactions. The security of customers and their deposits is another area of concern to
customers. When customers are assured of protection from external threats they feel
secured and happy. For example, if a bank is situated at a place noted for criminal
activities, customers are scared and dissatisfied (Sasraku, 2007 cited in Amankwah &
Ohene-Adu 2011).

27

Ioanna (2002) however argues that service quality is the key factor in customer
satisfaction. According to the author, product differentiation is impossible in a
competitive environment like the banking industry because banks everywhere deliver the
same products. For example, there is usually only minimal variation in interest rates
charged or the range of products available to customers. Bank prices are fixed and driven
by the marketplace. Thus, banks tend to differentiate themselves from competitors
through service quality. Service quality is an imperative element impacting customer
satisfaction levels in the banking industry. In banking, quality is a multi-variable concept,
which includes differing types of convenience, reliability, services portfolio, and
critically, the staff delivering the service. Cited in Cohen et al (2006)

2.8

Strategies to Enhance Satisfaction and Mitigate Complaints

Uppal (2010) argued that banks could put in place key strategies to enhance the
satisfaction of their customers and mitigate customer complaints. These he outlined as
follows:
1.

All banks should constitute customer service committees and appoint nodal
officers and other designated officials to handle complaints and grievances.

2.

Nodal officers should conduct meetings with the customers

3.

There should be trained, honest, polite, sensitive operating staff to handle the
complaints.

4.

Understanding customer experience and its implication: Our experience shows

that there are multiple layers of customer experience with a bank. The banks

28

deliver customers through management of lower order satisfaction as well as

higher order loyalty. The failure to do so usually results in sub optimal customers.
5.

Appreciating the fact that internal or external process audits are not substitutes for
active motion studies in gauging the accuracy and reliability of service delivery:
Some banks also use the external mystery customer technique. It is critical to
understand that these initiatives simply benchmark delivery against intentions.
Even if the delivery is as per intention, there could be a problem with delivering
customers. So banks should use judicious mix of process audits and voice of
customer (VOC) studies such as customer satisfaction/loyalty studies.

6.

Establishing the link between superior customer experience and a tangible

business outcome such as customer retention or customers share of wallet. Our
experience shows that loyal customers tend to stay with the bank and use more of
its products and services. Also, customer satisfaction is one of the many factors
influencing customer loyalty, but only a healthy mix of all components of
customer loyalty goes towards changing business outcomes.

7.

Bridging the gap between top management and actual implementation: Banks
should invest in adequate training and resources incentives for key staff and
follow a goal action plan in their quest to realize the vision banks.

8.

Providing different strokes for different folks within the bank: Banks should set
up a system of interlocking and relevant goals, and as such, train employees and
deliver incentives to customers in their domains

29

9.

Making effective uses of internal customer profile/history data: Banks should

make use of extensive customer information not just for selling and fraud
detection, but also to gather customer insights.

10.

Keeping front line staff engaged and motivated, since service delivery has high
correlation with the motivational levels of banks front line staff: Banks should
look at managing employee equity as the key component towards service delivery.
Uppal (2010)

30

CHAPTER THREE
METHODOLOGY

3.1

Research Design

This research will be completed using the two main and most popular research
approaches: qualitative and quantitative approaches. The use of these two approaches will
enable the researcher to analyze and present findings in a very presentable manner.
Maxwell (1996) suggests qualitative methodology is very useful when assessing
improvement in existing practice rather than simply assessing the value of the system
being studied. This is because Leedy & Ormrod (2005) also stated that qualitative
research provides a means through which a researcher can judge the effectiveness of
particular policies, practices, or innovations. This research seeks to study an already
existing practice and as such adopting qualitative research approach is very acceptable
per the explanation of previous researchers.
Another very plausible characteristic of qualitative research approach is that it aids in
giving a broader and clearer understanding of situations from different viewpoints, Taylor
and Bogdan (1997). It also gives a more open ended and more flexible option for the
researcher, Patton (1990).
On the contrary, Perry et al. (2005) argues that quantitative approach gives a high level of
confidence to the researcher because it is designed by giving findings through specific
measurements. It comes in a more narrow and structure form, (Miles & Huberman
1994), and so is mostly seen as having a clear guideline, boundaries and limits. Creswell

31

(2003) explains that quantitative approach employs strategies of inquiry such as

experiments and surveys and collects data on predetermined instruments that yield
statistical data. Thismeansthatthequantitativeapproachisalsoarightchoicebythe
researchersincethefindingsoftheresearchwillbesortinalimited,timeboundand
clear cut manner. It is also useful because it applies statistical analysis and exhibits
quantifying data that is the outcome of analyzing collected numerical data.
Goetzee, (2004) buttresses that point of which type of approach to adopt by saying that
research analysis may be either qualitative or quantitative, but should be consistent to
permit comparisons. This is another direction that the researcher will follow to ensure
that the analyses and findings of this research is consistent as expected.
The findings of the research will be presented using the descriptive research approach.
Descriptive research approach will describe things and situations by providing measures
of an event or activity. Descriptive research can help questions such as which brands are
most preferred? What advertisements are most effective? This is mainly because the
descriptive research designs are usually structured and specifically designed to measure
the characteristics described in a research question, (Hair, Babin, and Money & Samouel
2003). Saunders, Lewis &Thornhill (2000) states that the object of descriptive research is
to portray an accurate profile of persons, events of situations. It is necessary to have a
clear picture of the phenomena on which researcher wish to collect data prior to the
collection of the data.

32

3.2

Sources of Data

For the completion of this study, we will adopt the two most dominant sources of data
being the primary and secondary sources of data.
Hair et al., (2003), stated that primary data can mostly be gathered through observation,
interviews and/or questionnaires. This study will mainly use questionnaire to sort for the
primary data. The use of primary data is purposively to help gather information and data
to help answer specific research questions. Denscombe (2000) states that questionnaires
are relevant for gathering detailed data from specific respondents chosen by the
researcher. It has a high level of originality and also its a first hand source of data for the
researcher. Because the researcher collects primary data in the first place, the ability to
control and manipulate that data is very high and so the collection of primary data can be
said to be flexible in nature.
The known setback of primary data collection is that it is both time and financially
demanding and Bryman and Bell, (2007) also stated that primary data can be too large to
carry out and sometimes the findings are not feasible.
On the other hand, secondary data is gathered from already existing sources such as
research reports, library archives, annual reports, journals, textbooks, newspapers and
published articles. These sources give the researcher a lot of option on the kind of
information to use in his/her research.
Secondary data is a suitable option for this study because of the low turnaround time for
the collection of adequate primary data and also primary data alone cant be used. The
secondary data had a lot of impact on the literature review of this study because of its

33

easy accessibility. Gathering secondary data saves a lot of time and cost and is mostly of
high quality as well. Although secondary data is an already existing data, the researcher
gets more time to review and possibly reanalyze data for any possible new finding(s).
Some of the setbacks of secondary data is the lack of familiarity of the method used in
the initial stage for the data as well as the possibility that some secondary data can be
outdated, complex and sometimes the researcher has no control over the quality of data
being accessed, (Bryman and Bell, 2007).
Bryman and Bell, (2007) concluded on these two sources of data by stating that primary
data is material that authors collect themselves, while secondary data is material that
others have collected earlier. The same applies to this research; the researcher used
relevant secondary data where the need be but ensure that the right and most appropriate
primary data was collected to help in the realization of the research objectives.

