APPRAISAL OF THE INTERNAL CONTROL SYSTEM IN COMMERCIAL BANKS IN NIGERIA
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APPRAISAL OF THE INTERNAL CONTROL SYSTEM IN COMMERCIAL BANKS IN NIGERIA
ABSTRACT
An evaluation of the internal control system in Nigerian commercial banks drew the researcher in to analyse the study’s strengths and weaknesses. After considering everything, the researcher decided that the commercial bank’s internal control system is solid in theory and successful in practise.
CHAPTER ONE: AN EVALUATION OF THE INTERNAL CONTROL SYSTEM IN NIGERIAN COMMERCIAL BANKS
1.1 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Prior to the arrival of the Arras and Portuguese, trade in Nigeria was conducted solely through barter. However, when those trades arrived in 1870, a mixed barter money economy was introduced. During this period, commercial and economic activities among Africans were barters,
whereas such activities between Africans and Arras Portuguese were commodity money or the other. Such commodity mouse used include items such as coral breads, cowries, brass and copper, rods, bottles cases of gins, livestock, and even slaves, who by then, served more as beasts of burden.
The Portuguese, who are credited with being the first Europeans to reach the west African coast, popularised the use of cowries as a monetary instrument in their trading efforts in the Ancient Kingdom of Benin. Following that, the Portuguese monopolised trading activities along the west African coast, including Nigeria.
Only a few years after their arrival, the British traders overcame the Portuguese traders and established a monopoly over all commercial and economic activity in four separate West African nations, namely the Gold Coast (now Ghana), Gambia, Sierra Leone, and Nigeria.
It wasn’t long before it was revealed that those British traders had come not simply to trade, but also to govern. This, however, resulted in colonial (Administration striation.
Following the establishment of a British colonial administration in those countries, the usage of currency, namely British Sylva coins, was extensively encouraged.
This, however, was the first step in the process of monetising those economics that, while facilitating trading, strongly discouraged barter.
Nigeria’s banking concept stretches back to the early time of colonial governance. The British traders day banking in Nigeria were primarily concerned with the correct execution and transportation of cash in order to effectively serve the British colonial authority and their corporation.
1.2 STATEMENT OF THE PROBLEM
Most businesses’ primary goals are to serve and grow: Satisfactory profit and fulfilment of social obligation A solid and effective central system is developed in order to conduct the businesses’ business efficiently and orderly, and assets in sina guenon (essential) to the attainment of the above goal.
A strong internal control system also aids in ensuring the accuracy and reliability of records, the free flow of management information, and adherence to management policies in order to prevent possible waste, pilferage losses, and theft.
1.3 OBJECTIVES OF THE STUDY
The study’s goal is to investigate the internal control system as it is constructed and operated in Nigeria’s banking industry. To that end, we will shell:
1. Investigate Nigeria’s commercial banking internal control system in terms of loan, advance investment, and deposit.
2. Determine the extent to which policies are being followed.
3. Examine critically why there is a consistent increase in banks’ bad debts.
4. Make recommendations based on the findings from the preceding objective.
1.4 SIGNIFICANCE OF THE STUDY
Control is exercised at all levels in the commercial banking industry, from the area officer to credit control and then the inspection departments. Because this elaborate system of control is required in the area of loans and advances,
it is imperative that adequate internal control measures such as lending limits of managers, inspection and Constance review of overdrawn accounts be placed on loans and advances if the bank is to fully realise its earning and avoid hiatus.
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