The relationship between internal control system and business survival in the COVID-19 pandemic era

International Journal of Research and Innovation in Social Science (IJRISS) | Volume VI, Issue I, January 2022 | ISSN 2454–6186

The relationship between internal control system and business survival in the COVID-19 pandemic era

ALASHE, Abdulganiyy Kayode (MSc, MBA, FCA, FCTI)¹
ADEFOLURIN, Festus Adesegun (MSc, MBA, FCA, FCTI)²
BELLO, Abass Oyeshola (MSc, FCPSP, ACA)^3
1,2,3Department of Accountancy, School of Management and Business Studies, Lagos State Polytechnic, Ikorodu, Lagos State

Abstract
The necessity for survival has grown increasingly prominent as an overriding goal of every corporate organization in this COVID-19 pandemic period. The purpose of this paper was to investigate the relationship between internal control systems and business survival in the face of the current pandemic. A descriptive survey research design was used for the investigation. Primary data were obtained from a sample of 382 SMEs’ owners chosen at random from a population of 8,395 registered SMEs in Lagos State using a simple random sampling technique. The data gathering instrument was a five-item Likert scale questionnaire. Two hundred and thirty copies of the scale were returned and used in the study, representing a 60.20 percent survey response rate. Pearson correlation was used to test the hypotheses. The study’s findings revealed a positive relationship between internal control systems and business survival in the pandemic era. It was determined that internal control systems were a successful instrument for organizational control and commercial survival during the pandemic era. Accordingly, the study recommended that business owners should ensure that a vibrant internal control system is put in place to aid management in effective control of the organization especially in pandemic era to ensure business survival.

Keywords: Business survival, COVID-19, internal control system, pandemic era.

1.1 Introduction

The Corona Virus Disease 2019 (COVID-19) has caused widespread devastation around the world (Bartik, Bertrand, Cullen, Glaeser, Luca & Stanton, 2020; Fairlie, 2020a). The epidemic, with its associated uncertainty and disruption of human and economic activities in all countries throughout the world, has profoundly affected human activities, resulting in a global decrease in commercial and economic activity (Fairlie, 2020b). This position has proven extremely difficult for enterprises, particularly those operating Small and Medium-sized Enterprises (SMEs), which have long been regarded as the foundation of any economy (Bartik et al., 2020).
SMEs in Sub-Saharan Africa (SSA) are struggling to survive due to depleting resources and the continent’s government’s inability to appropriately support SMEs’ activities. In Nigeria, the situation is no different. In addition to a number of operational obstacles in the Nigerian environment, the COVID-19 pandemic has exacerbated the survival challenge of SMEs in Nigeria. As a result, Nigerian SMEs are confronting new existential challenges. Among these obstacles are the pressures on profitability caused by increased production and operating costs, financial, infrastructural, political, and a variety of ethical issues, including internal control flaws. Businesses, particularly SMEs, would face survival issues as a result of the challenges. Perhaps an effective internal control system could be useful in mitigating these issues.

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