3.3

The Unit of the study

For this research, the unit of the study is the United Bank for Africa, being chosen as a
case for all commercial banks in Ghana. The study will cover customers of the bank as
well.
The main respondents chosen for this study will be internal audit, customer service and
quality control departments of the bank as well as randomly selected number of
customers.

34

3.4

Population and Sample Frame

The population for whom this study is intended to have influence on, is the entire banking
population in Ghana as well as customers who patronize the services of these banks. The
entire staff membership of the internal audit, customer service and quality control
departments will be part of the population coupled with the entire customer base of the
case under this study.
These departments are the departments know for the execution and implementation of the
internal audit policy of the bank. The findings of the study can be generalized to represent
the general situation in the entire banking sector in Ghana.

3.5

Sample size

The banking sector in Ghana is very large now. It has about 29 commercial banks with
universal banking license and other various financial service providers. The researcher
has therefore decided to sample only one case study, United Bank for Africa. This choice
was made taking into consideration the financial challenges as well as the limited time
available to the researcher.
Any attempt to expand the sample size would have meant more financial burden and time
constraints on the part of the researcher. The chosen case for the study is highly reflective
of the happening on the broader market.

35

3.6

Sampling technique

The purposive sampling technique is the sampling technique adopted for this study. This
sampling technique will aid the research to collect data in the most feasibility manner in
order to be able to answer the research questions and ultimately achieve the objectives of
the research as explained by Saunders et al., (2003).
Because the researcher wanted to use a particular group of respondents, a non-probability
sampling is preferred over other because the respondents will have to be those with a
clear understanding of the problem being researched into by the study. It is therefore
reasonable that an in-depth response was sort on sample purposively selected in
accordance to the standards of purposive sampling as enumerated by Saunders et al.,
(2003). This approach will also deemed more viable because all the respondents shared
some common characteristics in terms of the subject under study.
The researcher took a critical thought over this choice of sampling technique based on
previous research by Holme & Solvang (1997) in which they stated that the selection of
respondent is crucial in the sense that if the wrong respondents are interviewed, the
research may turn out to be invalid or worthless since the responses will not reflect the
exact situation prevailing on the ground.

3.7

Data Collection Instrument and Analysis

The major data collection instrument for this study is the questionnaire. The researcher
arrived on the choice of question after taking a reference from Saunders et al. (2009).
They stated that the efficiency of the use of questionnaire in gathering responses for large
sample size is very high. It enables the researcher to have responses to a range of

36

questions by a wide range of respondents and it is a widely used technique in research

data collection.
The questionnaire to use is of a semi-structured type, which contained both open ended
and closed ended questions. The choice to develop a semi structured as compared to a
fully structured questionnaire was adopted from Jankowicz (2000) who argued that a
semi-structured interview differs from a conversation, because the topic and issues to be
covered have been determined in advance. The questionnaire is administered in person by
the researcher and collected back in the same manner. This approach will enable both the
researcher and respondent(s) to have the freedom to probe further on any gray areas in
the questionnaire or even the core subject under discussion in the study.
Remenyi et al., (1998) emphasized that data collection approach has high influence on
the research method and findings meaning that the choice of research data collection
instrument will also have a high influence on the data gathered for the study.
After the collection of the field data, the next step is to analyze the data and present the
findings in the most appropriate and accepted manner. The manner in which the data
collected is analyzed is as important the data collection process itself. Zikmund, (2000)
explained that at the stage of data analysis, summary and rearrangement of the field data
and other relevant interrelated activities are performed
For the smooth execution of the data analysis for this research, the responses of the
administered questionnaire is compiled together using the Statistical Package for Social
Scientist [SPSS], which will drastically reduce the turnaround time for the analysis as
well as ease up the cumbersome process involved in achieving the right results.

37

Because the findings will have to be present in an appropriate manner, the compiled
outcome of the SPSS is transferred to Microsoft Excel for the right analysis to be done.
After this process, the researcher using Microsoft Word presents the final outcome of the
findings. The researcher adopted both statistical and narrative methods for analyzing the
data so that both qualitative and quantitative features of the results will be captured in the
presentation of the findings.

3.8

Brief Profile of the Case Study United Bank for Africa

United Bank for Africa (UBA-Ghana) Limited is a subsidiary of the United Bank for
Africa PLC which is one of the Africas leading financial institutions offering services to
more than 7 million customers across 750 branches and over 2000 ATMs in 19 African
countries. The objective of UBA Ghana is to democratize banking with excellent
customer driven solutions. The bank seeks to bring financial services to a majority of the
Ghanaian populace and make it a basic entitlement for all. UBA Ghana has a footprint of
26 fully networked branches and 40 ATMs (VISA enabled) spread across Accra, Tema,
Kumasi, Takoradi and Aflao.
The banks vision is to be the undisputed leading and dominant financial services
institution in Africa. With presence in New York, London and Paris, UBA is connecting
people and businesses across Africa through retail and corporate banking and innovative
Africa Trade Platform - a seamless payments and collections initiative to facilitate and
ease settlement and encourage trade across Africa.
UBA have broad objectives to create an institution that competes effectively in the global
financial market place in a manner that showcases the best of African enterprise. UBA is

38

aspire to have collective vision to become the bank of choice for transactions involving
Africans and African Businesses, and being the leading provider of offshore
correspondent banking services to financial institutions and corporations in Africa.

CHAPTER FOUR
DATA ANALYSIS AND PRESENTATION

39

4.1

Introduction

The chapter gives an analysis of data gathered on examining whether internal control has
negative or positive effect on the customer service of banks, specifically UBA Ghana.
The chapter begins with the background of the respondents and then continues with the
Impact of internal audit control on customer experience in United Bank for Africa,
Kumasi Branches, the level of understanding of customer service staff in terms of internal
audit control system, Customers Perception and Experience of Customer Service
Standards and Customer Satisfaction

4.2

Background of the Respondents

A total of 50 questionnaires were sent to staffs of the United Bank of Africa as per the
sample size estimated for study. In all 45 questionnaires, representing 90 percent
responsive rate was attained. On the other hand, 120 customers were sampled for the
study, 112 questionnaires were received from the customers. This represent 93 percent
responsive rate. The high responsive rate attained, add more weight to the validity of the
study. The background of the respondents is discussed below.

