APPRAISAL OF FRAUD CONTROL TECHNIQUES IN NIGERIA COMMERCIAL BANKS

(Accounting)

APPRAISAL OF FRAUD CONTROL TECHNIQUES IN NIGERIA COMMERCIAL BANKS

(A CASE STUDY OF FIRST BANK NIGERIA PLC)

ABSTRACT

Fraud is the number one enemy of the business world. No company is Immune to it. No where is fraud caused that banking, it is the biggest single causes of bank failure.

However, the intent of this research is to evaluate  the fraud control techniques in first bank of Nigeria. As the technique is aimed at controlling the cause and effect of fraud. Two Bradlees of first bank were used for the study. The first bank were used for the study.  The choice of first bank as a case study is based on the understanding that most banks in Nigeria have simple strength and weakness.

Also in pursuit of the above foal, two types of questionnaire were administered, one to the top management of the bank, and the other to the middle and low management staffs. Some customers were interviewed orally to obtain additional information and also to confirm the result obtained through the questionnaire.

Therefore, from the analysis and interpretation for the data, it is observed that fraud control techniques in is by commercial banks in Nigeria are not efficient and effective.

Different type of fraud still exist.        

 

 TABLE OF CONTENT

INTRODUCTION

1.1      BACKGROUND OF THE STUDY 

1.2      STATEMENT OF THE PROBLEM

1.3      OBJECTIVE OF THE STUDY

1.4      RESEARCH QUESTIONS

1.5      RESEARCH HYPOTHESIS

1.6      SIGNIFICANCE OF THE STUDY  

1.7      SCOPE AND LIMITATION OF THE STUDY     

1.8      ISTORICAL DEVELOPMENT  

1.9      DEFINITION OF TERMS

1.10  REFERENCES

CHAPTER TWO:

2.0 REVIEW OF RELATED LITERATURE

2.1  Definition of FRAUD

2.1.1       Causes of Fraud  

2.1.2       Impact of Fraud in New Technology

2.3         Effects of Fraud

2.1.5       Control of Fraud

2.2  Recent Trend and Developments in Fraud

       REFERENCES

CHAPTER THREE

3.0      Research Methodology

4.0      3.1  Research Design

5.0      3.2  Area of Study  

6.0      3.3  Population of the Study

7.0      3.4  Sources Of Data

8.0      3.5  Sampling Method

3.5.1 Sampling Size Determination

3.4 Methods Of Data Analysis

3.6 Research Instrumentation

3.7 Validity and Reliability Of Research Instrument

3.8 Method of Investigation

       REFERENCES.

       CHAPTER FOUR

9.0      Presentation and Analysis Of Data

4.1 Re- Statement of The Problems    

4.2         Major Findings

4.3        Overall Distribution Of Questionnaire And Analysis Of Responses  In The Branch  Bank

4.4 Presentation And Analysis Of Data From Oral    Interview

4.5       Test of Hypothesis

4.6         Research Question Answered

 

CHAPTER FIVE

 

5.0  Summary Of Findings / Conclusion And Recommendations

5.1  Discussion Of Findings

5.2  Conclusion  

5.3  Recommendation

       References.      

Bibliography

Appendix A

Questionnaire  

CHAPTER ONE

INTRODUCTION

The bulk of funs required by the investing sector of most developed or developing business economic of the world is provided by the banking Industry.

Commercial banks as a case study of this research work provides service like acceptance of deposits, safe keeping of valuables, offering of pieces of advice like on investment credit creation and other business published in the gazette by the governor of central bank  designated to mean commercial banking business.

The word fraud is a complex Universal phenomenon, it is rampant in both developed and developing countries and varies across time and placed in its magnitude, its effects on administrative, performance and development, political economical, social cultural and attitudinal factors combine in contributive and the extend beyond the boundaries of nation state.

Fraud is matter of individual choice and opportunity, being human, one is reasonably connived he can get always with fraud.  

 

1.2       BACK GROUND OF THE STUDY

In the history of Nigerian banking, if 200 banks were registered by the financial secretary tot he colonial administration to carry out banking business, from the year 1892 – 1952 was know as the era of free for all banking.  Between this period banking business blossomed, there way high expectations that trend will continue to improve as a matter of  time.

 Apart from that, frauds cut across all sectors of the economy and that the size of an enterprise usually determines the volume of fraud perpetrated.  We are also aware of manpower and manpower training poor internal control system, inadequate incentive and unsuitable legal framework for dealing with offenders, playing the perpetration of frauds.

In addition to these, the lack of commitment on the part of staff and the employment policies of some banks tend to make frauds and forgeries attractive.

Now we are considering the higher rate of fraud in banks as clearly unacceptable, some thing Adriatic ought to be done so urgently.

 We therefore urge executive and to management of banks to as a matter of  Urgency to adopt strategies that will block all loopholes that encourage frauds in their organization.

