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As a result of the tendency of business organization to increase in size, scope and complexity, it is difficult for managers of such organization to directly supervise all the units and hence direct activities towards achievement of the organizational goals. The management, therefore establish procedures, rule and regulations, known as management control or internal control for the purpose of safeguarding assets and maintenance of accruable and reliable records in the organizations, internal control is designed to assist management and monitor the activities to ensure that other control are adequate in design and effective in operations. The incidence of poor performance by government owned establishment attributable to various irregularities has been on increase in spite of internal control established by management the Nigeria coal corporation is a Federal government owned establishment institute to help to increase the in- economic status of the country. The researcher investigated how internal audit function as an instrument for effective control in Nigeria coal corporation, Enugu. The sets of hypotheses were formulated as guide for researcher work. Literature review was then undertaken to discover the opinion of others on the subject of research. The primary data gathered were analyzed and interpreted while the chi-square (x2) was used to test the validity of the hypothesis is which confirmed that internal and it is useful instrument for effective management control. The researcher discovered that internal audit is actively functional in Nigeria Coal Corporation. However exists some internal control lapses for which the researcher has made some necessary recommendation for improvement so that internal audit will always live up to its reputation as watch dog in the organization.

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