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Sunny O. Temile
Lucky Izobo Enakirerhi
Ighosewe Enaibre Felix
Dadang Prasetyo Jatmiko


Credit Risk, Liquidity Risk, Risk Management, Internal Controls


Purpose: This study empirically observed the relationship between risk management and the internal control system of the banks in Nigeria.

Methodology: In order to achieve the main objective of this paper, we made use of data from the annual reports of fifteen commercial banks, covering a period of ten years (2007 – 2016). The study is empirical in nature and adopted a cross-sectional research design. Furthermore, the Panel Data Regression estimation technique was employed to estimate the specified model of the study.

Result: The results revealed the existence of a negative and significant relationship between credit risk and internal control. Liquidity risk which was measured using liquidity ratio has a positive and statistically significant relationship with internal control of banks in Nigeria. Based on the findings, the importance of strong and vibrant internal control policies across banks in Nigeria cannot be over-emphasized. This is because the more the internal control put in place, the greater the liquidity for banks to carry out their banking operations. On the other hand, the greater the internal control, the lesser the credit risk.

Applications: This research can be used for the universities, teachers, and students.

Novelty/Originality: Due to the recurring financial distress and eventual liquidation of some banks in Nigeria, this study is very necessary as it stresses the relevance and needs for effective internal control strategies in line with global best practices.


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