Effect of internal control system on financial performance of ICT firms in Abuja

Abstract

This study investigated the impact of the internal control system on the financial performance of ICT firms in Abuja. Seven ICT firms were examined using a quantitative correlational research design. Data were collected through structured questionnaires and analyzed using regression analysis. While information and communication are essential for supporting decision-making and operational coordination, the study suggests that the effectiveness of communication systems may not directly translate into improved financial outcomes in ICT firms. Based on the conclusions of the study, the it was recommended that ICT firms should prioritize the development and implementation of robust risk assessment frameworks. Given the significant positive impact of risk assessment on financial performance, firms should regularly evaluate potential risks and develop mitigation strategies. The control environment was found to positively influence financial performance, emphasizing the importance of fostering a culture of integrity, accountability, and ethical behavior within ICT firms. Although control activities alone did not show a significant impact, they remain crucial for ensuring effective operations and minimizing risk. ICT firms should integrate control activities with other key internal control components, such as risk assessment and the control environment. While information and communication were not directly linked to financial performance in this study, enhancing communication within the organization can still be valuable for improving operational efficiency and decision-making. Given that monitoring alone did not have a significant impact on financial performance, it is recommended that ICT firms integrate monitoring processes with other internal control systems.