Evaluating Internal Control System as Preventive Measure of Fraud in the Nigerian Banking Sector

Author(s)

ONAOLAPO Adekunle , AMUDA Toyin ,

Download Full PDF Pages: 15-22 | Views: 390 | Downloads: 93 | DOI: 10.5281/zenodo.3441639

Volume 2 - September 2013 (09)

Abstract

This study evaluated Internal Control System as preventive measure of fraud in the Nigerian banking sector. The objective was to identity whether this has actually achieved the desired result for which it was purposed, especially, in the popular Nigerian banks. To this end, the study was carried out by purposely collecting data from five Nigerian Commercial banks. The data were collected from bank audited and published financial statements and were analyzed with the use of Product Moment Correlation Coefficient and regression analysis. The findings revealed that Internal Control System has significantly prevented and curbed frauds in Nigerian banks. That bad corporate governance was responsible for proper designing of Internal Control System and that Internal Control System has led to increase in the corporate performance of Nigerian banks. Based on the findings, it was recommended that the management of every bank should create and establish a standard Internal Control System, strong enough to stand against the wiles of fraud in order to promote continuity of operations and to ensure the liquidity or solvency and going concern concept of the banks.

Keywords

Internal Control System, Banks, Fraud, Corporate Governance, Corporate Performance. 

References

  1. Achebe I.N (2008) Auditing and Investigation. Owerri, Bon Publication
  2. Adeyemo K . A. (2012) Fraud in Nigerian Banks: Nature, Deep Seated Causes, Aftermaths and Probable Remedies, Mediterranean Journal of Social Sciences 3(2) pp 279-289
  3. Akindele R. I (2011) Fraud as a Negative Catalyst in the Nigerian Banking Industry, Journal of Emerging Trends in Economics and Management Sciences 2 (5) pp 357-363
  4. Andrew E. U. (2008) Management Accounting Theory and Practice Uyo: Otuekong Associates.
  5. Annual Reports of Bank (2006-2010) Access, Diamond, FBN, UBA and Wema
  6. Asuquo, P.E. (2005), Bank Frauds: A look at the Nigerian Banking Clearing System ICAN News, Published by ICAN, vol. 14, No 1 Jan/May
  7. Awe, O.I. (2005) The Theory and Practice of Auditing 2 nd Edn. Gilgal Creations and Publication, Lagos.
  8. CBN (2005), Central Bank of Nigeria Annual Report and Statement of Accounts
  9. Etuk I. C. (2011). Evalvation of Internal Control System of Banks in Nigeria: Dissertation Submitted to St Clemnts University for Doctor of Philosophy (PhD)
  10. Fakunle B.(2006) Audit Companion, 2 nd Edn.pp 172-296
  11. ICAN (Institute of Chartered Accountants of Nigeria) 2006. Financial Reporting and Audit Practice pp:206 ISBN 978-382 42-8-7
  12. Idolor E.J (2010), Bank Fraud in Nigeria: Underlying Causes, Effects and Possible Remedies, African Journal of Accounting, Economics, Finance and Banking Research 6(6) pp62
  13. Idowu A. (2009) An Assessment of Fraud and its Management in Nigeria Commercial Banks: European Journal of Social Sciences, 10(4) pp 628-640
  14. Ogbunka, N.M. (2002), Risk and Internal Control Management in Financial Institutions, pp:187- 188
  15. Priceton A. (2008) www.wordnet.princeton.edu.perl/webun

Cite this Article: