Impact of Information and Communication Technology on Internal Control and Risk Management

Abstract

Despite the increasing adoption of Information and Communication Technology (ICT) in organizational operations, many organizations in Nigeria continue to experience weaknesses in internal control and risk management systems. Challenges such as inadequate fraud detection, poor compliance monitoring, ineffective financial reporting, and limited technological competence among employees have exposed organizations to operational and financial risks. These persistent issues underscore the need to examine the role of ICT as a tool for strengthening internal control mechanisms.This study therefore investigates the influence of Information and Communication Technology on internal control and risk management systems in organizations operating in Oyo State, Nigeria. The study covers small and medium-sized enterprises (SMEs) and large organizations, including hotels, manufacturing companies, finance companies, and accounting firms. The population of the study comprises 100 firms across these sectors. A stratified random sampling technique was employed to select 100 staff members from the sampled organizations. Primary data were collected through structured questionnaires and analyzed using descriptive statistics and the Chi-square test of independence. The study examined key components of internal control such as financial reporting, risk management, fraud detection, compliance monitoring, and overall operational controls. The findings reveal that ICT adoption significantly enhances the effectiveness of internal control systems by improving transparency, safeguarding assets, strengthening compliance, and mitigating organizational risks. The study recommends continuous investment in ICT infrastructure and targeted employee training to develop relevant technological skills, thereby enabling organizations to maximize the benefits of ICT in internal control and risk management.