THE IMPACT OF INTERNAL CONTROL SYSTEM ON FINANCIAL PERFORMANCE OF SMALL AND MEDIUM SCALE ENTERPRISES IN NIGERIA (A STUDY OF SELECTED SMALL SCALE BUSINESS IN IBADAN NORTH LOCAL GOVERNMENT)

The study is to examine the impact of internal control system on financial performance of Smes in Nigeria. One of the specific objectives are to examine the effect of risk assessment on Return on Assets of small and medium scale enterprises in Oyo State. The research design is the approach used to conduct the study. This study was carried out in Ibadan Metropolis of Oyo State. Primary data was collected from sixty six samples randomly picked Sango daily market and Mokola market and included both formal and informal sectors. Data for this study was obtained quantitatively using random sampling techniques. Random sampling technique will be used to ensure that each sample has an equal chances or probability of being chosen. The Correlation analysis was employed so as to ascertain the accuracy of the data. The regression analysis was used to analyze statistics obtained to explain the degree of relationship between the dependent and independent variables. It was found that Smes determines the performance of management. It was also concluded that risk assessment has a positive relationship on financial performance of small and medium scale enterprises in Oyo State, and the relationship was statistically significant. The study recommended that organization should create and maintain a strong internal control environment since the organization’s financial success is influenced by the strength of the control environment.