EFFECT OF INTERNAL CONTROL SYSTEMS ON PERFORMANCE OF REGISTERED SMES IN KOGI STATE

This study examined the effect of internal control systems on the performance of registered Small and Medium Enterprises (SMEs) in Kogi State, Nigeria. Specifically, the study assessed the influence of the control environment, risk assessment, and control activities on performance. A descriptive survey research design was adopted, and primary data were collected through a structured questionnaire administered to owners, managers, and relevant staff of registered SMEs in the state. Out of the targeted respondents, 312 valid responses were used for analysis. The data were analysed using descriptive statistics and Pearson correlation with the aid of SPSS. The findings revealed that the control environment had a positive and significant effect on performance, indicating that ethical leadership, clear communication of policies, and employee accountability contribute to improved business outcomes. Risk assessment also showed a positive and significant relationship with performance, suggesting that SMEs that identify and manage potential risks are more likely to achieve stability. Furthermore, control activities were found to significantly influence performance, showing that approval procedures, segregation of duties, asset protection, and internal reviews enhance operational efficiency and reduce irregularities. Based on these findings, the study recommends that SME owners and managers in Kogi State should strengthen their control environment through ethical leadership and staff training, integrate risk assessment into business planning, and consistently implement effective control activities. The study concludes that well-structured internal control systems are essential for improving performance, promoting accountability, and ensuring the long-term sustainability of SMEs in Kogi State, Nigeria.

0 23 Jun, 2026

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