THE IMPACT OF INTERNAL CONTROL SYSTEM ON THE PROFIT

PERFORMANCE OF COMMERCIAL BANKS: A CASE STUDY OF FIRST BANK OF

NIGERIA PLC MAIDUGURI BRANCH

BY
MOHAMMED IBRAHIM 2021/ND/ACC/049
FAHAD ALI MUSA 2021/ND/ACC/101
USMAN UMAR 2021/ND/ACC/151
IBRAHIM ADAMU 2021/ND/ACC/204
MUSTAPHA MOHAMMED MOHAMMED 2021/ND/ACC/265

BEING A FINAL YEAR PROJECT SUBMITTED TO THE DEPARTMENT OF

ACCOUNTING IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE
AWARD OF NATIONAL DIPLOMA IN ACCOUNTANCY RAMAT POLYTECHNIC,
MAIDUGURI BORNO STATE.

OCTOBER, 2023

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 APPROVAL PAGE
This project has been read and approved by the examiners as having met the standard requirement

specified by the Department of Accountancy, Ramat Polytechnic, Maiduguri for the award of

National Diploma (ND) in Accountancy.

PROJECT SUPERVISOR Signature Date

Mal. Bashir Kachalla Mohammed …………… ……………..

PROJECT COORDINATOR Signature Date

Mal. Umar Makama …………… ……………..

HEAD OF DEPARTMENT Signature Date

Mallama Hafsat Bukar Adamu …………… ……………..

EXTERNAL EXAMINER Signature Date

NAME…………………….. ……………. ………………..

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 DEDICATION
We dedicated this research work to Almighty Allah and our family members.

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 ACKNOWLEDGEMENTS
We thank Almighty Allah for sustaining our life to this moment. By his Grace and infinite mercy,

this research has been completed successfully. Honestly speaking it is true that one cannot lift a

roof alone without been helped. Similarly, to undertake a research alone means a lot and it is not

even possible without contribution of the vision of others.

We acknowledge the immense contribution of my project supervisor Mal. Bashir Kachalla

Mohammed for his support, invaluable advice, motherly care enlightened, guidance, suggestion,

inexhaustible patience and the needed attention he gave us during the course of the research work.

Our special gratitude goes to the Head of Department in the person of Mallama Hafsat Bukar

Adamu, and our special appreciation also goes to our project coordinator in person of Mal. Umar

Makama and others lecturers in Department of Accountancy for their moral support and the

knowledge they impacted to us during the study.

Similarly, our heartfelt gratitude goes to our ever loved parents who have been pilot to our

educational advancement right from inception we want to add more strength to their elbow for

tolerance, patience, financially, moral and spiritual support that make our dream a reality today.

Finally, we thank dedicated this work to all our families, brothers, sisters, friends and relatives.

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 ABSTRACT
This research assessed the impact of internal control system on profit performance of commercial
banks in Nigeria in which First Bank of Nigeria Plc. Maiduguri Branch was used as case study.
Specifically, the study establish the effect of control environment on the profit performance of
commercial banks in Nigeria, Both primary and secondary sources of data were adhered to on the
course of this study and the attitude and responses of those interviewed were noted. The sample
size for this study is fifty (50) staff of First Bank Nigeria Plc. In determining the sample size, the
researcher used the Yaro Yamane’s formula. Data was obtained through questionnaire and oral
interviews. The data collected were analyze using simple percentage and chi-square (X2). The
findings of the research indicated that the bank routinely evaluate the overall effectiveness of your
internal control system. Findings also shows that there is a statistically significant relationship
between risk assessment and profit performance of commercial banks in Nigeria. It was
recommended that the internal auditor should issue reports of examination of the banks’ internal
control and if the proper procedures are not followed should alert the management and Board of
Directors of the development.
Keywords: Internal Control, Profit Performance, Commercial Banks, First Bank, Maiduguri

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 TABLE OF CONTENTS
Contents Pages
Title Page i
Approval Page ii
Dedication iii
Acknowledgements iv
Abstract v
Table of Contents vi
CHAPTER ONE: INTRODUCTION
1.1 Background to the study 1
1.2 Statement of the problem 3
1.3 Objectives of the study 4
1.4 Research questions 5
1.5 Statement of the hypothesis 5
1.6 Significance of the study 6
1.7 Scope of the study 7
1.8 Definitions of terms 7
CHAPTER TWO: LITERATURE REVIEW
2.1 Conceptual Framework 8
2.2 Theoretical frame work 14
2.3 Empirical Review 16
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Area of the Study 18
3.2 Research Design 18
3.3 Population of the Study 19
3.4 Sample Size and Sampling Techniques 19
3.5 Sources of Data 20
3.6 Method of Data Collection 20

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3.7 Method of Data Analysis 21
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.0 Data Presentation and Analysis 23
4.1 Findings of the Study 23
4.2 Discussion of Findings 26
4.3 Test of Hypothesis 31
4.4 Decision of the Study 40
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Summary 41
5.2 Conclusion 42
5.3 Recommendations 43
References 45
Appendix-1 Questionnaire 47

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 CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Internal controls have become of paramount importance today in Nigerian banks. The reason being

that the control systems in any organization are a pillar of an efficient accounting system

(Wanemba, 2015). The increasing volatility in global markets and need for enhanced shareholder

returns has motivated the management of firms to foster the internal control mechanisms as an

element of enhancing the competitive edge of firms (Rittenberg & Schwieger, 2010). This is

particularly important for banks as weak internal control system stands as one of the major cause

of dismal performance in banks mainly due to undetected frauds (Etuk, 2011). From a management

point of view there is need to ensure that internal control systems are put in place in order to reduce

the occurrence of fraud. Internal control is a dynamic integral process that is adapting continuously

to the changes facing modern banking industry (Wielstra, 2014).

The survival of any organization depends on the effective and efficient utilization of resources

(financial and non-financial) at the disposal of the organization. Hence, to optimize the utilization

of resources entrusted to all employees in an organization, various form of control are put in place

by management of the organization, among these major controls are internal control and internal

audit to mention a few.

According to Kirsch, (2007) Internal control can be defined as a set of mechanism designed to

motivate an individual or a group towards achievement of a desired objective, while, Ouchi (1999)

stated that internal control must be able to achieve the objective of bringing about cooperation

among people with divergent objectives in an organization. Similarly, International Standard on

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Auditing (ISA 400) defines internal control as all policies and procedure adopted by the

management of an entity to assist in achieving the primary objectives of the management by make

sure the business is conducted in the most possible efficient way and also ensuring strict adherence

to management policies, safeguarding of asset, prevention and detection of fraud and timely

preparation of reliable account.

