IMPACTS OF INTERNAL CONTROL ON CORPORATE FINANCIAL MANAGEMENT

Abstract

This study examined the impact of internal control on financial management of manufacturing organisations. For any organisation to survive, resources at its disposal must be effectively and efficiently utilised. To ensure the optimal utilisation of these resources, control measures are put in place by management. Internal control has been in existence for years but financial crimes have continually increased. Therefore this study examines the impact of internal control system on financial management of organisations.The stewardship theory guided the study. The methodology of the study is based on survey research approach. The sample for the study consists of 5 selected healthcare companies in Lagos state. These companies were selected using stratified sampling technique. Ninety six (96) responded copies of questionnaire out of 100 administered were obtained for the analysis. The data obtained from the questionnaire were analysed using regression analysis in SPSS (Statistical packages for social sciences). The result of the analysis shows that there is significant relationship between internal control and financial management(P=0.001;<0.05) while in conclusion it was recommended that internal control system should be evaluated periodically to identify and strengthen its weaknesses so as to reduce the likelihood of fraudulent activities. Management is advised to establish organisational controls to ensure attainment of goals and objectives.