INTERNAL CONTROLS AND ACCOUNTING INFORMATION SYSTEMS OF SELECTED SMALL AND MEDIUM-SCALE ENTERPRISES IN LAGOS, NIGERIA
Keywords:
Accounting Information system, Control Environment, Information and Communication System, Internal Control Risk AssessmentAbstract
The study focused on the impact of internal controls of Small and medium enterprises in Lagos state on its Accounting Information system. Specifically, the study examined the effect of Control Environment on the accounting information system of small and medium scale enterprise in Lagos State, ascertained how Risk Assessment affects the accounting information system of small and medium scale enterprise in Lagos State, and determined the effect of Information and Communication System on the accounting information system of small and medium scale enterprise in Lagos State. Using the survey research design, the study sampled 350 CEOs, Managers of SMEs and internal control Specialist in Lagos State. Using the Ordinary least square statistical technique, the study found out that control environment has a significant and positive impact on Accounting Information System (p-value 0.0000; coefficient 3.1976). It was discovered that risk assessment have a significant and positive impact on Accounting Information System (p-value 0.0000; coefficient 56.8588). The study also revealed that that Information and Communication System does not have a statistically discernible impact on Accounting Information System (p-value 0.6661; coefficient 1.0407) within the sample period. The study therefore concludes that the control environment, risk assessment, and control activities significantly enhance the effectiveness of the accounting information system in SMEs, while the information and communication system does not have a statistically significant impact. Based on these findings, it was recommended that SMEs strengthen their control environment by enforcing ethical leadership, regulatory compliance, and organizational discipline. Additionally, businesses should enhance risk assessment strategies to mitigate financial uncertainties and improve decision-making. Control activities should be rigorously implemented to ensure data accuracy and fraud prevention.
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