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1. Introduction
The significance of upholding effective internal control system in organizations have been persistently and immensely emphasized, due to its positive effects on financial performance (Eniola and Akinselure, 2016; Ibrahim et al., 2017). Internal control mechanisms refer to all the policies and procedures adopted by the directors and management of an entity to assist the organization in achieving its objectives. These mechanisms ensure the orderly and efficient conduct of business, including adherence to internal policies; the safeguarding of assets; the prevention and detection of fraud and error; the accuracy and completeness of the accounting records; and the timely preparation of reliable financial information (Tetteh et al., 2022).
Simon (2021) argues that efficient internal controls create an organization's confidence in its ability to perform or undertake a particular task and prevent errors and losses through monitoring and enhancing organizational and financial reporting processes. However, the effectiveness and efficiency of the internal control mechanisms significantly depend on the competence of policymakers and those charged with governance hence cannot be underemphasized. The objective of corporate governance is to maintain the balance of interests between corporate investors and stakeholders in a firm. It spells out the “rules of the game” through providing systems for the efficient and effective conduct of business (Musah et al., 2022). It incorporates the ethical values of the organization; their structural integrity and a framework to reduce agency conflicts, increase investor confidence and firm goodwill and increase shareholders' wealth and investment opportunities (Ngatno et al., 2021; Chalmers et al., 2019). Corporate governance, from this perspective, plays a crucial moderating role in the relationship between internal control mechanisms and the overall organizational performance (financial and non-financial) through the introduction of good corporate governance practices that strengthens the internal control mechanisms (Musah et al., 2022).
Some studies examining the impact of corporate governance on financial performance of organizations reveal that such an impact is insignificant (see Al-ahdal et al., 2020). These findings were contradicted by other studies which posit that there is a significant relationship between corporate governance and organizational financial performance (see Musah et al., 2022; Padi and Musah, 2022; Singh et al., 2018; Bhatt and Bhatt, 2017; Iqbal et al., 2019) leaving literature with...