ABSTARCT: This research work was on the internal control system as a means of preventing fraud in Nigerian Financial Institutions. However for a more detailed study a case study was carried on First Bank Plc Onitsha Head Office. The bank understudy was selected by simple random sampling.This study was necessitated because of the Increasing wave of Bank fraud in Nigerian in recent times as reported by the Nigerian dailies. Therefore the need to investigate these reports and if confirmed, a financial institution and to what extent the application of an effective internal control system can go to help matters. All aspects of this work is very relevant in one way or the other to the Nigeria Banking Industry, as a whole, and for those who may be interested in carrying out further study in this topic.The research design is the survey approach that is the cross sectional survey type of descriptive research which requires the selection of respondents from a population. The population of the study is made up of the Senior Officer of the Bank under study who has worked in the Bank for more than five years. In determining the sample size Bowleys formulars on sampling was used while the allocation of questionnaires to the bank was done randomly. Also data were collected through primary and secondary sources, the primary sources of data are mainly through personal interviews and distribution of questionnaires while the secondary source include Books, Journals, Newspapers and Magazines.The method of statically analysis includes the use tables, percentage analysis and logical deductions while the significant tests of two means was used in testing the hypothesis. From my finding, it was ascertained that Banks have the best internal control system in Nigeria. The internal control system is both adequate and effective, although more operative improvement and reviews is vital. The Management of Bank should be at alert so as to close any loophole that may arise in their internal control system. Also it was discovered that the major cause of fraud is the employment of dishonest staff. The fore staff qualities like integrity should be ascertained before employment. There should be an increased enlightments on the legal implications of fraud among other.
PROPOSAL: This Project is on the Internal Control System as a means of preventing fraud in Nigeria Financial Institutions with special reference to First Bank Plc Onitsha Head Office.This study is necessary because of the increasing wave of Bank fraud in Nigeria in recent time as reported by the Nigerian dialers. Therefore the need to investigate these reports and if confirmed, a Financial Institution and to what extend the application of an effective Internal control system can go to help matters.The research method which is going to be use will be descriptive research which requires the selection of respondents from a population. In determining the sample size, I will use Bowleys formular while the allocation of questionnaire as to the will done randomly. By the end of this my study, the management of the Bank should be at alert so as to close any loophole that may arise in their internal control system and know that, the major causes of fraud is the employment of dishonest staff. Therefore, staff qualities like integrity should be ascertained before employment. There should also be an increased enlightments on the legal implications of fraud among others.
CHAPTER I
CHAPTER II
2.1 Definition of Fraud
CHAPTER III
3.1 Methods of data Collection
CHAPTER IV
CHAPTER V
5.1 Discussion of Findings
Appendix
1.1 BACKGROUND OF THE STUDY
It is feared that the inability of management to ensure effective enforcement of rules and regulation have rendered that operations of Internal control system as the Banking Industry Open to abuse. The net effect could be that everyone carries out his schedule off duties in any manner he likes which consequently gives those wishing to commit fraud their long expected golden Opportunity.
Prior to 1952, there was no form of Banking art or ordinance to regulate the establishment and operations of Commercial Banks or a Central Banks to supervise the control of Banking Nigerian. During that time many Banks was registered some of which never operated and ever since that period, fraud has remained a permanent feature in our Banking Industry. This resulted in a loss of faith and trust in the financial Institutions by Nigerians and consequently, under-development of the banking habit in the country.
However with the Introduction of the first baking Ordinance in 1952, and the Central Bank of Nigeria (CBN) Act in 1959 and other, subsequent Acts and ordinances with their amendments over the years, used to regulate and control the activities and operations of financial Institutions in the country fraud in financial Institution have rather increased in magnitude and the methods used to perpetrate them acquire grater sophistication day after day. Now with the introduction of modern procedures and advancement in information technology such as those in communication system, automatic electronic gadgets and computers into the banking system coupled with the various precautionary measures taken by bank agent, fraud have rather taken nuclear dimensions and the size of sums involved increased at a geometric rate Anikpitan (1976), a banker of repute, maintained.
That; discoveries during investment show that
banks now take extra precaution fore clearing a
cheque because of rampant incident of fraud and
forgery which a bank boss placed on the average of
N1m per working day of the year in Nigeria. I Ashimi
(1976, P.6) maintained that; Fraud has become
sophisticated as to make a forged signature on a
cheque leaf look good enough for the rightful Owner
to think that it was his signature.
