IMPORTANCE OF INTERNAL CONTROL AND ENTERPRISE RISK MANAGEMENT IN NIGERIAN COMPANIES

Abstract

Effective Internal control and efficient enterprise risk management are very important concepts towards
achieving proper corporate governance in any organization. A sound corporate governance structure
for companies can act as an engine of economic growth as it leads to investor confidence in different
sectors of the economy. To this end, different legislation have over the years been introduced in Nigeria
by different regulators to ensure that these two concepts are properly executed in Nigerian Companies.
This paper evaluates the importance of these concepts and how they can contribute to economic
development in Nigeria. The paper examined the effects of poor internal control and enterprise risk
management have had on companies in Nigeria over the years and how this highlights the importance
of these concepts. The paper relied on the doctrinal legal research methodology by analysing both
primary and secondary sources of law. The paper found that many of the corporate failures in Nigeria
can be attributed directly to a failure in corporate governance especially a failure by companies to
implement and maintain effective internal control systems and efficient risk management practices. The
paper concludes that effective and efficient internal control and effective risk management can act as a
way of mitigating future corporate failures and recommends that this can be achieved by greater
accountability of management and the board, better enforcement of existing legislation by regulators
and improvement in existing legislation to better cater for the complexities of the two concepts.