IIARD International Institute of Academic Research and Development

IIARD International Journal of Economics and Business Management (IJEBM )

E-ISSN 2489-0065
P-ISSN 2695-186X
VOL. 6 NO. 3 2020

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Internal Control System and Financial Performance of Manufacturing Firms in Nigeria

Olayode Omorayewa Adelana

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Abstract

Lack of internal control system or the weakness of the controls is the direct cause of cases of fraudulence of firm financial reporting. A lot have been debated by various researches about the importance and influence of internal controls particularly as the control affects the financial performance of firms. The study investigates the major effect of internal controls on financial performance of organizations such as production firms through a review of related literature comprising of conceptual, theoretical and empirical studies. The study is conceptual. From the review of recognized scholars in this field of study, it was found that there is good relationship between financial performance of production firms and the system of internal control. The study concluded that the success of any organization depends to a large extent on the measures an organization put in a place to support performance operations and facilitate the attainment of the objectives of the organization. Some of the recommendations of the study are as follows: Management must establish and maintain sound internal control system. Management must also prepare to combat any circumstances that may post threat to the organization’s ability to achieve its target goals. The controls should be reviewed regularly for effectiveness.

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