In specific terms, we counsel that banks should critically examine options for prevention and timely detection of  frauds and forgeries as these are likely to scare would be perpetrator’s adequate internal control such as re-deployment of staff and short interval without notice should be put in place.  Staff should be kept abreast of sophisticated and other developments through which training continuous.

Banks staff should be adequately remunerated and novitiates to give their best while waiting with satisfaction.  Poorly remuneration in a banking environment may constitute a menace to the system as temptations are likely to be quilted and the urge to a succumb becomes irresistible.

I believe that computerization can go a long way as a strategy for internal control in banking I therefore urge all banks to embrace and install computers in their organisations. Banks must always build into their plans at the beginning of then years- Based in their experiences the expected amount of loss through fraud during the year

1.2   STATEMENT OF THE PROBLEM

                Despite the incidences of fraudulent attitude, occurring in the economy, Fraud in banks has become so recurrent in the headlines of our daily papers in such a profuse manner that they have ceased to be good captions on these papers in going through papers one flip over pages with headlines of fraud.   That not with standing.   Fraud committed has direct or indirect effect on individuals or collectively.  On the whole fraud had contributed to the Liquidation of so many banks.

 Also Many bank employees have been deprived of their benefits and in liquidation situations, total loss of their jo is observed on as well, the shareholders of the banks loss their money.

Alongside, the great role of the banking Industry play (which is being challenged by fraud is through loss of fund and liquidation of bank).  With the degree of fraud observed now, if allowed to thrive without he development of now control techniques to prune down the incidence of fraud occurrence in the  banking system, the future of the Nigerian economy is bound to fail.

However, with the Recognition of the aforementioned facts the researcher intends to punch back the  frontier of human ignorance (Investigation)  by evaluating the fraud. control techniques employed by commercial bank in Nigeria.

Finally, due to inadequate control and  techniques, fraud in Nigeria can not be controlled easily. 

1.3       OBJECTIVES OF THE STUDY

The objectives of this  study is as follows:

1.                          To examine the efficiency of fraud control techniques employed by commercial bank.

2.                          To determine factors militating against the strength and wekness of these techniques.

3.                          To ascertain the degree and effectiveness of fraud.

To find out the effect of fraud on the economy.

 

1.4      RESEARCH HYPOTHESES

There is one major hypothesis that forms the root of this study.  The findings will leave to acceptance of rejection of these hypothesis ie null hypothesis (Ho) which will be rejected to accept the alternative hypothesis (Hi), for the purpose of this study the under listed statement of hypothesis will be tested.

 

(i)          Null hypothesis (Ho): fraud control technique employed by first bank is not effective.

Alternative hypothesis (Hi):  fraud control techniques employed by first banks is effective.

(ii)        Null hypothesis (Ho) fraud in  commercial bank cannot be eliminated.

Alternative hypothesis (Hi): fraud in commercial bank can be eliminated.

 

1.5      RESEARCH QUESTIONS

i.            Are fraud control techniques in use by commercial banks in Nigerian effective and efficient ?

ii.          What are the causes if fraud in commercial banks ?

iii.        What are the effects of fraud in commercial banks ?

iv.         What steps can be taken to improve upon the fraud control techniques in use ?

v.           Who are responsible for fraud commission in the banks?   The top management middle management or low management or customers ?

vi.         Are there fraud cases in Nigerian commercial banks currently ?

vii.       Can use of computer help in controlling fraud in the commercial banks.?

 

1.6      SCOPE OF THE STUDY

The intention of this research work is to help relegate the incidence or menace of fraud to a minimal level. So this research work will be of minimal help, to all commercial banks operating in Nigeria. 

1.7      SIGNIFICANT  OF THE  STUD.

This research work will be great material to students, bankers, who will wish to conduct further – study on fraud generally.

Fraud control techniques, which this research work is basically carrying on, is a diversion from control concept (FRAUD).

Also. It will cud small scale industries, who are planning to improve in their business.

In conclusion, with the control and techniques of fraud, the economy will increase. 

1.9      DEFINITION OF TERMS

The following are terms used in writing this research as follows.

  FRAUD

        They term fraud is used, to refer to irregularities involving criminal deception to obtain an illegal or unjust advantage

2. CONTROL:   This simply means check or prevention or to put to an end.     Internal controls are design part to defect and control fraud.  

 

3.     TECHNIQUES

        Techniques is the method used in controlling fraud in the bank and other financial Institution.

4.     COMMERCIAL BANKS

        Commercial banks are privately owned banks.   They are established for the purpose of making profit for their owners.   Commercial banks accept deposits from the public and use their funds to lend at call and short notice tot he discount market to acquire treasury bills.

5.     Economy’s satisfaction – The world is exposed to various opportunities, better packaged products, diversified services as well as conveniences in obtaining the economic services.

6.     Appraisal – A judgment of the value, performance or nature of something.

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