Impact of Internal Controls on the Liquidity Performance of Listed Companies in Nigeria.

Abstract:

The study sought to determine the impact of internal control systems on liquidity performance of listed companies on the Nigeria Securities Exchange (NSE). To achieve the objective of this study, the research specifically looked at the following objectives, several number of internal controls such as, risk management, Compliance, Internal communication and board independence and on the other hand the selected entities examine on long- and short-term solvency to properly assessed the impact of internal control on liquidity performance of companies listed on NGX. The study adopted the ex-post factor research design. The population chosen for this study was the top 10 listed companies on the NGX based on their capitalization on the exchange floor. The study used a sample of 5 years annual report of each entity as this make the total population to be 19. The sample was drawn using stratified random sampling technique. The study relied on secondary data majorly the annual report of each company alongside their audited financial statements. The Secondary data was extracted from audited annual reports, publications, and document analysis. Data analysis used both descriptive statistics, diagnostic statistics and inferential statistics. Frequency tables were prepared, averages determined and tests of hypothesis like ANOVA, chi-square, correlation and regression analysis were done. The data was analyzed using statistical package for social scientists (SPSS) computer software version 21.0. The results and findings concluded that there was no significant association between internal control and liquidity performance and recommends that internal control should be improved to further enhance the liquidity performance of companies quoted in Nigeria Securities Exchange.