40

4.2.1

Gender of the Respondents

Figure 4-2 Gender Distribution of Respondents

Source; Field survey, 2013

The figure above shows the sex distribution of the respondents (both staffs and
customers). From the figure, it can be observed that, 68 of the customers interviewed,
representing 60.7 percent were males while 44 representing 39. 3 percent were females.
In a similar manner, 26 of the staffs interviewed representing 57.8 percent were males
while 19 of them representing 42.2 percent were females.

41

4.2.2

Age Distribution

Table 4:1 Age Distribution of Respondents

Age

Customers

Staffs

Total respondents

Count

Percent (%)

Count

Percent (%)

Count

Percent (%)

20-29

36

31.3

11

24.4

47

30

30-39

16

14.3

18

40

34

21.7

40-49

27

24.1

20

36

22.9

50-59

29

25.9

15.6

36

22.9

60+

3.6

2.5

Total

112

100

45

100

157

100

Source; field survey, 2013

From the table above, it can be seen that, 31.3 percent of the customers and 24.4 percent
of staff interviewed were between the ages of 20 -29. Respondents between the ages of
20-29, whom form majority of the total respondents, therefore constitute 30 percent of
the total respondents. The least of the total respondents however, are those of 60 years
and above who constitutes just 2.5 of the total respondents. Also, 22.9 percent each, of
the total respondents, were between the ages of 40-49 and 50-59 while 21.7 percent were
between the ages of 30-39. This shows the sampled population is well representative in
terms of age.

42

Figure 4-3 Length of Employment & Banking Relationship

Source; Field survey, 2013

As part of the background of the respondents, the study sought to find out how long the
staffs have been on their jobs as well as how long customers have been in relationship
with the bank. The result shows that, only 6.7 percent of the sampled staffs have not had
up to one year on their job while only 12.5 percent of the customers have not had up to
one year relationship with the bank. However, 60 percent (that is, sum of all those
between 1-4 years) of the sampled staffs have had between one to four years experience
with the bank while 33.3 percent have spend five or more years with the bank. In much
the same way, 82.2 percent of the total sampled customers have had between on to four
years relationship with the bank while 5.4 percent have had five or more years of
relationship with the bank. This proves that both the sampled staffs and customers knows
much about the bank and can therefore give valid information about the operations of the
bank, relating to the subject under investigation.
43

4.3

Educational level of the respondents

Figure 4-4 Educational Qualification of Respondents

Source: Field survey, 2013

With regards to the educational attainment of the respondents, 71.1 percent of the staffs
were first-degree holders while 28.9 percent were second degree holders. Also 43.8
percent of the customers had attained secondary or college level education while 40.2
percent were first degree holders and 16 percent been second degree holders (see Figure
4.3). This shows that all the respondents are educated enough to be able to give
information needed for the study.

44

4.4

Impact of internal audit control on customer experience in United

Bank for Africa, Kumasi Branches

4.4.1

The Importance of the Implementation Internal

Control Systems in UBA

In an attempt to find out how in the view of the staff, internal control systems are
important to UBA, the staffs were asked to indicate this by answering item 1 of the staff
questionnaire by selecting very important, important, moderately important, of little
importance or unimportant. The findings after the collection of the data are presented in
the figure below.

Figure 4-5 Importance of Internal Control System

Source, field survey 2013

It can be seen from Figure 4.4 that a majority of the respondents (staff) are of the view
that the implementation of internal control systems in UBA is important as 46.7%

45

asserted to this. Also, 22.2% indicated that the implementation of internal control systems
is very important whiles 13.3% saw it as moderately important with 11.1% indicating that
it is of little importance and the remaining 6.7% which is the minority, pointing out that it
is unimportant. This therefore shows that implementing of internal control systems in
UBA is of great importance as most of the staffs supported this notion.

4.5

Customer Complaints emanating from the Implementation of Internal

Control Measures
The researcher also sought to find out whether customers make complains as a result of
the implementation of internal control measures by the bank. Item 2 of the staff
questionnaire therefore touched on this by asking respondents to indicate whether there
were very frequent, frequent, occasional, and rare or no complaints emanating from the
implementation of internal control measures by the bank. The figure below presents the
findings from the analysis of the data.

46

Figure 4-6 Customer Complaints

Source, field survey 2013

Figure 4.5 reveal that a majority of the respondents (staff), which is 40 percent, indicated
that there are frequent complaints from customers. 24.4 percent indicated that there are
occasional complaints while 13.3 percent pointed out there are very frequent complaints
from customers. Also, 17.8 percent indicated there are rare complaints from customers
with the remaining 4.4 percent holding the view that there are no complaints from
customers emanating from the implementation of internal control measures in UBA. The
implementation of internal control measures therefore according to the findings above,
brings about a lot of complaints from the customers of the bank.

47

We went on to find out the importance of certain factors taken into consideration in terms
of internal controls of the bank. Item 3 of the staff questionnaire touched on this issue.
The respondents were asked to indicate whether the factors presented in the table were
taken as very important (1), important (2), moderately important (3), of Little Importance
(4) or unimportant (5) by the bank. The findings from the analysis of the data are
presented in table 4.2 below
Table 4:2 Factors for Internal Control

Factors

Responses

Tangibility of service rendered

Reliability of service rendered

The responsiveness of staff to customers issues

and concerns

Assurance of superior service quality

Empathy towards the recipient(s) of service

Bank atmosphere - environment of the bank

48

16

(15.6
%)

(35.6
%)

(20%)

(11.1
%)

(17.8
%)

12

18

(26.7
%)

(40%
)

(17.8
%)

(11.1
%)

(4.4%)

10

12

13

(22.2
%)

(26.7
%)

(11.1
%)

(28.9
%)

(11.1
%)

11

14

(17.8
%)

(15.6
%)

(24.4
%)

(31.1
%)

(11.1
%)

12

15

(20%
)

(26.7
%)

(13.3
%)

(33.3
%)

(6.7%)

19

10

including the attitude of the staffs

Relationship: The personal relationship with the

bank employees.

Available and convenient services: The full range

of available services, convenient and easily

Reliability/honesty: The solid bank ratings and

reliable, honest staff.

