An Assessment of Crime and Financial Fraud and Its Impact on Nigeria’s Financial Sector
Chapter One
OBJECTIVE OF THE STUDY
The overall goal of the research is to:
- Investigate the causes of financial fraud in the finance sector.
- Investigate the impact of financial fraud on the financial sector
- Find out ways financial fraud can be curbed in the financial sector.
CHAPTER TWO
REVIEW OF LITERATURE
INTRODUCTION
Our focus in this chapter is to critically examine relevant literatures that would assist in explaining the research problem and furthermore recognize the efforts of scholars who had previously contributed immensely to similar research. The chapter intends to deepen the understanding of the study and close the perceived gaps.
Precisely, the chapter will be considered in three sub-headings:
- Conceptual Framework
- Theoretical Framework and
- Empirical Review
CONCEPTUAL FRAMEWORK
The Evolution Of The Nigerian Banking Sector
The banking operation began in Nigeria in 1982 under the control of the expatriates and by 1945, some Nigerians and Africans had established their own banks. The first era of consolidation ever recorded in Nigerian banking industry was between 1959-1969. This was occasioned by bank failures during 1953-1959 due to the liquidity of banks. Banks, then, do not have enough liquid assets to meet customer demands. There was no well organised financial system with enough financial instruments to invest in. Hence, banks merely invested in real assets which could not be easily realised to cash without loss of value in terms of need. This prompted the federal government then, backed by the World bank report to institute, of the loynes commission on September 1958.
The outcome was the promulgation of the ordinance of 1958, which established the Central bank of Nigeria(CBN). The year 1959 was remarkable in the Nigerian banking history not only because of the establishment of Central Bank of Nigeria(CBN) but that the treasury bill ordinance was enacted which led to the issuance of our first treasury bill in April, 1960.
The period (1959-1969) marked the establishment of former money, capital markets and portfolio management in Nigeria, in addition, the company acts of 1968 were established. This period could be said to be the genesis of serious banking regulation in Nigeria. With the CBN in operation, the banking industry restructing was motivated by the need to establish a healthy banking sector that will carry out its financial intermediation role at a minimal cost which effectively provides services consistent with world standards. The major aim of the consolidation program was to store up the capital base of banks consolidated through mergers and take-over to local banks. This allows foreign banks to participate in the banking industry by providing additional capitalisation through investment infrastructure in new banking products, operating technologies and buying shares of the existing banks. The banking sector reforms, involve the reform of the regulatory and supervisory framework, the safety net arrangement as well as mechanisms to speed up attempts at resolution of banks non-performing loans. In an attempt to revitalize the banking system, a package were comprising among others.
The Development Of Banking Industry In Nigeria
Banking services development in Nigeria as a sideline to other commercial activities of Elder Dempster Company. According to available information, the first real bank in Nigeria was the African Banking Corporation founded in 1892. In 1894, Bank of British West African Banking Corporation which called the bank of West African on Nigeria‟s Independence and later called the Standard Bank of Nigeria Limited and subsequently changed its name to First Bank of Nigeria Ltd now Plc had complete monopoly of business in the banking industry until the establishment in 1917 of the colonial bank. The Colonial Bank opened branches in Jos, Kano, Lagos and Port Harcourt. In 1952 the bank changed its name to Barclays Bank DCO and is now called Union Bank of Nigeria Plc.
Indigenous participation in the Banking Industry started in 1929 with the establishment of the Industrial and Commerce Bank by a group of Nigerian and Ghanaian Entrepreneurs. The Bank failed in 1930 due to inadequate capital, poor management, hostile and unfair competition from the foreign established banks.Undaunted by the failure of the first attempt at establishing an indigenous bank, another group of entrepreneurs, this time all Nigerians among whom were the late Dr. A. Maja, Chief T. A. Doherty and Late H. A. Subair established the Nigerian Merchant Bank in 1933. The bank was more successful than its predecessor, but like it, also failed in 1936. Meanwhile the same group of indigenous pioneers in field of banking had established in 1993 the National Bank of Nigerian Limited, which was to make history by being the first indigenous bank to survive though with some few problems to the 1952 Banking Ordinance.
CHAPTER THREE
RESEARCH METHODOLOGY
Introduction
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
Research Design
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e. mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
Population of the Study
According to Udoyen (2019), a study population is a group of elements or individuals, as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitutes individuals or elements that are homogeneous in description.
This study was carried out to examine the impact of crime and financial fraud and its impact on Nigeria financial sector using Access bank Kubwa,Nigeria as a case study. Hence, the population of the study comprises of staff of Access bank Kubwa Abuja, Nigeria.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of fifty-seven(57) questionnaires were administered to respondents of which fifty fifty (55) were returned while 50 were validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 50 was validated for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS:
Introduction
This chapter summarizes the findings on the impact of crime and financial fraud and its impact on Nigeria financial sector using Access bank Kubwa,Nigeria as a case study. The chapter consists of summary of the study, conclusions, and recommendations.
Summary of the Study
In this study, our focus was to examine the impact of crime and financial fraud and its impact on Nigeria financial sector using Access bank Kubwa, Nigeria as a case study. The study was specifically set to investigate the causes of financial fraud in the finance sector, investigate the impact of financial fraud on the financial sector, and find out ways financial fraud can be curbed in the financial sector.
The study adopted the survey research design and randomly enrolled participants in the study. A total of 50 responses were validated from the enrolled participants where all respondent are staff of Access bank Kubwa Abuja, Nigeria.
Conclusions
In the light of the analysis carried out, the following conclusions were drawn.
- The causes of financial fraud in the finance sector includes: opportunity, rationalization, job dissatisfaction, and financial problems
- Financial fraud has a negative impact on the financial sector.
- The ways financial fraud can be curbed in the financial sector includes: establish clear policies and procedures, implement internal controls, conduct regular fraud awareness training, establish monitoring and detection mechanisms, and respond and investigate fraud incidents.
Recommendation
The following recommendations were proffered with respect to the findings of the study;
- The Nigeria Government and managements of businesses and non business organizations should improvise the necessary equipment, software and other technological products that will assists accountants in fraud detection and prevention.
- Most practices and kills used by accountants in Nigeria are stalled or out of date with trending skill and effective skills therefore organizations should also establish training opportunities for the accountants to enable them get acquainted with more effective skills.
- The image of Nigeria in the international community has discouraged foreign direct investment because of economic and financial crime. This has effect on development, employment and the standard of living of the people. Eradication of economic and financial crime through the adoption of forensic accounting in the system will improve the image of firms under review.
- Government and regulatory authorities should ensure the provision of standards and guidelines to regulate forensic activities and above all Nigerians should embrace integrity, objectivity, fairness and accountability in their day-to-day activities.
REFERENCES
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