On the other hand, Financial Performance of an organization can be described in various form,

such as; return on assets, return on sales, return on equity, return on investment, return on capital

employed and sales growth (Gerrit & Abdolmohammadi, 2015). It is also a measure of the excess

value a company has provided to its shareholders over the total amount of their investments.

According to Donald & Delno (2014), appropriate performance measures are those which enable

organizations to direct their actions towards achieving their strategic objectives. An entity should

put in place its own system of controls in order to achieve its objectives (Mwindi, 2013). A system

of effective internal controls is a critical component of company management and a foundation for

the safe and sound operation of organizations. However, ineffective internal controls result in

ineffective programs and eventually leading to losses (Olumbe, 2012).

Internal controls are intended primarily to enhance the reliability of financial performance, either

directly or indirectly by increasing accountability among information providers in an organization

(Jensen, 2008). Internal controls provide an independent appraisal of the quality of managerial

performance in carrying out assigned responsibilities for performance (Beeler et al, 2009). Fadzil

et al (2010) said that an effective internal control system unequivocally correlates with

organizational success in meeting its performance target level. Internal control keeps an

organization on course toward its objectives and the achievement of its mission. They promote

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effectiveness and efficiency of operations, reduces the risk of asset loss, and helps to ensure

compliance with laws and regulations.

1.2 Statement of the Problem

There have been incessant cases and stories been told about high frequency of fraud,

embezzlement, overcharging, manipulation, missing files and ledger cards and other banking

malpractices in banks today, with the management and shareholders not knowing how to handle

the adverse situation.

The First Bank of Nigeria were not left out in these increase in crime wave problems and banking

malpractices, despite the existence of inter-control and devices adopted to detect fraud. This

situation has culminated in the lack of confidence by the staff, shareholders and customer over the

growth and profitability of the banks.

Despite the guidelines set out by Central Bank of Nigeria in accordance with the Banking Act Cap,

there has been numerous cases of bank failures in performance due to fraud and lack of elaborate

internal controls as well as compliance with internal and external regulations within the industry

(FLSTAP, 2011). Olumbe (2012) studied the relationship between internal control systems and

corporate governance in commercial banks in Nigeria. This study, however, did not measure the

moderating effect of the CBN prudential guidelines. Njenga and Osiemo (2013) studied the effect

of fraud detection through an internal control on the performance of deposit- taking microfinance

institutions in Nigeria. However, this research did not review in detail all the internal control

system aspects. Ochoge (2011) was emphasizing on the internal control and organizational

performance, the above research failed to show the direct contribution of internal control to the

financial performance.

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From the mentioned literature it was evident that internal control systems influence the

performance of both financial and non-financial institutions, in the current market environment

where financial institutions have been on the receiving end due to unethical issues and increase in

banking fraud it’s imperative to assess the role of internal control systems in mitigating losses and

fraud in the banking industry. The scanty evidence on the relationship between internal control

systems and performance of commercial banks has motivated the current research. This will

enhance both the practices and academic knowledge gap. Further, this research was undertaken to

fill this knowledge gap by studying the effects of internal controls system on profit performance

of commercial banks in Nigeria with special interest on First Bank of Nigeria Plc. Maiduguri

branch.

1.3 Objectives of the Study

The broad objective of this study is to assess the impact of internal control system on profit

performance of commercial banks in First Bank of Nigeria Plc. Maiduguri Branch.

The Specific Objectives are:

i. To establish the effect of control environment on the profit performance of commercial

banks in First Bank of Nigeria Plc Maiduguri Branch.

ii. To determine the effect of risk assessment on profit performance of commercial banks in

First Bank of Nigeria Plc Maiduguri Branch.

iii. To assess the effect of information and communication on financial performance of

commercial banks in First Bank of Nigeria Plc Maiduguri Branch.

iv. To establish the effect of control activities on the profit performance of commercial banks

in First Bank of Nigeria Plc Maiduguri Branch.

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 v. To assess the effect of monitoring on the profit performance of commercial banks in First

Bank of Nigeria Plc Maiduguri Branch.

1.4 Research Questions

i. What are the effects of control environment on the profit performance of commercial banks

in First Bank of Nigeria Plc. Maiduguri Branch?

ii. What are the effects of risk assessment on profit performance of commercial banks in First

Bank of Nigeria Plc. Maiduguri Branch?

iii. What are the effects of information and communication on financial performance of

commercial banks in First Bank of Nigeria Plc. Maiduguri Branch?

iv. What are the effects of control activities on the profit performance of commercial banks in

First Bank of Nigeria Plc. Maiduguri Branch?

v. What are the effects of monitoring on the profit performance of commercial banks in First

Bank of Nigeria Plc. Maiduguri Branch?

1.5 Statement of the Hypothesis

H0l: There is no significant influence of the control environment on profit performance of

commercial banks in Nigeria.

H02: There is no significant relationship between risk assessment and profit performance of

commercial banks in Nigeria.

H03: There is no significant relationship between information and communication and profit

performance of commercial banks in Nigeria.

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H04: There is no significant effect of control activities on the profit performance of commercial

banks in Nigeria.

H05: There is no relationship between monitoring and profit performance of commercial banks in

Nigeria.

1.6 Significance of the Study

The research is intended to define the level of internal control and its impact on profitability of

First Bank of Nigeria Plc. Maiduguri Branch. It will be of great importance to the banking staff

especially the managers and officers whose interest are geared towards the enhancement of the

chances of bank profitability; in serving as a guide in the performance of their duties. It will assess

the effect of fraud, manipulations, errors, improper authorization, dishonesty, inadequate

accounting records etc. on profitability in view of the existing internal control system.

A comprehensive knowledge of system of internal control will form a foundation on which the

auditor’s report on “true and fair view” final account is based and as such, the study will be of

immense values to the practicing Accountants, Auditors, Lawyers, shareholder and other interested

parties for acceptance and reliance of financial statement.

Furthermore, it will include more research in the improvement of banking services in Nigeria for

the interest of the shareholders, customers and government.

Finally, the study will provide the basis for recommendation to the management of the best

approach to designing, installing and operating an improved system of internal control aimed at

promoting operational efficiency and eliminating or at least minimizing waste.

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1.7 Scope of the Study

This study covered the internal control systems adopted by various commercial banks in Nigeria.

