INTERNAL CONTROL SYSTEM AND BANK FRAUD PREVENTION IN NIGERIA BANKING INDUSTRY
Need help with a related project topic or New topic? Send Us Your Topic
DOWNLOAD THE COMPLETE PROJECT MATERIAL
INTERNAL CONTROL SYSTEM AND BANK FRAUD PREVENTION IN NIGERIA BANKING INDUSTRY
ABSTRACT
This research is primarily concerned with internal control systems and bank fraud prevention in the Nigerian banking industry. Internal control is very important in the Nigerian banking business.
Internal controls are policies, procedures, and practises implemented on an organisational structure to provide reasonable assurance that the organization’s business objectives will be met and that undesirable risk events will be prevented, detected, and corrected based on compliance or management-initiated concerns.
In order to collect data, the researcher employs survey design, which includes the use of questionnaires, personal interviews, and observation. Hypotheses were developed and tested using the chi-square test at the 5% level of significance.
The findings demonstrated that a bank with an internal control system may avoid fraud, and a good internal control system has a substantial influence on fraud detection and control.
The report indicates that a lack of adequate internal control measures is a major cause of fraud in various institutions and suggests that banks in Nigeria seek and effective internal control systems to combat fraud, among other things.
INTRODUCTION
BACKGROUND OF THE STUDY
Internal control, the strength of any organisation, has become critical in Nigerian banks today, because the control system in any organisation is a cornerstone for an efficient accounting system.
The importance of internal control systems in organisations, particularly banks, cannot be overstated, given that the banking sector,
which plays a critical role in a country’s economic development, is currently characterised by macroeconomic instability, slow growth in real economic activities, corruption, and the risk of fraud.
Fraud, which is the primary reason for establishing an internal control system, has become a major source of concern for many Nigerians.
It has also become an unwelcome fixture in Nigeria’s worldwide reputation. Fraud is infiltrating the Nigerian banking sector, and any bank with a weak internal control system is at risk of bank fraud.
In a nutshell, the harm done to banks by this scourge known as “fraud” is immense and requires immediate treatment.
As a result, the topic of this research study internal control system and bank fraud prevention in Nigeria banking industry with Union Bank Plc as a case study arose as an attempt to put an end to this economic degradation.
This study, on the other hand, seeks to validate the notion that an effective and efficient internal control system is the best control measure for preventing and detecting fraud, particularly in the banking sector.
STATEMENT OF THE PROBLEM
Given the effects of fraud and fraudulent acts mentioned in the introduction, the problem of this study is to effectively comb for and reduce the prevalence of fraud.
However, they have not been able to totally eliminate bank fraud. As a result, this research was carried out to assist banks in looking for ways to avoid bank fraud in order to achieve the goal, and this research effort will be directed by questions.
RESEARCH QUESTIONS
In order to meet the study’s goal, the following questions must be answered:
Is a lack of good internal control a main source of bank fraud?
Do banks with internal control systems in Nigeria reduce the threat of fraud?
What motivates bank employees to commit fraud?
How efficient are fraud prevention measures in Nigerian banks?
OBJECTIVES OF THE RESEARCH
This study’s main goal is to accomplish the following:
To establish whether a lack of adequate internal controls is a major source of fraud in a bank.
To determine if banks with internal control systems reduce the risk of fraud in Nigeria.
To determine whether or not bank employees commit fraud.
To determine the effectiveness of fraud control measures in Nigerian banks.
RESEARCH HYPOTHESES
The First Hypothesis
HO: A lack of effective internal controls is not a major source of fraud in banks.
HI: A major cause of fraud in Nigeria is a lack of effective internal controls.
Hypothesis No. 2
HO: Internal control systems at Nigerian banks cannot prevent the threat of fraud.
HI: Internal control systems in banks can help to prevent fraud in Nigeria.
SIGNIFICANCE OF THE RESEARCH
In terms of the system of preparation and execution, fraud is unusual in my experience.
Knowledge of the many ways in which fraud has been propagated in the past, as well as a foresight or anticipation system that takes the past into account,
can assist an acceptable internal control design that can be efficient and successful in guiding management in the prevention and recurrence of fraud.
If it is acknowledged that the bank bears the majority of the risk of fraud, then banks should pursue strong internal control procedures to avoid fraud.
The research activity is thus intended to assist in becoming acquainted with various frauds and their methods of execution in order to gather sufficient knowledge to enrich individuals’ and collective expertise in fraud management and prevention.
SCOPE OF THE STUDY
This study investigates the nature and prevention of bank fraud in the Nigerian banking system, with the goal of determining how good internal controls relate to the prevention of bank fraud in the Nigerian banking system.
The study is focused solely on the Nigerian banking sector, with a particular emphasis on Auchi. The research effort spans five years (2009-2013), with a sample size of 75.
LIMITATIONS
In truth, bank fraud is a very delicate issue; bankers rarely agree to share incidences of fraud in their bank since it may terrify their customers, and their competitors may capitalise on that.
However, personal observation and experience as a long-time practising banker have also been used in the study effort, particularly in the area of information scanning, although these observations and experience were not originally reported.
DEFINITION OF TERMS
The following are definitions of terminology used in authoring the project that the study believes you may not be familiar with.
Fraud is defined as an act or cause of deception committed with the intent of gaining an unlawful and unfair advantage at the expense of another person or group of people.
Fraudulent: Deceptive, a person who commits fraud.
Internal auditing refers to an independent assessment unit within an organisation that reviews operations and provides management with service in a managerial control by measuring and evaluating the effectiveness of others.
Need help with a related project topic or New topic? Send Us Your Topic