Tellers - enough and accessible tellers

(13.3
%)

(42.2
%)

(22.2
%)

(17.8
%)

(4.4%)

10

20

(8.9
%)

(11.1
%)

(22.2
%)

(44.4
%)

(13.3
%)

13

10

10

(13.3
%)

(28.9
%)

(22.2
%)

(22.2
%)

(13.3
%)

11

16

(15.6
%)

(24.4
%)

(35.6
%)

(15.6
%)

(8.9%)

17

13

(37.8
%)

(13.3
%)

(15.6
%)

(28.9
%)

(4.4%)

Source, field survey 2013

From table 4.2 above, on the issue of tangibility of service rendered, it can be observed
that out of the total of 45 respondents, a majority of them that is 35.6 percent were of the
view that tangibility of service is an important factor. This is followed by 20 percent who
indicated that moderate importance is attached to this factor with a minority of them
(15.6%) indicating that the tangibility of service rendered is very important.
The study also looked at the reliability of service rendered. A greater percentage of the
respondents (40%) were of the view that this issue is important, 26.7 percent indicated
that it is very important. 17.8 percent also pointed out that it is moderately important
while out of the remaining 15.6 percent, 11.5 percent view it as of little importance and

49

the remaining 4.4 percent were of the view that the reliability of service rendered is not
an important factor to consider by selecting unimportant.
The responsiveness of staff to customers issues and concerns is also one of the factors
we considered. The data from table 4.1 reveals that a majority of the respondents (28.9
percent) were of the view that this issue is of little importance with a smaller percentage
of them that is 11.1 percent also asserting that the responsiveness of staff to customers
issues and concerns is of moderate importance to the bank. However, 26.7 percent and
22.2 percent consider this issue as important and very important respectively.
Analysis of the data in table 4.1 above also reveals that 31.1 percent which is the majority
of the respondents pointed out that assurance of superior service quality is a factor the
bank attaches little importance to. 15.6 percent however revealed that this is an issue of
importance by selecting important under this factor on the table on item 3 of the staff
questionnaire.
Another factor considered was empathy towards the recipient(s) of service. 33.3 percent
of the respondents were of the view that this factor is of little importance while 20
percent indicated that it is very important. A smaller proportion of the respondents also
pointed out that this factor is unimportant while the remaining 13.3 percent revealed that
it is moderately important.
In addition, the study looked at the atmosphere of the bank, which is the environment of
the bank including the attitude of the staffs. A greater percentage of the respondents
(42.2%) involved in the study see this factor as important whiles 13.3 percent see it as
very important. On the other hand, 17.8 percent consider it as of little importance while

50

4.4% also see it as unimportant. The remaining 22.2 percent also see it as moderately
important.
The study also looked at the personal relationship with the bank employees as a factor to
consider in terms of internal controls of the bank. The data from the table above reveals
that most of the staffs consider this factor to be of little importance (44.4 percent).
However, 11.1 percent consider it to be important, 8.9 percent, very important and the
remaining 22.2, percent of moderate importance.
Another important factor considered was the availability and convenience of services. A
minority of the respondents that is 13.3 percent pointed out that this factor is unimportant
while a majority of them that is 28.9 percent consider this factor as an important factor in
internal controls of the bank.
Moreover, reliability and honesty was also touched on. 35.6 percent of the staffs see this
factor as a moderately important factor to consider in the internal controls of the bank.
24.4 percent see it as important while 15.6 percent see it as very important. On the other
hand, 15.6 percent and 8.9 percent see this factor as of little importance and unimportant
respectively.
The availability of enough and accessible tellers was also considered. On this issue, a
majority of the respondents that is 37.8 percent indicated that it is a very important factor
while a smaller percentage (4.4 percent) held the notion that the availability of enough
and accessible tellers is not an important factor to consider in the internal controls of the
bank. It therefore appears that the availability of enough and accessible tellers is an
important factor in the internal controls of the bank.

51

4.5.1

Customers knowledge in terms of laid down

systems on how staff deals with them.

We sought to find out the level of customers knowledge in relation to laid down systems
on how the staff of the United Bank of Africa deals with its customers. Respondents were
therefore asked to indicate whether they do have enough knowledge about the laid down
systems by selecting yes or no to item 7 on the customers questionnaire. Findings
from the data collected from the field survey are presented in the table below.

50(44.6%)
YES
62(55.4%)

Figure 4-7 Customers' Knowledge Bank's Internal Control Systems

52

NO

Source, field survey 2013

From figure 4.6 above, it can be observed that out of the total of 112 respondents
(customers) sampled, 50 (44.6%) indicated that they do not have enough knowledge of
the laid down systems governing the treatment given to the customers of the bank by the
staff. The remaining 55.4% however pointed out that they do have enough knowledge of
laid down systems at the UBA concerning the treatment of customers by the staff by
answering yes to item 7 of the customers questionnaire. This therefore highlights the
notion that a majority of the customers of UBA do have knowledge of the laid down
systems governing how the staff deals with its customers.

4.5.2

How

Satisfied

Customers

are

with

the

Implementation of Rules in UBA

This aspect of the research aimed at to looking at the level of customers satisfaction in
relation to the implementation of rules at the UBA. The respondents (customers) were to
indicate whether they are very satisfied, satisfied, see as good, dissatisfied or very
dissatisfied with the implementation of rules in the bank. The respondents gave various
responses to item 8 of the customers questionnaire, which covered this aspect. Figure 4.7
below presents the findings after the data analysis.

53

50

45(40.2%)

45
40
35
30

27(24.1%)

25
20

18(16.1%)

15

12(10.7%)

10(8.9%)

10
5
0
Very satisfied

Satisfied

Good

Dissatisfied

Very Dissatisfied

Customers' views about the Implementation of Rules at UBA

Figure 4-8 Customers' Views of Internal Control System

Source, field survey 2013

From figure 4-7 above, it can be seen that out of the total number of 112 respondents 45
representing 40.2 percent indicated that they are satisfied, 24.1 percent dissatisfied, 10.7
percent very dissatisfied and 16.1 percent very satisfied with the implementation of rules
at the bank. In addition, 8.9 percent of the respondents also indicated that the
implementation of rules at UBA is good. The data above therefore unearths the notion
that a majority of the customers involved in the study are satisfied with the
implementation of rules at UBA.

54

4.5.3

How often Customers Challenge the Rules of the

Bank
The respondents were also asked to identify how often they had had to challenge some of
the rules of the bank in the course of their transactions with the bank. The results obtained
after the collection and analysis of the questionnaires are portrayed in the table below.

Table 4:3 Customers challenge of systems

Frequency

Percentage (%)

Very Frequently

11

9.8

Frequently

21

18.8

Occasionally

52

46.4

Rarely

15

13.4

Never

13

11.6

Source, field survey 2013

Table 4-3 above shows that 46.4 percent of the respondents (customers) revealed that
they occasionally challenge the rules of the bank. Eleven (11) of them (9.8%) also
pointed out that they do challenge the rules of the bank very frequently. However, 11.6
percent indicated that they never challenge the rules of the bank. This therefore shows
that the customers of UBA do not show good adherence to the rules of their bank as a
majority of the respondents (46.4 percent) revealed that they occasionally challenge the
rules of the bank.

55

4.5.4

The influence of the existence of Rules at UBA

on the amount of Transactions Customers make at the

Bank
Item 10 of the customers questionnaire was used to elicit responses from the respondents
in relation to the influence that the various rules has on the amount of transactions they
make at the bank. Figure 4.8 below shows the results of the findings.