The population sample was taken from First Bank of Nigeria and their branches in Maiduguri

Borno State. Other parts of the country were not covered, though empirically generalized view

was made of them.

1.8 Definition of Terms

The researcher at this point believes that some key words and terms that will be encountered while

reading this research work will be defined.

Internal Control System: This is the whole system of controls, financial and otherwise

established by the management in order to carry on the business of the enterprises in orderly and

efficient manner, ensure adherence to management policies, safeguard the assistance and secure

as far as possible the complements and accuracy of the records.

Internal Accounting/Financial Control: Measures that relate to protection of assets and to the

reliability of accounting information and financial statements.

Internal Administrative Control: A sub category of internal controls which reply principally to

operational efficiency and compliance with company policy and which do not bear directly on the

dependability of financial statement.

Internal Auditing: An activity carried on in some organization by a professional staff to

investigate and evaluate the system of internal control on a year round basis. Also to evaluate the

efficiency of individual department within the organization.

Effectiveness: Attainment of a predetermined goal.

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 CHAPTER TWO

LITERATURE REVIEW

2.0 Introduction

This chapter presents the literature as well as the conceptual framework and theoretical framework

for the study so as to serve as a link between the past and the present.

2.1 Conceptual framework

2.1.1 The Concept of Internal Control

The structure of modern banking system and the high expectation from the investors and the

society at large has called for a more tightened internal control system. Internal control has been

variously defined.

According to Princeton (2013) Internal Control is a process effected by an organization’s structure,

work and authority flows, people and management information system, designed to help the

organization accomplish specific goals or objective”. From the definition, the objective of any

internal control should be directed towards the attainment of the organizational objectives. In the

words of Okozie (2009) “Internal Control is the whole system of controls, financial and otherwise,

established by the management in order to carry on the business of the enterprise in an orderly and

efficient manner, ensure adherence to management policies, safeguard the assets and secure as far

possible the completeness and accuracy of the records”. A sound internal control system should

provide the platform for recording and processing transactions in such a way that it form adequate

basis for the preparation of the financial statement.

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An efficient internal control system involved a clear definition and separation of duties for various

employees or groups within a company. The intent of separating the duties is to protect against

fraud, waste, abuse and mismanagement of resources. Effective internal control helps to assure the

accuracy of reports to management and the various supervising bodies (in the case of banks).

According to Asuquo (2010) “Internal Control is made up of internal checks, internal audit,

accounting controls and other forms of controls such as budgetary and physical control”. Okozie

(2009) posited that “the primary responsibility for the maintenance of the effective internal control

rest with the management of any enterprise”.

2.1.2 Types of Internal Control

The Auditing standard “The Auditors Operational Standard" sets out some of the types of controls

which the auditor may find in many enterprise. These include:

Organization:- The standard states that enterprises should have a plan of their organization,

defining and allocating responsibilities and identifying lines of reporting for all aspects of the

enterprises operations, including the controls. The delegation of authority and responsibility

should be clearly specified.

Segregation of Duties: - One of the prime means of control is the segregation of those

responsibilities or duties which would, if combined enable one individual to record and process

a complete transaction. The involvement of several people in a process reduces the risk of

intentional manipulation or accident error and increase the element of checking of work.

Physical:- These are concerned with mainly the custody of assets and involve procedures and

security measures designed to ensure that access to assets is limited to authorized personnel.

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Authorization and Approval: - All transactions should require authorization or approval by

an appropriate person. The limited of these authorities should be specified.

Arithmetical and Accounting:- These are the controls associated with the recording function

which checks that the transactions to be recorded and processed have been authorized, that

they are induced and that they are correctly recorded and accurately processed. Such controls

according to the guideline includes checking the arithmetical accuracy of the records, the

maintenance and checking the totals, reconciliations, control accounts and trial balances

accounting for documents.

Personnel:- There should be procedures to ensure that personnel have capabilities

commensurate with their responsibilities, inevitably, the proper functioning of any system

depends on the competence and integrity of those operating it. The qualification, selection,

remuneration, promotion, career development prospects and training, assignment of tasks of

the right level as well as innate personal characteristics of the personnel involved are important

features to be considered in setting up any control system.

Supervision: - The guideline provides that any system of internal control should include the

supervision by responsible officials of day-to-day transactions and the recording thereof. In

other words, all actions by all levels of staff, should be supervised. The responsibility for

supervision should be clearly laid down and communicated to the person being supervised.

Management: - These are the controls, exercised by the management outside the day-to-day

routine of the system. They include the overall supervising controls exercise by management,

the review of management accounts and comparison thereof with budgets, the internal audit

function and any other special review procedures.

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 Budgeting: - A common technique used in business is the use of budgets, which can be defined

as quantitative plans of action. Budgets having been agreed, can be compared with actual turn

out and differences investigated.

2.1.3 Internal Control Objectives

Internal control activities are designed to provide reasonable assurance that particular objectives

are achieved, or related progress understood.

There are ‘seven detailed objective that an internal control system must meet to prevent errors in

the journals and records.’

Accounting to Aren and Loebbecke (2004), the client’s system of internal control must be

sufficient to provide reasonable assurance that:

Recorded Transactions are valid (Validity): The system cannot permit the inclusion of fictitious

or nonexistent transactions in journals or other accounting records.

Transactions are properly authorized (Authorization): If a transaction that is not authorized

takes place, it could result in a fraudulent transaction, and it could also have the effect of wasting

or destroying company assets.

Existing transactions are recorded (Completeness): The client’s procedures must provide

controls to prevent the omission of transactions from the records.

Transaction are properly valued (Valuation): An adequate system includes procedures to avoid

errors in calculating and recording transactions at various stages in the recording process.

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Transactions are properly classified (Classification): The proper account classification

according to the client’s chart of accounts must be made in the journals if the financial statements

are to be properly stated. Classification also includes such categories as division and product.

Transactions are recorded at the proper time, (Timing): The recording of transactions either

before or after the time they took place increases the likelihood of failing to record transactions or

of recording them at the improper amount. If late recording occurs at the end of the period, the

financial statements will be misstated.

Transactions are properly included in subsidiary records and correctly summarized (Posting

and Summarization): In many instances, individual transactions are summarized and totaled

before they are recorded in the journals. The journals are then posted to the general ledger, and the

general lodger is summarized and used to prepare the financial statements.

2.1.4 Internal Control System in Commercial Banks

The nature and operation of commercial banks require an effective system of internal control.

