INTERNAL CONTROL SYSTEMS IN ENHANCING RISK MANAGEMENT PRACTICES IN LISTED DEPOSIT MONEY BANKS IN NIGERIA.

ABSTRACT This study examines the effectiveness of internal control systems in enhancing risk management practices within Nigerian listed Deposit Money Banks. Given the critical role of internal controls in safeguarding assets, ensuring accurate financial reporting, and enhancing operational efficiency, this research investigates how key components of internal control—control activities, risk assessment, control environment, and monitoring—contribute to managing risks in Nigerian banks. Using a cross-sectional descriptive survey design, data were collected through questionnaires distributed to a purposively selected sample of bank employees. The study employs descriptive statistics, correlation analysis, and multiple linear regression to analyse the data. Findings reveal that all four internal control components significantly influence risk management practices, with control activities and risk assessment having the most substantial impact. The study highlights the importance of a strong control environment and continuous monitoring in enhancing risk management effectiveness. Based on these findings, the study recommends that banks strengthen their internal control systems, particularly in performance reviews, risk assessment processes, organizational structure, and ongoing monitoring, to improve risk management practices and ensure greater resilience in a dynamic banking environment. This research provides practical guidance for bank managers and policymakers seeking to enhance risk management frameworks in the Nigerian banking sector. Keywords: Internal Control Systems, Risk Management Practices, Deposit Money Banks, Control Activities, Risk Assessment, Control Environment, Monitoring, Financial Risk, Regulatory Compliance.