EVALUATING THE EFFECT OF INTERNAL CONTROL SYSTEM ON THE FINANCIAL PERFORMANCE OF QUALIFIED MANUFACTURING COMPANIES IN NIGERIA

Abstract Evaluating the effect of internal control systems on the financial performance of qualified manufacturing companies in Nigeria reveals that a robust internal control system significantly enhances financial performance. Studies have consistently shown a positive relationship between internal control mechanisms and financial performance in Nigerian manufacturing firms. The study found out that Control activities have a significant positive impact on financial performance, highlighting the importance of instituting preventive and detective controls. Internal control systems significantly reduce fraud perpetration, thereby improving financial performance. The implementation of effective internal control systems is crucial for manufacturing companies in Nigeria to enhance their financial performance. By strengthening corporate governance procedures and internal control systems, organizations can promote accountability, transparency, and financial performance. The study therefore recommended that manufacturing firms should improve their risk assessment processes using appropriate tools to identify fraud-related risks. Boards of directors should ensure that internal control systems recommended by internal and external auditors are implemented. Management should develop mechanisms to incorporate feedback from stakeholders into their internal control systems.