Attwood and Stein maintained that the highest standard of internal control must be present in view

of the large amount of cash present in banks, and possible opportunities to manipulate accounts if

controls were absent. They opined that the following controls are necessary for every branch of a

bank:

• Custody Control: - Access to bank vaults, strong room and other stores require the

presence of two designated bank officials, manager and Accountant to open them and strict

records are kept of the issue and receipt of cash and securities.

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 • Segregation of Duties: - No staff of the bank will be allowed to record and process a

complete transaction. The work will be so separated that a transaction has to pass through more

than one person for it to be completed.

• Authorization: - Procedures must be established governing the granting of overdrafts and

the monitoring of balances. Limit is normally placed on the manager's authority. Beyond that

limit, authorization will be needed from a higher officer.

• Regular Review Of Accounts Of Bank Staff: - This is aimed at detecting unusual

movements, possibly indicative of involvement of fraud.

• Active Internal Audit: - Teams of internal auditors normally referred to in the banking

industry as inspectors, should be making surprise visits to branches to count cash and review

the operations of other branch controls.

2.1.5 The Effect of Internal Control on Financial Performance.

Muraleetharan (2011) found internal control system and financial performance were statistically

significant in determining corporate goals. This is in tandem with the objective of this study.

Internal controls promote efficiency, reduce risk of asset loss and help ensure the reliability of

financial statements and compliance with the laws and regulations. Whittington and Pany (2006)

talked about the comprehensiveness of internal controls in addressing the achievement of

objectives in financial reporting, operations and compliance with laws and regulations. Doyle et

al. (2010) found that the company level of control problems, which cannot be audited as easily,

are associated with lower earnings quality, which explore links between disclosure of material

weakness and fraud, earnings management or restatements. According to Magara (2013), effective

internal controls are one of the mechanisms used to address the agency problems. Banks that have

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effective internal controls in place easily address the agency problems, minimize agency costs and

mitigates against earnings management resulting to scandalous reporting that could lead to loss of

resources. The agency problems discussed have a negative impact on Banks profitability.

2.2 Theoretical Framework

2.2.1 Theory of Internal Control

A system of effective internal control is a critical component of an organization’s management

and a foundation for its safe and sound operation. A system of strong internal control can help to

ensure that the goals and objectives of an organization will be met, that it will achieve long-term

targets and maintain reliable financial and managerial reporting. Such a system can also help to

ensure that the organization will comply with laws and regulations as well as policies, plans,

internal rules and procedures, and reduce the risk of unexpected losses and damage to the

organization’s reputation.

2.2.2 The Agency Theory

The agency theory holds that a firm is made up of owners of the resource (principals) and the

managements (agents) (Jensen & Meckling, 1996). The agents of the firm have more information

than the principals which creates an information asymmetry which affects the ability of the firms

owners to monitor whether there interests are being protected by the agents (Jensen & Meckling,

1996).

In order to ensure harmonization of the interests of the principal and their agents the theory posits

that a comprehensive contract is necessary to ensure that the interests of the principals are met.

The relationship between the agent and principal is further strengthened by employing experts and

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systems such as audit and control environment (Jussi & Petri, 2009). The internal control system

further helps to reduce information asymmetry within the firm.

2.2.3 Attribution Theory

Attribution theory is a social psychology theory that explores how people interpret events and

behaviors and how they ascribe causes to the events and behaviors. According to Schroth and Shah

(2005), studies using attribution theory examine the use of information in the social environment

to explain events and behaviors. Reffett (2012) asserts that when evaluators believe comparable

persons would have acted differently in a given circumstance, they (evaluators) tend to attribute

responsibility for an outcome to the person. According to Wilks and Zimbelman (2009), the first

case refers to internal or dispositional attributions while the second one refers to external or

situational attributions.

The auditor’s accountability for detecting fraud is extended by Reffett’s (2012) study which

predicted that auditors are more likely to be held accountable by evaluators when the auditors fail

to detect fraud after they had identified the fraud occurrence as a fraud risk. The result of Reffett’s

study shows an increase in auditors’ liability when an audit fails after the auditors had identified

the perpetrated fraud as a fraud risk and performed procedures to investigate the identified fraud

risk.

2.2.4 Reliability Theory

Reliability theory simply describes the probability of a system completing its expected function

during an interval of time (Gavrilov & Gavrilova, 2006). The theory has been used as a model by

insurance and life insurance companies in computing profitable rates to charge their customers.

The theory stipulates that internal control systems are primarily set up for assessment and control

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of risks. The theory further argues that weak internal control systems result in more substantive

work and hence greater cost (Kinney, 2005).

2.3 Empirical Review

Several scholars have carried out research in order to establish the relationship between internal

control and financial performance.

Ayagre, et al. (2014) researched the effectiveness of Internal Control Systems of banks: The case

of Ghanaian banks. This study evaluated the control environment and monitoring activities

components of Internal Control Systems of Ghanaian Banks using COSO’s principles and

attributes of assessing the effectiveness of internal control systems. The study found out that,

strong controls exist in the control environment and monitoring activities components of the

internal control systems of banks in Ghana. The study recommended that boards of banks in Ghana

should not be complacent about the findings but should work hard to ensure continuous ongoing

and separate internal control monitoring to ascertain that controls really exist and are functioning

properly.

Hayali, et al. (2014) studied the importance of internal control system in the banking sector:

Evidence from Turkey. In this study, the importance of internal control system was expressed, also

its impacts to the banking system analyzed. The research showed that the internal control activities

of the banks are adapted to the international standards in Turkey and effective control procedures

existed in the banking system. In addition, efficient internal control mechanisms have great impact

on the strong and stable outlook of Turkish banking sector.

Bayyoud and Sayyad (2015) studied the impact of internal control and risk management on banks

in Palestine. The investigation helped in identifying the impacts of new banking reformations and

16
rules on the risk assessment, identification, and mitigation in banks. The findings showed that

overall internal control and risk management systems in Palestine have positively affected the

banks in terms of quantitative as well as qualitative performance.

Ndiwa and Kwasira (2014) carried out a study guided by the Agency Theory to test empirically

the effects of internal control on financial performance in tertiary institutions in Kenya. The study

used a case study research design. The findings showed that the institution’s Internal Audit

Department inadequately staffed. It recommended The Internal Audit Department sufficiently

staffed, and the recruitment process of the auditors should be free from the management influence.

Ireri and Wagoki (2014) carried out a study to establish the role of internal control system

components in Kenyan public universities. The study found out that there were internal control

mechanisms in the Kenyan universities but they were ineffective. The study recommended the

strengthening of training and guidance in internal control systems to ensure that all employees not

only were aware of controls but actively participate in their effectiveness.

