Internal Control Practices and Financial Performance of Small and Medium-Sized Enterprises at Cape Coast Metropolis

Dorcas Akosua Bawa Desbordes; Osman Light; Patricia Otabil

doi:10.36948/ijfmr.2026.v08i02.73939

Internal Control Practices and Financial Performance of Small and Medium-Sized Enterprises at Cape Coast Metropolis

Author(s)	Ms. Dorcas Akosua Bawa Desbordes, Mr. Osman Light, Ms. Patricia Otabil
Country	Ghana
Abstract	Abstract This paper explores the influence of internal control practices on the financial performance of Small and Medium-sized Enterprises (SMEs) in Ghana, with a particular focus on those within the Cape Coast metropolis. It specifically examines how control activity, internal audits, risk audits, and control environments affect SMEs’ financial performance using a quantitative approach and explanatory research design. Agency theory supported the study, and primary data were gathered via structured questionnaires from 200 sampled owner-managers of SMEs in Cape Coast. Data processing was then carried out using IBM SPSS (v.26) and Smart-PLS3 software and analyzed via PLS-SEM. The findings showed that all four internal control practices favorably affected SMEs’ financial performance in Cape Coast. Therefore, we conclude that internal audit, risk audit, control activity, and control environment are significant predictors of SMEs’ financial performance in the metropolis. It was recommended that policymakers, including owner-managers, should continue to implement and strengthen internal control practices to expand SMEs’ financial performance.
Keywords	Keywords: Internal control practices, Control activities, Control environment, Internal audit, Risk audit, and Financial performance
Field	Business Administration
Published In	Volume 8, Issue 2, March-April 2026
Published On	2026-04-12
DOI	https://doi.org/10.36948/ijfmr.2026.v08i02.73939

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Internal Control Practices and Financial Performance of Small and Medium-Sized Enterprises at Cape Coast Metropolis

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