Figure 4-9 Impact of Internal Systems on customers' transactions

Source, field survey 2013

A majority of the respondents (73), representing 65.1 percent were of the view that the
rules of the bank have an influence on the amount of transactions they make with the
bank. The remaining 39, which is 34.9 percent also revealed that the various rules of the
bank do not influence their transactions with the bank. The above results therefore

56

highlight the assumption that the nature of the rules of UBA has an effect on the amount
of transactions their customers make with them.
We went on to find out some of the reasons why the rules of the bank influence the
transactions they make with the bank. Most of the respondents asserted that strict
adherence to the rules and regulations of the bank make business transactions with the
bank difficult and time consuming.

4.6

The level of understanding of customer service staff in terms of

internal audit control system

4.6.1

Training of customer service staffs on internal

control systems
The purpose of this part of the study was to find out the level of training of customer
service staffs of UBA on internal control systems. The respondents (staff) were asked to
indicate how frequent they receive training on internal controls systems. The findings of
the study are presented in the figure below.

57

Figure 4-10 Staff Training on Internal Control Systems

Source, field survey 2013

The figure above reveals that 6.7 percent of the respondents pointed out that they do not
receive training on internal controls at all by selecting never from the questionnaire. A
majority of them (46.7 percent) however were of the view that they do receive trainings
occasionally. Also, 22.2 percent indicated that they rarely receive training with 15.6
percent indicating that they frequently receive training while the remaining 8.9 percent
stated that they receive trainings on internal controls very frequently. It can therefore be
realized from the above information that, the amount of training given to staffs on
internal controls is not encouraging. In our view, this will have a negative influence on
the service delivered to the customers of the bank as the training equips them with new
and relevant information which improves upon their work.
The research also sought to find out whether the training gives all staff the knowledge
and capability to answer all customer questions and resolve customer concerns
satisfactorily. The study revealed that a majority of the respondents (32%) agreed to this
58

notion by indicating that this statement is usually true as against a minority that is 6.7
percent who maintained that this notion is usually not true.

4.6.2

Staff adherence to laid down control systems

and maintenance of customer satisfaction

In an attempt to find out whether staff work in line with the laid down internal control
systems of the bank while ensuring the concerns of customers are adequately addressed,
the respondents (staffs) were asked to indicate whether they adhere to this statement by
indicating whether they strongly agree, agree, are undecided, disagree or strongly
disagree. The figure below illustrates the findings after the analysis of the data.

Figure 4-11 Adherence to Internal Control System & Customer Satisfaction

Source, field survey

59

From figure 4-10, out of the total of 45 respondents involved in the study, 2 (4.4%)
strongly disagreed, 5 (11.1%) disagreed while 23 (51.1%) strongly agreed and 14
(31.1%) agreed that the Staff take concerns of customers seriously but still dont side step
the laid down internal control systems.

4.7

Customers Perception and Experience of Customer Service Standards

To identify the customers perception and experience of customer service standards at

United Bank for Africa, Kumasi branches, the study sought the responses of the staff of
the bank. The staff were asked to indicate whether the set of questions posed to them on
customer perception and experience are; very important, important, moderately
important, of little importance or unimportant. Responses elicited from them are
discussed below.

Figure 4-12 Customers' Perception of Customer Service

60

Source, field survey

It was identified from Figure 4-11 that, customers perception in terms of the customer
service of the bank is extremely important to the bank. As presented in Figure 4.1, when
the sampled staffs of the bank were asked the question How important is customers
perception in terms of customer service to the bank, 35 representing 73 percent of them
said it very important while 10 representing 27 percent said it is important.
According to Wahyuningsih and Liestyana (2010) feedback from customers provides a
signal to the organization about the things that still need improvement. To this end, staffs
of the bank were asked to indicate how frequent they receive feedbacks from customers
bothering on customer service.

Figure 4-13 Frequency of Customers' Feedback on Customer Service

61

Source; Field survey, 2013

Figure 4-12 shows that 9 being 20 percents of the sampled staffs of bank asserted that
they occasionally receive feedback from customers bothering on customer service while
29 being 64 percent of them asserted that they receive feedback from customers
bothering on customer service frequently and 7 being 16 percent of them asserting that
they receive feedback from customers bothering on customer service very frequently.
This shows that the bank do receive feedback from customers on frequent basis
indicating that, some customer may be not satisfied with the customer service of the
bank.

4.8

Customer Satisfaction

The quality begins with customer needs and ends on the perception of customers. This
means that the image quality is good not based on viewpoint or perception service
providers, but based on the customer's point of view or perception of customers.

It is

the customer who enjoys the company's service, so it is they who should determine the
quality of the service. Customer perception of service quality is the comprehensive
assessment of the merits of a service (Wahyuningsih and Liestyana, 2010). Premised on
the above, sampled customers of the UBA were ask to rank their views using a scale
which specify whether they are satisfied or not with the services provided by the bank
and the general environment under which it operates. Customers were to indicate whether
they are: very satisfied (1), satisfied (2), good (3), dissatisfied (4) or very dissatisfied (5).
Results from the interview on the level of customer satisfaction have been presented in
Table 4-4 below.

62

Table 4:4 Level of Customer Satisfaction

Factors

Bank fulfils its promises at the time indicated

10

33

56

13

Banks staff have the knowledge to answer all my 44

questions

37

31

Distance to the office (premises) of the bank

36

30

46

Banks performs the services exactly at the first time

20

18

65

Bank has my interest at heart

13

24

21

54

Banks gives me individual attention

16

23

15

58

Bank has modern equipment & tools

28

39

45

Banks staff give you prompt service

16

27

51

Bank operating hours convenient to me

15

32

48

17

Bank show a keen interest in solving your problems

37

49

26

Banks physical facilities virtually nice

15

35

62

I feel safe in my transactions with the bank

31

36

40

Banks staff are courteous with me

34

58

17

56

51

Banks staff tell you exactly the time the service will be
performed
Banks staff always willing to assist you

