INTRODUCTION
As a result of persistent poor performance in most organizations, the study investigated the effect of internal control systems on the performance of banks in Nigeria. Internal controls were looked at from the perspective of control environment, internal audit and control activities whereas bank performance focused on liquidity, accountability and reporting as the measures for improvement. The study also went further to establish that effective and efficient internal control system is the best control measure for preventing and detecting fraud in organizations, especially in the banking sector. Data were collected using questionnaire and interview guide as well as review of available documents and records. The data gathered for this study, were analyzed through descriptive and inferential statistical methods. The descriptive analysis involved the use of percentages and tabulation while the inferential statistical method involved the use of the chi-square. The study therefore discovered that management of the bank is committed to the control systems as well as actively participates in monitoring and implementing the system. It also noted that all the strategic decisions of the banks are initiated by the top level management while the internal audit department conducts regular audit activities and produces audit reports on how to improve the system. The study concludes that there is a significant positive relationship between internal control systems and organizational performance. It therefore recommends that banks should ensure there is adequate and functional internal control system; establish competent internal audit department, train staff regularly and pay staff attractive salaries.