But a situation, as is being experienced now, where incessant cause of bank fraud are being reported, could, if not immediately checked, erode depositors confidence in the nation’s baking system. Such a situation could also scare fore investors from the country. Ughamadu N. in his article on celebrating bank Fraud “In the business Times 29 July, 1991, observed that;
The logic for establishing a viable and enabling
environment for any country will be meaningless if
its banking sector is very porous to fraud.
The nature of the business of the banking industry requires a proper measure to be taken to evade fraud. This is because they are entrusted with public funds. Ojo, A.T (1982) emphasized that;
As an open secret, financial Institutions do not have very large resources of their own in relation to the total resources at their disposal. They depend in the main, on other peoples funds which have been entrusted to them because of the confidence the people have on them as models of responsibility and safety. 4
Consequently, the confirmed existence of financial Institutions rests delicately on the maintains of public confidence. This calls for the establishment of an effective system of internal control, which among other things will help to ensure that the organization’s accounting are in accordance with the laid down procedures standard and statutory requirements.
] to establish a sound internal control system, various organisation adopt various devices and methods based on their nature of business and the scope of their operations. Internal control system requires a continuos check and rechecking of day-to-day activities of the business in order to ensure the correctness and fairness of the accounting records; and to detect and expose any deviation when it has accord. Most financial Institutions loose confidence of the people not only through fraudulent use of funds but also through some detect in fraudulent practices and or syndication of some dishonest staff facilitated by defects in the Banks Internal Control System. There is, therefore a great need to climinate or minimize the defects or loopholes and make money effective and operational to guard against the occurrence and re-occurrence of fraud in our financial institutions.
1.2 AN OVERVIEW OF FIRST BANK PLC
First Bank of Nigeria Plc was incorporated on 31st March 1894 as a limited liability coy with an authorised share capital of 2 stilling the, but today it has been registered at the company’s house for 110 years. The establishment First Bank of Nigeria Plc predates the birth the Nigeria nation as a sovereign entity. The Bank, which was registered as Bank of British West Africa in 1894, has therefore evolved along the path of political, social and economic changes and development of Nigeria from the colonial period to independence and the experience of post independence. It thus shared in the process of its growth, the final experiences of the nation which in retrospect were sources of strength.
First Bank of Nigeria Plc is engaged in commercial Banking Business. The Banks head office is located in Lagos. It is the policy of the Board of Directors that the bank should play an important role in the commercial banking industry in Nigeria. Accordingly the bank is committed to the expansion of its branch network with a view of eventually making its services available through the country. The increase in the number of branches will improve the deposit base of the bank and thus enable it to fund more projects in different parts of the country, thereby contributing towards the nations economic growth. For now the bank has branches all over the country and overseas.
The bank embarked on a computerization project in order to enhance the delivery of its services.
All the branches of the bank and head office departments are now computerized. The bank is committed to successful restricting and development of the nations economy as its rural objective. Towards this end, the bank is interested in assisting small-scale industries, farmers, co-operative societies and community development efforts.
The service include, saving account, current account, standing orders and direct debit, current services, fixed deposits, loans, and advances, corporate finance international operations, these services are being carried out by the efficient human resources of the bank which made up to both senior and junior cadres.
1.3 STATEMENT OF THE PROBLEM
In our daily newspapers thee are reports of fraud in financial institutions. For instance, Business concord (January 27 1990) noted with ulter dismay that “Robbers are making nonsense of the various types of security measures in banks by employing scientific means of gaining access to their strong rooms. Another contribution in the Business Times (23rd January 1990) commented that “the rising incidence of bank fraud has created a lot of distrust between banks and their customers”. Not only that there are increase numbers of reported cases of fraud but also the sums involved are staggering.
The methods used is perpetrating fraud is recent times are acquiring nuclear sophistication day after day. While the bank management are busy devising new methods of checking fraud, the fraudulent staff are busy devising new methods of defrauding the bank. It is obvious here that the results of these incidence are damaging. Fraud leads to unwanted loss of public fund and put the management of the affected bank on its toes.
Every incidence of bank fraud reduces public confidence in
| 1 - 5 of 96 Reviews |