42

31

34

Bank insists on error free records

89

15

Overall satisfaction with your bank

12

28

39

11

33

Source; Field services, 2013

In summary, the study found that, 12 of the sampled customers representing 10.7 were
very satisfied with the customer service of the bank while 28 representing 25 percent
63

were satisfied. Also, 39 representing 34.8 were of the view that, the customer service of
the bank is good. However, 33 of the sampled customers representing 29.5 were
dissatisfied with the customer service of the bank. A further look at the responses elicited
from the customers on the level of satisfaction of the customer service of the bank shows
that customers were satisfied with various services of the bank such as; banks fulfilling
its promises at the time exact indicated (that is, 10 (8.9 %) very satisfied, 13 (11.6%)
satisfied and 56 (50%) good, the staffs of the bank having the knowledge to answer
questions of customers (44 (39.2%) very satisfied, 37 (33%) satisfied and 31 (27.7%)
good), distance to the office (premises) of the bank (36 (32.1%) very satisfied, 30
(26.8%) satisfied and 46 (41%) good), staffs showing keen interest in solving problems
of customers (37(33%) very satisfied, 49(43.8%) satisfied and 26(21.3%) good) and the
banks physical facilities (15 (13.4%) very satisfied, 35(31.3%) satisfied and 62 (55.4%)
good) amongst others. On the other hand, customers of the bank were dissatisfied with
some aspect of the service of the bank such as; banks performing services exactly at the
first time (65 (58%) dissatisfied), bank having interest of individual customers at heart
(54 (48.2%) disagree), banks giving customers individual attention (58 (51.8%)
dissatisfied) and Banks staffs giving prompt service (51 (45.5%) dissatisfied and
11(9.8%) strongly dissatisfied). This explains why majority of the respondents are
satisfied but some also unsatisfied with the overall customer service of the bank.
In a similar manner, Moutinho and Brownlie, (1989) explored the nature and direction of
the satisfactions that are delivered to consumers of bank services. The authors found out
that respondents had high levels satisfaction with regard to the location and availability of
branches and ATMs, and acceptance of the current levels of banking fees: but expressed

64

some cautions in their evaluation of new and improved service. Hughes (1992), also
found that banks have observed inconsistent customer satisfaction across touch points
because of different service deliverables, disorganized data systems, as well as
experienced employees not being able to provide satisfactory information on the large
assortment of products and services.

65

CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION

5.1

5.1

5.1.1

SUMMARY

Impact

of

internal

audit

control

on

customer

experience in United Bank for Africa, Kumasi Branches

Under the impact of internal audit control on customer experience in UBA, we firstly
looked at the importance of the implementation of internal control systems in the bank.
The study revealed that majority of the respondents indicated that the implementation of
internal control systems is important. Also 40 percent of the respondents representing the
greater proportion pointed out that they had frequent complaints from the customers
while 4.4 percent indicated that they received no complaints from customers. This
implies that a lot of complaints do emanate from the implementation of internal control
measures by the bank even though it is of great importance to the bank and this will affect
its service delivery.

66

We also touched on the importance of certain factors taken into consideration in terms of
internal controls of the bank. A majority of the staffs indicated that tangibility of service
rendered, available and convenient services, reliability and honesty, reliability of service
and the banks atmosphere are important factors to consider in internal controls of the
Bank. Also, a greater percentage of the respondents indicated that responsiveness of staff
to customers issues and concerns, relationship and empathy towards recipients of service
are of little importance. In addition, availability and accessibility of tellers was seen as
very important by a greater percentage of the respondents.
We also sought to find out the level of customers knowledge in terms of laid down
systems and how staffs deal with their customers. The analysis of the data revealed that a
majority of the respondents (55.4%) have enough knowledge in this respect. Most of the
respondents also pointed out that they are satisfied with the implementation of rules at
UBA.

However, 46.4% of the respondents (customers) also asserted that they

occasionally challenge the rules of the bank while a greater percentage also indicated that
the rules at UBA influence the amount of transactions they make with the bank (65.1%).

5.1.2

The level of Understanding of Customer Service

Staff in Terms of Internal Audit Control System

The results at this aspect of the study pertaining to the training of customer service staff
on internal control systems revealed that 46.7 percent, representing the majority of the
respondents indicated that they were occasionally taken through trainings. In addition the
findings from study portrays the notion that the trainings give all staff the knowledge and
capability to answer all customer questions and resolve customer concerns satisfactorily.

67

The findings therefore reveals that the level of training given to the service staff of UBA
on internal controls of the bank is not enough and this will go a long way to influence the
bank negatively. The study however revealed that the staffs of UBA are able to take
concerns of customers seriously but still dont side step the laid down internal control
systems as 51.5 percent of the respondents asserted to this by indicating that they strongly
agree.

5.1.3

Customers

Perception

and

Experience

of

Customer Service Standards

It was identified that, customers perception in terms of the customer service of the bank
is extremely important to the bank. When the sampled staffs of the bank were asked the
question How important is customers perception in terms of customer service to the
bank, 35 representing 73 percent of them said it very important while 10 representing 27
percent said it is important. The study also found that, 20 percents of the sampled staffs
of bank occasionally receive feedback from customers bothering on customer service
while 64 percent of them receive feedback from customers bothering on customer service
frequently and 16 percent receiving feedback from customers bothering on customer
service very frequently.

5.1.4

Customer Satisfaction

The study found that, 12 of the sampled customers representing 10.7 were very satisfied
with the customer service of the bank while 28 representing 25 percent were satisfied.
Also, 39 representing 34.8 were of the view that, the customer service of the bank is

68

good. However, 33 of the sampled customers representing 29.5 were dissatisfied with the
customer service of the bank.

5.2

Recommendations

Based on the findings of the research, it is recommended that;

The bank should focus on improving their customers needs and satisfaction by promptly
and accurately responding to customer needs
The bank should consider the introduction of 24 hours banking to resolve customers
complaints and attend to their needs promptly
The bank needs to increase on the number of ATMs as well placing them in a convenient
area for customers and ensuring the service reliability of the ATMs as part of the measure
to promptly serve their customers.
Banks should initiate new service delivery techniques to strengthen their relationships
with customers and to suit the underlying dimensions customer satisfaction.
There should be enough training given to the staffs of the bank on internal control
systems in the bank in order to improve upon their customer service.
There is the need for the bank to pay more attention to the complaints made by customers
resulting from the implementation of Internal Control Measures to aid them improve
upon their services.

69

5.3

Conclusions

Internal audit control has some effect on customer complaints and the amount of
transactions customers of United Bank of Africa make with the bank.
Customer service staffs of UBA receive occasional training on Internal audit control
system and this enhanced their adherence to the rules of internal control and their
understanding of internal audit control systems of the bank.
It can also be concluded that customers perception in terms of the customer service of
the bank is extremely important to the bank. This notwithstanding, the bank do receive
feedback from customers on frequent basis indicating that, some customer are not all that
satisfied with the customer service of the bank.
Lastly, the bank need to go extra mile in terms of ensuring the satisfaction of its
customers since some of them are not satisfied with the level of their service.

70

REFERENCES
Al-Hawary S.I.S, Alhamali R.M., Alghanim S.A., (2011), Banking Service Quality
Provided by Commercial Banks and Customer Satisfaction, American Journal of
Scientific Research, Issue 27(2011), pp. 68-83
Amankwah, S. & Ohene-Adu, W. (2011) Assessment and Analysis of Service Quality
And Customer Satisfaction (A Case Study Of National Investment Bank,
Kumasi)
Arnold, M. J., Reynolds, K. E., Ponder, N., & Lueg, J. E. (2005). Customer delight in a
retail context: investigating delightful and terrible shopping experiences. Journal
of Business Research, 58(8), 1132-1145.
Betty, J., 1975. Management Accounting, London: McDonald and Evans, Ltd.