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 CHAPTER THREE

RESEARCH METHODOLOGY

This chapter focuses on methodologies to be adopted for this research and it will include study

area, research design, and population of the study, sample and sampling techniques, source of

data collection, method of data collection and method of data analysis.

3.1 Area of the Study

Maiduguri is the capital of Borno state which is located in the north east zone of Nigeria. Even

though with the fact of insecurity difficulties, yet people are marketing in and outside the State for

business purposes.

First Bank of Nigeria, sometimes referred to as First Bank, is a multinational bank and financial

services company headquartered in Lagos. It is the biggest bank in Nigeria by total deposits and

gross earnings. It operates a network of over 750 business locations across Africa, the United

Kingdom and representative offices in Abu Dhabi, Beijing and Johannesburg set up to capture

trade-related business between geographies.

3.2 Research Design

Research design provided the glue that holds the research project together. A research design is

used to structure the research to show how all major part of the research project work digestion

that were used.

According to Baridam (1994) research design could therefore be seen as a framework or plan that

is use as a guide in collecting and analyzing the data for study. The study was designed in a manner

the objective having verified the problems and developed empirical question and hypothesis, the

18
researcher engage into a field work to obtain relevant primary data for the execution and assistance

definitely, and this is a survey research. Survey research is the method of gathering data from

respondents to the representative of some population using an instrument composed of closed or

open ended items (questionnaire). The survey design was used in this research so as to ensure

originality and reliability.

3.3 Population of the Study

Malhotra & Dash (2010) defined target population as the collection of elements or objects that

possess the information sought by the researcher and about which inferences are to be made. The

study population consisted of 150 employees of First Bank of Nigeria Plc Maiduguri Branch. This

population comprised of Managers and Assistant Managers of various department, senior Staff

Officers, Senior Supervisors, Supervisors and foreman.

3.4 Sample Size and Sampling Techniques

Mboho (2010) defined sample as a part or subset of a population. The sample size for this study is
fifty (50) staff of First Bank Nigeria Plc. In determining the sample size, the researcher will use
the Yaro Yamane’s formula as stated in Udeze (2005).
n = N

1 +N (e)2

Where N = Population

n = Sample size

e = Standard Error (10%)

Thus = 150
1 +150 (0.1)2
= 150
1 +150 (0.1)2

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 = 150
1 +150 (0.01)
= 150
2.5
= 150
3
= 50
The sample size of 50 will be selected using a non-probability judgment sampling method. The

respondents will be limited to Managers and Assistant Managers of various department, senior

Staff Officers, Senior Supervisors, Supervisors and foreman.

The various head will be selected as sample because they constitute the suppose cost reduction

committee that plan, and implement these cost reduction techniques in their various department. It

is believe that the staff above will be able to give relevant information with regards to the problem

at hand.

3.5 Sources of Data

For the purpose of this research, both primary and secondary research will be adopted. The primary

data were obtained from the management of the First Bank of Nigeria Plc Maiduguri Branch with

the aid of a structured questionnaire. The secondary data will be obtained from textbooks, journals,

publications, magazines and past research works.

3.6 Method of Data Collection

According to Etuk (2010) data collection is the process through which a researcher searches for

data to help him solve the problem at hand. Data will be obtained through questionnaire and oral

interviews.

20
3.7 Method of Data Analysis

The data that will be collected from various sources, will be analyze using the following statistical

measurement.

(i) Simple percentage

(ii) Chi-square (X2)

Percentage: It is appropriate to use percentages when determining number of respondents that is

in agreement with the question to be asked.

Chi-square (X2): The chi-square (X2) is among the non-parametric statistic test that is for one,

two, or more variables. The purpose of this test is to determine how the observed set of data differs

from the expected set of data.

The chi-square formula is given below:

X2 = (fo-fe)

fe
Where X2 = chi-square

fo = frequency observed

fe = frequency expected
In obtaining the chi-square, the degree of freedom and the values of the significance will be

considered important. This study will make use of 0.5% level of significance in testing the

hypotheses.

The decision rule of the study is given as follows: to accept or reject the Null hypothesis, the

calculated value will be compared with the critical table value. If the calculated or computed

21
chisquare value (X2) at 0.05 level of significant is greater than table value, the null hypothesis is

rejected while the alternative hypothesis is accepted. On the other hand, if calculated or chi-square

value (X2) is less than or equal to the table value, the null hypothesis is accepted while alternative

hypothesis rejected.

22
 CHAPTER FOUR

DATA ANALYSIS, FINDINGS AND DISCUSSION

4.0 Data Analysis, Findings and Discussion

This chapter is connected with the analysis and presentation of the data collected during the field

survey through the use of questionnaires.

This chapter will at least present the data collected in form of table to facilitate easy understanding

analysis and discussion of the respondents view in relation to issues raised in the questionnaires.

These enables the researcher to form opinion based on the analyzed data.

Relevant question from section B of the questionnaires are gathered and analyzed for the purposes

of decision making either in acceptance or rejection of relevant hypothesis of the study.

4.1 Findings of the Study

Table 4.1.1: Demographic Characteristics of Respondents based on Sex

Options No of Response Percentage (%)

Male 30 60

Female 20 40

Total 50 100

Source: Fieldwork, 2023

Table 4.1.1 above shows that 30 representing 60% of the respondents were male while 20

representing 40% of the respondents were female.

23
Table 4.1.2: Demographic Characteristics of Respondents based on Marital Status

Options No of Response Percentage (%)

Single 35 70

Married 15 30

Total 50 100

Source: Fieldwork, 2023

Table 4.1.2 above shows that a total number of 35 respondents representing (70%) are single while

the total numbers of 15 respondents representing (30%) are married.

Table 4.1.3: Demographic Characteristics of Respondents based on Age

Options No of Response Percentage (%)

Below 30 25 50

31 – 40 15 30

41 and above 10 20

Total 50 100

Source: Fieldwork, 2023

The Table 4.1.3 above shows that 25, (50%) of the respondents fall within the age range of below

30 years, 15, (30%) fall within the age range of 31 – 40 years while 10 (20%) fall within the age

range of 41 and above.

