MJAMR

Relationship Between Internal Control Systems And The Financial Performance Of Selected SMEs In Wakiso District.

Magezi Allan, Dr. Moses Ntirandekura, PhD


Abstract

The study examined the relationship between internal control systems and financial performance of small and medium enterprises (SMEs) in Wakiso District, Uganda. A cross-sectional survey design was employed with a sample of 170 SMEs selected through stratified random sampling. Data were collected using structured questionnaires and analyzed using descriptive statistics, Pearson correlation, and regression analysis. Results revealed that internal control systems had a significant positive relationship with financial performance (r = 0.741, p < 0.01), explaining 54.9% of variance. Specifically, control environment (r = 0.692, p < 0.01), risk assessment (r = 0.658, p < 0.01), control activities (r = 0.671, p < 0.01), and monitoring (r = 0.649, p < 0.01) all demonstrated strong positive relationships with financial performance. The study concluded that effective internal control systems significantly enhanced SME profitability, operational efficiency, and asset protection. Recommendations included strengthening control environments through segregation of duties, implementing systematic risk assessment procedures, enhancing control activities documentation, and establishing continuous monitoring mechanisms to improve SME financial sustainability and competitiveness.

Keywords

Internal control systems financial performance small and medium enterprises control environment Wakiso District
Metropolitan Journal of Academic Multidisciplinary Research

Cite This Article

Magezi Allan, Dr. Moses Ntirandekura & PhD (2026). Relationship Between Internal Control Systems And The Financial Performance Of Selected SMEs In Wakiso District. Metropolitan Journal of Academic Multidisciplinary Research, 5(2). https://journals.miu.ac.ug/pages/article.php?article_id=206

More in This Issue

View full issue →
36
Relationship Between Boda Boda Business And Enrollment Rate Of Boys In Secondary Schools In Rukiga District.
Muhwezi Ambrose1 , Dr. Moses Ntirandekura, PhD2
Boda boda business enrollment rate secondary schools boys' education
37
Relationship Between Cash Flow Management And Profitability Of Small And Medium Enterprises (Smes) In Butiiti Sub-County, Kyenjojo District, Uganda.
Rujumba Ezekiel
Cash flow management profitability small and medium enterprises financial performance
38
Relationship Between Collaboration And Service Delivery In Bundibugyo Local Government, Bundibugyo District.
Guma Kandole Nicholas1 , Wabuna Muhammad (PhD)2
Collaboration service delivery stakeholder engagement partnerships
39
Relationship Between Community Participation And Performance Outcomes At Selected Health Centres In Kayunga District
Kusaasira Racheal1 , Kamugisha Nelson2
Community participation health centre performance service delivery Kayunga District
40
Relationship Between Computerized Accounting And Financial Reporting In Business. A Case Study Of Stanb1c Bank Mukono Branch
Muganzi Emmanuel Prosper1 , Irumba Alex2
Computerized accounting financial reporting automation banking sector