Bryman, A. and Bell, E. (2007), Business Research Methods, 2

University Press.

71

nd

edition, Oxford

Cohen, D., Gan, C., Hwa Au Yong, H., Choong, E. (2006), Customer Satisfaction: A
Study of Bank Customer Retention in New Zealand, Discussion Paper No. 109
Creswell, J.W., (2003), Research Design: Qualitative, Quantitative and Mixed Methods
Approach, Second Edition, Sage Publication, Inc.
Denscombe, M 2000: The Research Guide for Small Scale- Social Research Projects.
Open University Press. Buckingham. Philadelphia.
Eisner, E. W. (2001), Concerns and aspirations for qualitative research in the new
millennium, Qualitative Research, SAGE publications, London.
Gentile, C., Spiller, N., & Noci, G. (2007). How to sustain the customer experience: An
overview of experience components that co-create value with the customer.
European Management Journal, 25(5), 395-410. doi: 10.1016/j.emj.2007.08.005.
Goetzee, P.G. 2004. The Effect of HIV/AIDS on the control environment: an internal
audit perspective. University of Pretoria.
Hair, J.F., Babin, B., Money, A.H., Samouel, P., (2003), Essentials of Business Research
Methods, John Wiley & Sons, Inc.
Holme, I.M. & Solvang, B.K. (1997). Forskningsmetodik Om kvalitativa och
kvantitativa metoder. Lund: Studentlitteratur.
Hughes, T.J. (1992), The Customer Database: Cross-selling Retail Financial Services,
Int. Journal of Bank Marketing, Vol 10, Issue 7, pp. 11-16
rd

Jankowicz A .D. 2000. Business research projects. London. 3 edition

72

Katz, Y., 2002. Internal Audit Charter and Audit Policies Retrieved August 10, 2007,
from http://www.edu/adminaff.
Kumar, R., (1996), Research Methodology: A step by step guide for beginners, Sage
Publications Inc.
Leedy, P & Ormrod, J 2005, Practicalresearch:planninganddesign, 8th edn, Pearson
Merrill Prentice Hall, New Jersey.
Maxwell, JA 1996, Qualitative research design:an interactive approach, Sage
Publications, California.
McDonald, M. (2002) Key Account Management A Domain Review, Marketing
Review, Cranfield School of Management Research Report Vol.1, No.7, pp.1534.
Meyer, C., & Schwager, A. (2007). Understanding customer experience. Harvard
Business Review, 1-12.
Miles, B.M, & Huberman, M.A., (1994), Qualitative Data Analysis, Second Edition, Sage
Publications, Inc.
Moutinho, L and Brownlie, D.T. (1989) Customer Satisfaction with Bank Services: A
multidimensional Space Analysis, The International Journal of Bank Marketing,
Vol. 7.
Obazee, J.O., 1997. Emerging Role of Internal Auditing in Banking Organization, The
New Accountant, 1, (10): Pp.10-12.

73

Okafor C. & Ibadin P. O. (2009), The Imperatives Of Internal Audit In Nigerian Banks:
Issues And Prospects, Global Journal Of Social Sciences Vol 8, No. 2, 2009: 2127
Patton, MQ 1990, Qualitativeevaluationandresearchmethods, 2 edn, Sage Publication,
Lnc., California.
Perry, W. E., Warner, H. C. A quantitative assessment of internal controls. Internal
Auditor, 2005, april, pp. 51-55
Pine, J., & Gilmore, J. H. (1999). The experience economy: work is theatre & every
business a stage. Boston: Harvard Business Press.
Remenyi, D, Williams, B, Money, A. and Swartz, E (1998), DoingResearchinBusiness
andManagement, Sage Publications, London
Rudasingwa J. (2006), The Role Of The Internal Audit Function In Enhancing Risk
Management In The Rwandan Social Security Fund (Rssf), Tshwane University
Of Technology, August 2006

Saunders, M, Levis, P & Thornhill, A 2009, Researchmethodsforbusinessstudents, 5

th

edn, Prentic Hall, Harlow.

Saunders, M., Lewis, P. & Thornhill, A. (2003). Research Methods for Business Students.
rd

3 Edition. Harlow: Pearson Education Ltd.

74

Saunders, M., Lewis, P., Thornhill, A., (2000) ResearchMethodsforBusinessStudents

SecondEdition,UK, Financial Times, Prentice Hall
Scapens, R. W. (1990), Researching Management Accounting Practice: The role of Case
Study Methods, The British Accounting Review, Vol. 22, pp. 259-281, United
Kingdom.
Siayor A.D (2010), Risk Management and Internal Control Systems in the Financial
Sector, of the Norwegian Economy: A case study of DnB NOR ASA, Troms
University Business School, November 2010
Siddiqi K.O.,(2011), Interrelations between Service Quality Attributes, Customer
Satisfaction and Customer Loyalty in the Retail Banking Sector in Bangladesh,
International Journal of Business and Management Vol. 6, No. 3; March 2011
Stake, R. (1978), The Case Study Method in Social Enquiry, Educational Researcher
7(2). Woolf, E. (1994), Auditing Today, 6 sub division, Prentice edition, New
York.
Taylor, S J & Bogdan, R 1997, Introduction to qualitative research methods: a guidebook
and resource, 3rd edn, Wiley, New York
Uppal R.K (2010), Customer complaints in banks: Nature, extent and strategies to
mitigation, Journal of Economics and International Finance Vol. 2(10), pp. 212220, October 2010.
Wandaogou, A.M.M. & Jalulah S.P. (2011) Evaluation of Customer Satisfaction with
Internet Banking Service Quality in the banking Industry in Ghana: A case study

75

of Ghana Commercial Bank Ltd and Merchant Bank of Ghana Ltd (Masters
Thesis)
Welman. J. C and Kruger. S. J. 2001. Research methodology. Clarendon: Oxford
University Press.
Zikmund, W.G., (2000), Business research methods, sixth edition, Harcourt, Inc. 6277
Sea Harbor Drive, Orlando, FL 32887-6777.
Zineldin, M. (2006), The royalty of loyalty: quality and retention. Journal of Consumer
Marketing. Vol. 23, No. 7, pp. 430-437
Parasuraman, A., Zeithaml, V.A. and Berry, L.L. (1994), Reassessment of Expectations as
A Comparison Standard in Measuring Service Quality: Implications for Future
Research, Journal of Marketing, 58 (1), 111-124.

76

APPENDIX 1
This survey is meant to collect relevant information from selected staff of United Bank
for Africa to do an assessment of internal audit control being an impediment or a boost to
customer service in the banking industry in Ghana. The information required for this
exercise is strictly for academic purpose and any information provided would be treated
with utmost confidentiality and shall be used only for the intended purpose. Your candid
opinion is highly solicited.
Please I would appreciate it if you could spend some few minutes answering
questionnaire.
Demographic Information
1.