24
Table 4.1.4: Demographic Characteristics of Respondents based on Educational Qualifications

Options No of Response Percentage (%)

HND/B.Sc./B.A. 24 48

OND/NCE 20 40

SSCE/GCE 6 12

Total 50 100

Source: Fieldwork, 2023

The above Table 4.1.4 shows the total numbers of 24 respondents representing (48%) are B.Sc.,

B.A. and HND holders, 20 respondents representing (40%) are OND and NCE holders while 6

respondents representing (12%) of the educational qualifications are SSCE and GCE holders.

Table 4.1.5: Demographic Characteristics of Respondents based on Years of Experience

Options No of Response Percentage (%)

Below 5 32 64

5 – 9 years 10 20

10 years and above 8 16

Total 50 100

Source: Fieldwork, 2023

The Table 4.1.5 above shows that total of 32 respondents representing (64%) has put in less than

5 years in years of experience, 10 of the respondents representing (20%) have put in between 5

and 9 years while 8 respondents representing (16%) have put in more than 10 years of experience.

25
4.2 Discussion of Findings

Section B

Question 1

Do you routinely evaluate the overall effectiveness of your internal control system?
Table 4.1.6

Options No of Response Percentage %

Yes 50 100

No - -

Total 50 100%

Source: Fieldwork, 2023

The above table shows that all the respondents agreed that they routinely evaluate the overall

effectiveness of your internal control system.

Question 2

Is there effect of control environment on the profit performance of commercial bank in Nigeria?
Table 4.1.7

Options No of Response Percentage %

Yes 34 68

No 16 32

Total 50 100%

Source: Fieldwork, 2023

The above table shows that 34 respondents representing (68%) agreed that there is effect of control

environment on the profit performance of commercial bank in Nigeria.

26
Question 3

Do the branch management and its representatives have complete access to records?
Table 4.1.8

Options No of Response Percentage %

Yes 37 74

No 13 26

Total 50 100%

Source: Fieldwork, 2023

From the above table it was shown that 37 respondents representing 74% agreed that branch

management and its representatives have complete access to records.

Question 4

Is there effect of risk assessment on profit performance of commercial banks in Nigeria?

Table 4.1.9

Options No of Response Percentage %

Yes 35 70

No 15 30

Total 50 100%

Source: Fieldwork, 2023

From the table above it was revealed that most of the respondents with 35 responses representing

70% agreed that there is effect of risk assessment on profit performance of commercial banks in

Nigeria.

27
Question 5

Are the systems of internal controls referred to in for above functioning as they are intended to?
Table 4.1.10

Options No of Response Percentage %

Yes 37 74

No 13 26

Total 50 100%

Source: Fieldwork, 2023

From the table above it was revealed that most of the respondents agreed that the systems of

internal controls referred to in for above functioning as they are intended to.

Question 6

Does information and communication on financial performance have effect on commercial banks
in Nigeria?
Table 4.1.11

Options No of Response Percentage %

Yes 33 66

No 17 34

Total 50 100%

Source: Fieldwork, 2023

From the table above it was revealed that most of the respondents with 33 responses representing

66% agreed that information and communication on financial performance have effect on

commercial banks in Nigeria.

28
Question 7

Do you agree that the responsibility of internal control is that of the management?
Table 4.1.12

Options No of Response Percentage %

Yes 39 78

No 11 22

Total 50 100%

Source: Fieldwork, 2023

The above table shows that 39 respondents representing (78%) agreed that the responsibility of

internal control is that of the management.

Question 8

Are there effects of control activities on the profit performance of commercial banks in Nigeria?
Table 4.1.13

Options No of Response Percentage %

Yes 34 68

No 16 32

Total 50 100%

Source: Fieldwork, 2023

From the table above it was revealed that most of the respondents with 34 responses representing

68% agreed that there are effects of control activities on the profit performance of commercial

banks in Nigeria.

29
Question 9

Does the accounting system records all the transactions of the bank and produce accurate

information capable of being relied upon by management and investors?

Table 4.1.14

Options No of Response Percentage %

Yes 31 62

No 19 38

Total 50 100%

Source: Fieldwork, 2023

From the table above it was revealed that most of the respondents with 31 responses representing

62% agreed that accounting system records all the transactions of the bank and produce accurate

information capable of being relied upon by management and investors.

Question 10

Does commercial bank in Nigeria monitors the performance of profit?

Table 4.1.15

Options No of Response Percentage %

Yes 27 54

No 23 46

Total 60 100%

Source: Fieldwork, 2023

30
From the table above it was revealed that most of the respondents with 27 responses representing

54% agreed that commercial bank in Nigeria monitors the performance of profit.

4.3 Test of Hypothesis

With special reference to the purpose of this study, this hypothesis shall be tested using the chi-

square.

Hypothesis One

HO: There is no statistically significant influence of the control environment on profit performance

of commercial banks in Nigeria.

H1: There is statistically significant influence of the control environment on profit performance of

commercial banks in Nigeria.

The hypothesis can be tested by using table 4.1.7 where a total of 34 respondents representing

(68%) agreed that there is effect of control environment on the profit performance of commercial

bank in Nigeria.

Test Statistics:

Formula X2 = ∑ (oi – ei)2

ei

Where X2 = Chi-Square

oi = Observed frequency

ei = Expected frequency

31
Assumption:

The level of significance used is 5%. That is 0.05

Degree of Freedom:

The degree of freedom is given as thus;

DF = (R – 1) (C – 1)
Where, R = Rows
C = Columns

DF = (2 – 1) (2 – 1)

DF = 1x1

= 1
NOTE: The value of 1 at 0.05 significant level is 3.841 using the chi-square table.

Thus: The critical value is given as X2 is 3.841.

Table 4.2.1: Testing of the 1st Hypothesis

o e o–e (o – e)2 (o – e)2

e
34 25 9 81 3.24

16 25 -9 81 3.24

50 6.48

Comparing the test statistics with critical value 6.48 > 3.841
Decision Rule: Since the calculated value of X2 is greater than the critical value 3.841, the null

hypothesis which states that there is no statistically significant influence of the control environment

on profit performance of commercial banks in Nigeria is rejected and the alternative hypothesis

which states that there is statistically significant influence of the control environment on profit

performance of commercial banks in Nigeria is accepted.

32
Conclusion: There is statistically significant influence of the control environment on profit

performance of commercial banks in Nigeria.

Hypothesis Two

HO: There is no statistically significant relationship between risk assessment and profit

performance of commercial banks in Nigeria.

H1 : There is statistically significant relationship between risk assessment and profit

performance of commercial banks in Nigeria.

The hypothesis can be tested by using table 4.1.9 where a total of 35 responses representing 70%

agreed that there is effect of risk assessment on profit performance of commercial banks in Nigeria.

