A Research Report Submitted to Mzumbe University – Mbeya Campus College in Part of Partial Fulfilment for the Award of Bachelor Degree of Accountancy and Finance in Business Sector (BAF-BS) of Mzumbe UniversityThe study of the researcher will be based on assessing the effects of internal controls towards the financial performance of commercial banks in Mbeya Region. In the recent past there has been failure of some of the largest commercial banks in Tanzania this trend puts into question the ability of the internal control systems and the Central Bank of Tanzania prudential guidelines to steer the commercial banks stability and performance. The objective of this paper will be to primarily through literature, to review the effect of internal control systems on the performance of commercial banks. The researcher has investigated various literatures on the components of internal control in order to compare on how they may be operated and coordinated in order to achieve the goals put by the bank. The researcher deployed different tools in collecting data, these tools are interview, documentary analysis, internet search and self-administered questionnaire. The study used two sampling techniques which are simple random sampling and purposive sapling in obtaining the sample of the population. The study will include the sample of 129 respondents. The study findings established a positive and significant relationship between components of internal controls which are control environment, risk assessment information and communication, control activities and monitoring strategies and financial performance of the commercial banks. The BOT regulations indicated a significant moderating effect on the relationship between internal controls and financial performance of the commercial banks. The study therefore recommends that there is need for the banks to ensure suitable environment on the internal controls and its components in order to improve performance of the banks. There is need also for proper checks and balances in all financial transactions in the banks. The banks’ management should examine the level of employee integrity in allocating them responsibilities especially where employees are to deal with confidential information involving the banks’ vital documents. The banks should regularly check on their operations and the policies to deal with threats and examine whether these meets all the banks’ requirements to safeguard commercial banks from losses. The CBK should as well provide more training to the commercial banks’ management on the effective monitoring strategies and policies that they should apply to ensure increased profitability of the banks.