Gender:

2.

How old are you?

3.

Male []

Female []

Below 25

[]

25 30

[]

31 35

[]

36 40

[]

41 45

[]

Above 40

[]

1 - 2 years

[]

2 3 years

[]

4 5 years

[]

5 years and above []

Number of years on the job?

Below 1 year
3 4 years

[]
[]

77

this

4.

5.

Educational Qualification
Professional Certificate

[]

2nd Degree

[]

1st Degree

[]

Department:

Main Questions
The impact of internal audit control on customer experience

1.

How important is the implementation of internal control systems in this bank?

Very Important

[]

Of Little Importance []
2.

Important

[]

Moderately Important []

Unimportant []

Are there frequent incidents of customer complaints emanating from the

implementation of internal control measures?

3.

Very Frequently

[]

Frequently

[]

Rarely

[]

Never

[]

Occasionally []

How important are the following factors taken into consideration in terms of
internal controls of the bank?
Very Important

[1]

Of Little Importance [4]

Important

[2]

Moderately Important [3]

Unimportant [5]

Factors

Responses

Tangibility of service rendered

78

Reliability of service rendered

The responsiveness of staff to customers issues and concerns
Assurance of superior service quality
Empathy towards the recipient(s) of service
Bank atmosphere - environment of the bank including the attitude of the
staffs
Bank atmosphere - environment of the bank including the attitude of the
staffs
Relationship: The personal relationship with the bank employees.
Rates and charges - an individuals perception of service quality is affected
by the low cost and high interest rates.
Available and convenient services: The full range of available services,
convenient and easily
Accessible: enough and accessibility to both staff and services
Reliability/honesty: The solid bank ratings and reliable, honest staff.
Tellers - enough and accessible tellers

The level of understanding of customer service staff in terms of internal audit

control system

79

4.

Do staffs in charge of customer service receive adequate training on internal

controls systems?

5.

Very Frequently

[]

Frequently

[]

Rarely

[]

Never

[]

Occasionally []

The training gives all staff the knowledge and capability to answer all customer
questions and resolve customer concerns satisfactorily?

6.

Almost Always True []

Usually True

[]

Occasionally True

[]

Usually Not True

[]

Almost Never True

[]

Staff take concerns of customers seriously but still dont side step the laid down
internal control systems.

7.

8.

Strongly Agree

[]

Agree

[]

Disagree

[]

Strongly Disagree

[]

Undecided

[]

Are there frequent audit concerns raised in terms of customer service operations?
Very Frequently

[]

Frequently

[]

Rarely

[]

Never

[]

Occasionally []

How satisfied are customers when it comes to understanding measures of the bank
towards customers safety?
Very satisfied

[]

Satisfied

80

[]

Good

[]

Dissatisfied
9.

[]

Very Dissatisfied

[]

In your view, please comment on the level of understanding of customer service

staff in terms of internal audit control system

Customers perception and experience of customer service standards

10.

How important is customers perception in terms of customer service to the bank?

Very Important

[]

Of Little Importance []
11.

Important

[]

Moderately Important []

Unimportant []

How frequent do you receive feedbacks from customers bothering on customer

service?

12.

Very Frequently

[]

Frequently

[]

Rarely

[]

Never

[]

Occasionally []

As a staff, please comment on perception of how customer perceive the customer

service standard of your bank

81

13.

Please indicate any suggestions that can impact on the perception of customers in
terms of customer service

14.

Please comment on how you think customers of the bank are satisfied when it
comes to customer service

82

15.

Any other comment on the subject under discussion

APPENDIX 2
This survey is meant to collect relevant information from selected customers of United
Bank for Africa to do an assessment of internal audit control being an impediment or a
boost to customer service in the banking industry in Ghana. The information required for
this exercise is strictly for academic purpose and any information provided would be
83

treated with utmost confidentiality and shall be used only for the intended purpose. Your
candid opinion is highly solicited.
Please I would appreciate it if you could spend some few minutes answering
questionnaire.
Demographic Information
1.

Gender:

2.

How old are you?

3.

[]

25 30

[]

31 35

[]

36 40

[]

41 45

[]

Above 40

[]

[]

Length of relationship with the bank?

3 4 years

5.

[]
[]

1 - 2 years

[]

2 3 years

4 5 years

[]

5 years and above []

Educational Qualification
Primary

[]

Illiterate

[]

Secondary/College

[]

Tertiary

[]

Fully Employed

[]

Partially Employed

[]

Retried

[]

once in2weeks

[]

Employment Student
Student

[]

Unemployed []
6.

Female []

Below 25

Below 1 year

4.

Male []

Frequency of using the bank

Daily []

Once to thrice a week

84

[]

this

Oncein3weeks

[] once in a month

[]

Main Questions
The impact of internal audit control on customer experience

7.

Do you know that the bank has a laid down system on how staff deals with you?
Yes

8.

9.

[]

No

[]

How satisfied are you, as a customer, with the implementation of rules?

Very satisfied

[]

Satisfied

[]

Dissatisfied

[]

Very Dissatisfied

[]

Good

[]

How often have you had to challenge some of these rules in your transaction with
the bank?

10.

Very Frequently

[]

Frequently

[]

Rarely

[]

Never

[]

Occasionally []

Does the existence of such rules influence the amount of transactions you have
with the bank?
Yes

11.

[]

No

[]

If yes, please explain how it influences you

85

Customer Satisfaction

Please rank your views using the following scale whether you are satisfied or not with the
services provided by the bank you deal with often and the general environment under
which it operates
Very satisfied

[1]

Satisfied

[2]

Dissatisfied

[4]

Very Dissatisfied

[5]

Factors

Good

Scale

Banks fulfills its promises at the time indicated

Banks staff have the knowledge to answer all my
questions
Distance to the office (premises) of the bank
Materials associated with the servicelike pamphlets,
statements are virtuallyappealing at the bank
Banks performs the services exactly at the first time
Bank has my interest at heart

86

[3]

Banks gives me individual attention

Bank has modern equipment & tools
Banks staff give you prompt service
Bank operating hours convenient to me
Bank show a keen interest in solving your problems
Banks staff behaviour instills confidence in me
Banks physical facilities virtually nice
I feel safe in my transactions with the bank
Banks staff are courteous with me
Banks staff tell you exactly the time the service will be
performed
Banks staff always willing to assist you
Bank insists on error free records
Banks staff understand my specific needs
Bank staff are not too busy to respond to my requisition
Overall satisfaction with your bank

12.

Please use the space below for any comment or additional information on your
perception and experience of customer service rendered to you by the bank
....................................................................................................................................
....................................................................................................................................
87

....................................................................................................................................
....................................................................................................................................
....................................................................................................................................
....................................................................................................................................

88