Test Statistics:

Formula X2 = ∑ (oi – ei)2

ei

Where X2 = Chi-Square

oi = Observed frequency

ei = Expected frequency

Assumption:

The level of significance used is 5%. That is 0.05

Degree of Freedom:

The degree of freedom is given as thus;

DF = (R – 1) (C – 1)

33
Where, R = Rows

C = Columns

DF = (2 – 1) (2 – 1)

DF = 1x1

= 1
NOTE: The value of 1 at 0.05 significant level is 3.841 using the chi-square table.

Thus: The critical value is given as X2 is 3.841.

Table 4.2.2: Testing of the 2nd Hypothesis

o e o–e (o – e)2 (o – e)2

e
35 25 10 100 4

15 25 -10 100 4

50 8

Comparing the test statistics with critical value 8 > 3.841

Decision Rule: Since the calculated value of X2 is greater than the critical value 3.841, the null

hypothesis which states that there is no statistically significant relationship between risk

assessment and profit performance of commercial banks in Nigeria is rejected and the alternative

hypothesis which states that there is statistically significant relationship between risk assessment

and profit performance of commercial banks in Nigeria is accepted.

Conclusion: There is statistically significant relationship between risk assessment and profit

performance of commercial banks in Nigeria.

34
Hypothesis Three

HO: There is no statistically significant relationship between information and communication and

profit performance of commercial banks in Nigeria.

H1: There is statistically significant relationship between information and communication and

profit performance of commercial banks in Nigeria.

The hypothesis can be tested by using table 4.1.11 where a total of 33 responses representing 66%

agreed that information and communication on financial performance have effect on commercial

banks in Nigeria.

Test Statistics:

Formula X2 = ∑ (oi – ei)2

ei

Where X2 = Chi-Square

oi = Observed frequency

ei = Expected frequency

Assumption:

The level of significance used is 5%. That is 0.05

Degree of Freedom:

The degree of freedom is given as thus;

DF = (R – 1) (C – 1)

Where, R = Rows

C = Columns

35
 DF = (2 – 1) (2 – 1)

DF = 1x1
= 1
NOTE: The value of 1 at 0.05 significant level is 3.841 using the chi-square table.

Thus: The critical value is given as X2 is 3.841.

Table 4.2.3: Testing of the 3rd Hypothesis

o e o–e (o – e)2 (o – e)2

e
33 25 8 64 2.56

17 25 -8 64 2.56

50 5.12

Comparing the test statistics with critical value 5.12 > 3.841
Decision Rule: Since the calculated value of X2 is greater than the critical value 3.841, the null

hypothesis which states that there is no statistically significant relationship between information

and communication and profit performance of commercial banks in Nigeria is rejected and the

alternative hypothesis which states that there is statistically significant relationship between

information and communication and profit performance of commercial banks in Nigeria is

accepted.

Conclusion: There is statistically significant relationship between information and

communication and profit performance of commercial banks in Nigeria.

Hypothesis Four

HO: There is no statistically significant effect of control activities on the profit performance of

commercial banks in Nigeria.

36
H1: There is statistically significant effect of control activities on the profit performance of

commercial banks in Nigeria.

The hypothesis can be tested by using table 4.1.13 where a total of 34 responses representing 68%

agreed that there are effects of control activities on the profit performance of commercial banks in

Nigeria.

Test Statistics:

Formula X2 = ∑ (oi – ei)2

ei

Where X2 = Chi-Square

oi = Observed frequency

ei = Expected frequency
Assumption:

The level of significance used is 5%. That is 0.05

Degree of Freedom:

The degree of freedom is given as thus;

DF = (R – 1) (C – 1)

Where, R = Rows

C = Columns

DF = (2 – 1) (2 – 1)

DF = 1x1
= 1
NOTE: The value of 1 at 0.05 significant level is 3.841 using the chi-square table.

Thus: The critical value is given as X2 is 3.841.

37
Table 4.2.4: Testing of the 4th Hypothesis

o e o–e (o – e)2 (o – e)2

e
34 25 9 81 3.24

16 25 -9 81 3.24

50 6.48

Comparing the test statistics with critical value 6.48 > 3.841
Decision Rule: Since the calculated value of X2 is greater than the critical value 3.841, the null

hypothesis which states that there is no statistically significant effect of control activities on the

profit performance of commercial banks in Nigeria is rejected and the alternative hypothesis which

states that there is statistically significant effect of control activities on the profit performance of

commercial banks in Nigeria is accepted.

Conclusion: There is statistically significant effect of control activities on the profit performance

of commercial banks in Nigeria.

Hypothesis Five

HO: There is no relationship between monitoring and profit performance of commercial banks in

Nigeria.

H1: There is relationship between monitoring and profit performance of commercial banks in

Nigeria.

The hypothesis can be tested by using table 4.1.15 where a total of 27 responses representing 54%

agreed that commercial bank in Nigeria monitors the performance of profit.

Test Statistics:

38
Formula X2 = ∑ (oi – ei)2

ei

Where X2 = Chi-Square

oi = Observed frequency

ei = Expected frequency
Assumption:

The level of significance used is 5%. That is 0.05

Degree of Freedom:

The degree of freedom is given as thus;

DF = (R – 1) (C – 1)

Where, R = Rows

C = Columns

DF = (2 – 1) (2 – 1)

DF = 1x1

= 1
NOTE: The value of 1 at 0.05 significant level is 3.841 using the chi-square table.
Thus: The critical value is given as X2 is 3.841.
Table 4.2.5: Testing of the 5th Hypothesis

o e o–e (o – e)2 (o – e)2

e
27 25 2 4 0.16

23 25 -2 4 0.16

50 0.32

Comparing the test statistics with critical value 0.32 < 3.841
Decision Rule: Since the calculated value of X2 is lesser than the critical value 3.841, the null

hypothesis which states that there is no relationship between monitoring and profit performance

39
of commercial banks in Nigeria is accepted and the alternative hypothesis which states that there

is relationship between monitoring and profit performance of commercial banks in Nigeria is

rejected.

Conclusion: There is no relationship between monitoring and profit performance of commercial

banks in Nigeria.

40
 CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Summary

The general objective of this study was to examine the impact of internal control on profit

performance of commercial banks, a study of First Bank Nigeria Plc. Other specific objectives are

to; examine the effect of control environment on the profit performance of commercial banks in

Nigeria, examine the effect of risk assessment on profit performance of commercial banks in

Nigeria, assess the effect of information and communication on financial performance of

commercial banks in Nigeria, establish the effect of control activities on the profit performance of

commercial banks in Nigeria and to assess the effect of monitoring on the profit performance of

commercial bank in Nigeria.

