Abstract:

This study examined the relationship between internal control system and profitability of strategic business units (SBUs) of selected private universities in Ogun State, Nigeria. Five private universities were selected for the study by simple random sampling via random numbers generated by excel application package. Three SBUs of interest in this study are cafeterias, supermarkets and halls of residence. Survey research design was adopted and Copies of questionnaire were administered on two groups of respondents; the consumers (students and staff) and the top management staff in maintenance, account and audit units. Data obtained were subjected to descriptive and inferential statistical analyses using SPSS version 20. Mann Whitney U test was employed to examine the difference between the responses of the groups in respect of internal control effectiveness of the SBUs. Canonical Correlation was used to test the association between internal control effectiveness and profitability of the SBUs. Results indicate that there is significant difference between group responses on internal control effectiveness of the SBUs. Results also reveal that there is strong correlation between internal control effectiveness and profitability of the SBUs. The study recommends strengthening of internal controls in each SBU in order to optimize its profitability.