EFFECT OF INTERNAL CONTROL SYSTEM ON FINANCIAL PERFORMANCE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA.
Keywords:Internal Control, Control Environment, Risk Assessment, Financial Performance, Net Profit Margin.
This study examined the effect of internal control on financial performance of listed deposit money banks in Nigeria. The triangulated research design was employed for the study. The population of the study consist of two hundred and twenty (220) respondents drawn from the thirteen (13) listed deposit money bank. Multiple regression analysis was used to test the formulated hypothesis computed with the aid of Stata12 statistical software. The study revealed a negative and insignificant effect of control environment on net profit margin of listed deposit money banks in Nigeria and the existence of a positive but insignificant effect of risk assessment on net profit margin of listed deposit money banks in Nigeria. The study recommended that banks should create and maintain a strong internal control environment since the organization’s financial success is influenced by the strength of the control environment. Finally, banks should also practice adequate controls in custody and disposal of assets including cash and to reduce the risk of material misstatements in financial reporting in relation to recognition and measurement of assets, liabilities, revenue and cost or insufficient disclosure.