EFFECT OF INTERNAL CONTROL SYSTEM ON FINANCIAL PERFORMANCE OF PRIVATE SECTOR IN NIGERIA AN EMPIRICAL REVIEW

This study was centered to investigate the effect of internal control systems on the financial performance of listed deposit money banks in Nigeria stock exchange. This study examined whether the internal control systems leads to increase financial performance of the banks. In this study, internal control system is measured by control environment, internal audit functions, risk management control, internal control activities corporate governance and moderating effect of government policy and financial performance of the deposit money banks are measure by Profitability, Return on equity, Cost per unit and Earnings per share respectively. Primary data was collected from the key informants from all the twelve deposit money banks in Nigeria using questionnaires for the study. The key informant’s method was used; all the Finance Managers and heads of internal audit for every deposit money banks were selected to take part in the study. A total of 180 questionnaires were distributed, the data was analyzed using statistical package for social scientists (SPSS) computer software version 16.0 to generate cumulative frequencies, percentages, descriptive, correlation and regression. The study found a positive significant effect on internal control system on the financial performance (R = 0.259), and R square 0.667 thus internal control components accounts for 66.7% variance in performance. The findings are expected to be of value to all deposit money banks’ stakeholders and form a basis for improving financial performance of banks.