The ability of a business to bring in money is essential to its survival. Because the sectors that make up Nigeria’s productive sector lack adequate financial resources, the country has created a poor internal control structure and lax laws in recent years. The financial results of SMEs in Kebbi State, Nigeria were analyzed to ascertain the advantages of implementing an efficient internal control system. A descriptive survey approach was used for the investigation. CEOs, managers, and internal control units in Kebbi State SMEs estimated that 2,200 people would be employed there in 2022. A total of 338 study participants were recruited using a rigorously random approach. The five hypotheses were tested using a questionnaire the researchers developed themselves and the Pearson Product Moment Correlation Coefficient Analysis with a twotailed test of significance at the P0.01 level. According to the findings, SMEs in Kebbi State, Nigeria may save money by adopting several components of internal control. The economic success of small and mediumsized
enterprises (SMEs) in Kebbi State, Nigeria, is influenced by several factors, including the presence or absence of key internal control components. The research recommends that SMEs conduct financial audits on a regular and timely basis to assist them to spot problems in their financial systems and performance. Small and mediumsized enterprise (SME) leaders should conduct an annual evaluation of the financial reporting process and implement an internal auditing system to monitor performance.
Keywords: Control activities, Financial performance, Internal control, Risk assessment, SMEs,
JEL Classification: G30, M41, Q56
Oyedokum, Godwin Emmanuel & Muhammad, Abubakar Illo (2023). Internal Control System and Financial Performance of Small and Medium Scale Enterprises in Nigeria. Studies in Economics & International Finance, Vol. 3, No. 1, pp. 89-110. https://DOI:
10.47509/SEIF.2023.v03i01.07