The sample size for this study is fifty (50) staff of First Bank Nigeria Plc. which we use the Yaro

Yamane’s formula. Two instruments for data collection which is primary and secondary data or

sources were used. The data gathered from the fieldwork will be presented in a tabular form and

in statistical testing of hypothesis, the Chi-square (X2) test of hypothesis was employed in analysis

the data collected.

The result of the analysis indicates that they routinely evaluate the overall effectiveness of your

internal control system. The study also reveals that branch management and its representatives

have complete access to records. Findings show that the responsibility of internal control is that of

the management. Also findings shows that accounting system records all the transactions of the

bank and produce accurate information capable of being relied upon by management and investors.

41
The result of the analysis also indicates that there is statistically significant influence of the control

environment on profit performance of commercial banks in Nigeria. Analysis also shows that there

is statistically significant relationship between information and communication and profit

performance of commercial banks in Nigeria. Finally findings show that there is no relationship

between monitoring and profit performance of commercial banks in Nigeria.

5.2 Conclusion

The following conclusions were made from the investigation carried to evaluate the system of

internal control in Nigerian commercial banks:

a) There are internal control departments in all banks in Nigeria. In most of the banks, the

department is headed by very senior officers not below the rank of Assistant General

Manager.

b) The responsibility of Internal Control is strictly that of the management. The internal control

officer reports to the highest level of management.

c) The presence of Internal Control system in the banks has provided reasonable assurance

regarding the effectiveness and efficiency of operations of banks in Nigeria, the reliability of

financial and management reporting and guarantees compliance with applicable laws and

regulations.

d) The banks rely heavily on the internal control system on the implementation of policies and

procedures.

e) The study revealed that reliance can be placed on the internal control system of banks in

42
 Nigeria.

f) The statistical analysis of the second hypothesis showed clearly that the presence of internal

control system and the effectiveness in the management of banks in Nigeria are perfectly and

positively related.

g) We can conclude further from the study that there exists a high positive correlation between

internal control, profit after tax and deposits.

5.3 Recommendations

The researcher through this study was afforded the opportunity to make the following

recommendation that will enhance the operational adequacy and efficiency of internal control

installed by the two banks and also promotes their profit performance

1. From the analysis of the hypothesis, it was discovered that bonding, vacation and ethical

conduct were the features of good internal control not adequately observed by both banks.

As a result of this fraud is perpetrated. In line with this, the researcher recommend that bank

staff be adequately bonded, mandated to go on annual leave when due and tutored on the

importance of maintaining good rapport and relationship with customers however small or

big.

2. The banks’ personnel departments should endeavor to review their recruitment system;

qualified and honest applicants should be employed, instead of using the Nigerian current

wave in “IM” in offering employment. An in-depth study of the applicants’ past life or

history should be made before appointment or confirmation.

43
3. In EDP department hardware and data storage media should be protected against damage

from fire or any accidental damage.

4. The internal auditor should issue reports of his examination of the banks’ internal control

and if the proper procedures are not followed should alert the management and Board of

Directors of the development.

5. On cash disbursement, persons who sign cheques should be prohibited from having access

to petty cash, recording cash receipts and approving cash disbursement.

6. The salaries department should keep a history record of engagement, retirement or dismissal,

salaries and deduction of each employee.

7. The accounting department function should not be completely divorced of cash

disbursement.

8. The custodian of petty cash should be independent of cashier or other employees handling

remittance from customers and other cash receipts. Finally, the amount of fund should be

restricted so as to require reimbursement at relatively short intervals.

44
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46
 APPENDIX

Ramat Polytechnic, Maiduguri,

Department of Accountancy,
Maiduguri.
5th August, 2023
Dear Respondent,

We are final year students of the department of Accountancy, Ramat Polytechnic, Maiduguri. We

are currently conducting a research on “impact of internal control system on profit performance of

commercial banks in First Bank of Nigeria Plc., Maiduguri Branch.

The research is in partial fulfillment of the requirement for the award of a National Diploma in

Accounting. It should be noted that the research shall be used for academic purpose only.

Thank you in anticipation of your positive response.

Yours Faithfully

Mohammed Ibrahim 2021/ND/ACC/049

Fahad Ali Musa 2021/ND/ACC/101
Usman Umar 2021/ND/ACC/151
Ibrahim Adamu 2021/ND/ACC/204
Mustapha Mohammed Mohammed 2021/ND/ACC/265

47
 QUESTIONNAIRE

SECTION A

This is purely an academic exercise and every information contained, shall be treated as
confidential. So respondents are employed to be truthful and sincere as possible.

1. Sex: Male

[ ], Female [ ]

2. Marital Statius:

Single [ ], Married [ ]

3. Age:

Below 30 [ ], 31 – 40 [ ], 41 – above [ ]

4. Educational Qualification:

H.N.D/B.Sc./B.A. [ ], OND/NCE [ ], SSCE, GCE [ ]

5. Years of Experience:

Below 5 [ ], 5 – 9 years [ ], 10 years and above [ ]

SECTION B

Instruction: Please tick ( ) the correct answers from the options provided below.

1. Do you routinely evaluate the overall effectiveness of your internal control system?

(a) Yes ( ) (b) No ( )

2. Is there effect of control environment on the profit performance of commercial bank in

Nigeria? (a) Yes ( ) (b) No ( )

3. Do the branch management and its representatives have complete access to records?

(a) Yes ( ) (b) No ( )

48
 4. Is there effect of risk assessment on profit performance of commercial banks in Nigeria?
(a) Yes ( ) (b) No ( )

5. Are the systems of internal controls referred to in for above functioning as they are intended
to? (a) Yes ( ) (b) No ( )

6. Does information and communication on financial performance have effect on commercial

banks in Nigeria? (a) Yes ( ) (b) No ( )

7. Do you agree that the responsibility of internal control is that of the management?

(a) Yes ( ) (b) No ( )

8. Are there effects of control activities on the profit performance of commercial banks in

Nigeria? (a) Yes ( ) (b) No ( )

9. Does the accounting system records all the transactions of the bank and produce accurate
information capable of being relied upon by management and investors?

(a) Yes ( ) (b) No ( )

10. Does commercial bank in Nigeria monitors the performance of profit?

(a) Yes ( ) (b) No ( )

49