PREVENTION OF FRAUD IN NIGERIAN FINANCIAL INSTITUTIONS
(A CASE STUDY OF U.B.A)
ABSTRACT
This work was designed to study the prevention of fraud in Nigeria financial institutions, with particular reference to banks (UBA Plc). Banks deal essentially in cash instrument and other documents which are generally of a negotiable and easily transferable in nature. Hence it is very appropriate to say that the exposure of banks to both internal and external fraud is very great. This practice is very common to area involving cash, cheque and fund transfer operation. Therefore that was the reason the researcher carried out this study in order to find out the causes of fraud and how to prevent it in Nigerian financial institutions.
From the various articles and journals the researcher read on fraud, causes, methods, detection and prevention of fraud in Banking industries and financial institutions, it has roused my deep interest in this project topic. It is therefore my pleasure to carryout this on “prevention of fraud in Nigerian financial institutions” using UBA Plc as a case study.Fraud cannot be eradicated. It is true that all thieves do not think alike so every fraud has its own unique approach, hence there may be no unique approach to forestall fraud. The project work contained five Chapters.In order to obtain as much relevant information on this study as possible the researcher used primary and secondary sources of data collection. The primary data: The researcher carried out a direct interview with the management and staff of UBA plc station Road Okpara Avenue Enugu.The secondary data: The secondary data was obtained from textbooks, magazines, journals, commercial banks Annual Report/newspapers, dictionaries e.t.c.The instrument used in data collection was mainly questionnaire.
TABLE OF CONTENTS
CHAPTER ONE
1.0 Introduction
1.1 Background of the Study
1.2 Statement of the problem
1.3 Objective of the Study
1.4 Research Question
1.5 Hypothesis
1.6 Scope of the study
1.7 Limitation of the Study
1.8 Definition of Terms
Reference
CHAPER TWO
2.0 Review of related literature
2.1 Theoretical review of related literature
2.2 Empirical review of related literature Reference
CHAPTER THREE
3.0 Research Design and Method
3.1 Research Design
3.2 Area of study
3.3 Population of Study
3.4 Source of Data
3.5 Sampling method
3.6 Research Instrumentation
3.7 Validity, reliability of research instruments
3.8 Method of Investigation
Reference
CHAPTER FOUR
4.0 Presentation and Analysis of Data
4.1 Presentation and Analysis of Result
4.2 Test of Hypothesis
Reference
CHAPTER FIVE
5.0 Summary of Findings/Conclusion
and Recommendation
5.1 Findings
5.2 Conclusion
5.3 Recommendation
Bibliography and Reference
Appendix
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
There has been no single accepted definition of terms “fraud”. Fraud is term known in all the nooks and cranny in Nigeria. Little children in primary school need no explanation of the subject. This fraud itself has eating deep into the fabrics of our society. The only remedy to this ugly situation will be God’s intervention. Other wise the wave of this moral decadence will persist. This is why courts and writers on fraud try to escape away from giving a decisive definition. Notwithstanding the varied meanings attached to the concept of financial fraud, so many authors addressed the subject with the following working definitions.
What is fraud? Oxford Advanced learner’s Dictionary defines fraud as the crime of cheating in order to get money or goods illegally.
Jenfa B.I defined fraud as misappropriation, theft or embezzlement of corporate assets in the particular economic environment.
According to chartered institute of public finance and accounting, united states, fraud are those intentional distortion of financial statements or other record which are carried out to conceal the misappropriation of assets or other wise for gain (Ande, 1997;50).
However having closely studies these approaches from definition of fraud especially from the banking perspective. One may correctly see banking fraud a deliberate act by an individual or group within or without he Nigeria banking system to cheat, swindle, deceives or manipulate in other to disposes the banks depositors or share holders of their funds.
Despite several definition of frauds, the authors believes that the ones so far given are nearly appropriate, advantages and inspiring for the purpose in which the research intends to achieve.
The position of banking system in our economy can not be over emphasized. They act as the “conduct pipe” through which all the financial transaction passes. However, fraud has roved a sensors bottleneck to the roper functioning of the roles of the banking system to the Nigeria economy. People are beginning to get worries and sooner than later may loose confidence in our banking sector due to mainly the very increasing incidence of fraud in our today’s banks, properties should be on trust not fraud.
1.2 STATEMENT OF PROBLEM
The frequent causes of financial fraud in many financial institutions in our country are now taken as the utmost concern to financial experts and micro economist. To some banking experts, the issue of fraud is an internal vice in the Nigeria Banking system. They argue on this because a good number of frauds occur among our banks without the knowledge of outsider even where the public is aware it does not affect the rate at which customers withdraw or deposit money.
These experts are inclined to believe this because the nation is under banked, the populaces are at no option but to sue the available banks especially the foremost and well established bank like UBA Plc even if there are glaring inefficiencies in the operations in competence and laziness among most banks staff given birth to fraud.
Fraud has paralyzed the roof, the foundation and crushability of our banking system. Just pick up any national daily Newspaper or from police record and you will be alarmed at the extent and magnitude of bank fraud in Nigeria banking system. Many banks have gone on distressed. Therefore the researcher is aiming at finding fraud in the Nigeria banking system which has to offer to these deficiencies aforementioned with special reference with UBA Plc station road Okpara Avenue Enugu.
1.3 OBEJCTIVE OF THE STUDY
The overall objective of this work is towards ascertaining the effects financial fraud have had on Nigeria banking system or banking industry since its inception in the Nigeria industry furthermore, the subsidiary objective include;
1. To find out the causes of fraud in our financial institution.
2. To identify the problems banks face as a result of the introduction of financial fraud.
3. To recommend solutions that may help in checking financial fraud in our banking system.
1.4 RESEARCH QUESTIONS
The following research questions have guided this study.
1. What are the causes of financial fraud; can this be checked and controlled?
2. Has financial fraud in the banking industry helped to impede problems towards their failure?
3. What measure does the bank adopt to check financial fraud?
1.5 HYPOTHESES
In recognition of the above facts and in order to achieve the objective the study purposes the following propositions.
HYPOTHESIS ONE
Ho: The causes of financial fraud cannot be checked and controlled.
H1: The causes of financial fraud can be checked and controlled.
HYPOTHESIS TWO
Ho: Financial fraud in the banking industry has not helped to impede problem towards their failure.
H1: financial fraud in the banking industry has helped to impede problems towards their failure
HYPOTHESIS THREE
Ho: The bank has not adopted some measures to check financial fraud.
H1: The bank has adopted some measures to check financial fraud.
1.6 SCOPE OF THE STUDY
This research work on prevention of fraud in Nigerians financial institutions is with a particular reference to UBA Plc station Road Okpara Avenue Enugu and its cover facts on the issue. In other to attain the objectives of this research, the scope of the study was defined to embody all relevant aspects of fraud in banking industry such as “UBA Plc”.
The study also focused on areas relating to the staff strength, bank size of deposits, size of loans and allowances, years of banking experience of fraudsters, the means of fraud prevention and detection and the punishment to be imposed to fraudsters.
1.7 SIGNIFICANCE OF THE STUDY
This is divided into two
1) Academic
2) Practical
ACADEMIC SIGNIFICANCE
This will help readers and those who may which to make reference on the topic of study while undertaking similar research work. For potential auditor and accountants, it is a material of reading. They should be able to understand what is fraud and what is audit, how and why auditing and internal control system is an ingestible ambient of the business system.
PRACTICAL SIGNIFICANCE
This project will equally be of immense help to other establishment and organization both in public and private sector. The need to establish a visible internal audit unit as a means of internal control should not be over-emphasized.
It is of help that the management of UBA of Nigeria Plc station road, Enugu in particular should use the findings of this research to equip the audit (i.e. audit department and inspection). Investors, promoters and share holders would find this study very useful. This will serve as an eye opener to them on what it takes to invest in banks.
However this work will be immense help to financial institutions in Nigeria in particular and to all that may have need for assistance in detection of these opportunities in general.
1.9 DEFINITION OF TERMS
FRAUD:
This is one type of irregularity. The word fraud is used to refer to irregularities involving the use of criminal deception to obtain unjust or illegal advantages.
FRAUD AUDITOR:
A fraud auditor is an expert who by this specific scientific and technical training, exposure and experience, knows more and more about less and less of fraud.
FRAUD AUDITING:
Fraud auditing may be defined as creating an environment that encourages the detection and prevention of fraud in government, public, commercial and even private establishments.
INTERNAL AUDIT
Internal audit is the monitor and one of the most important aspects of the internal control system.
INTERNAL CONTROL SYSTEM:
It is a managerial control which functions by measuring and evaluating the effectiveness of other controls (in all areas of the organization).
IRREGULARITIES:
This word is sued to refer to international distortions of financial statement for whatever purpose and misappropriation of assets.
MANAGEMETN FRUAD:
Management fraud has been defined as “deception by those in authority in an organization which results in loss or disadvantage to the organization or to those dealing with it”
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