Fraud Prevention and Control in Commercial Bank
Chapter One
Objective of the study
The objectives of the study are;
- To examine if management control has contributed to the breakdown in the internal audit systems of the selected commercial banks
- To determine if Management control have an effect on Whistle-blowing in the selected commercial banks
- To ascertain the way of preventing fraud in commercial bank
CHAPTER TWO
REVIEW OF RELATED LITERATURE
ORIGIN OF FRAUD
It is very difficult to trace the origin of fraud however, in the case of fraud perpetration, Adewole, 1990, opines that any minor mistakes by an individual which is not detected in time or at all makes such an individual to think that the success of such mistakes may be taken advantage of and may proceed to enact more mistakes, this time, deliberately so as to test the system’s check and balance. He stresses that where a deliberate mistake is made and is successful, the individual takes benefit of it for selfish end. He refers to this behaviour as fraud, since it is now a deliberate action aimed at dishonestly enriching the individual. The next logical step for such an individual is definitely to continue with such errors until he eventually graduates to a hardened fraudster. It can therefore be deduced that the genesis of fraud is traceable to the committal of minor, undetected mistakes, which are consequently capitalized upon by individual intending to defraud. (Adewole, 1990).
What is Fraud?
Fraud has been variously defined in the literature. Most developing countries of the world regard fraud as criminal act. In Nigeria, it is equally recognized as a crime too, this promoted the promulgation of decree on fraud and other fraud related matters/ structures namely “the failed Banks and recovery of public debts decree 18 of (1994), Banks and other financial institution decree (BOFID) 1991, money laundering Act No 3 of 1995 Federal Intelligence Investigation Bureau (FIIB), Independence Corrupt Practices Commission (ICPC) and Economic and Financial Crime Commission (EFCC). According to Oxford Advance Learners Dictionary of Current English “Fraud” is defined as “a criminal act/ deception. According to Udok (1992) Fraud is concerned with the activities of those who seek to divert to their pockets the fruits of others hard work. Adeniyi (2004) sees Fraud as an intentional act by one or more individuals, among management, employees or third parties which results in a misrepresentation, of financial statements which involve.
- Manipulation falsification or alteration of records or documents. 2. Misappropriation of Assets.
- Suppression or omission of the effect of transactions from records or documents.
- Recording of transaction without substance.
Misapplication of accounting policies. According to Adekanye (1983) “Fraud” is an act of falsifying or altering of a writing document for the purpose of doing injury to another person. He therefore, continued by saying any alteration of a writing document made with intention to defraud is therefore forgery”. According to Wiki pedia (2007) fraud is any insidious, sneaky crime that ruins individuals and families, causes corporation to go under. Eze (2004) refers to fraud as irregularities involving the use of criminal deception to obtain an unjust or illegal advantage. Another definition of fraud put it that, it is an act by which one person intends to gain a dishonest advantage over another person.
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 of individuals or elements that are homogeneous in description.
This study was carried to Fraud prevention and control in commercial Bank. Selected first bank Lagos form the population of the study.
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 eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain Fraud prevention and control in commercial Bank. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing chanllenges of Fraud prevention and control in commercial Bank
Summary
This study was on Fraud prevention and control in commercial Bank. Three objectives were raised which included: To examine if management control has contributed to the breakdown in the internal audit systems of the selected commercial banks, to determine if Management control have effect on Whistle blowing in the selected commercial banks and to ascertain the way of preventing fraud in commercial bank. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from selected schools of health in Lagos state. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Conclusion
Giving confidence to the bank customers that their money is safe. Encouraging or attract local and foreign invetors to invest their money into the banking sector with the impression that their money is secure. Exposing the fraud victim in the commercial banks for punishment and prosecution. Giving the commercial banks the impression that their business environment is free from fraud and they are working with faithful and honest staffs
Recommendation
Based on the findings of the study, the researcher made the following recommendations:
- Government should establish more anti fraud and anti corruption agencies to assist in sanitizing Nigeria banking system. 2. Bank management should employ strategies that will ensure early and prompt detection, prevention and control of fraud in commercial banks.
- Banks management should strengthen their security arrangement and use sophisticated security gadget to ensure tight security in both inside and outside the bank premises.
- The recruitment system in the bank should be base strictly on merit instead of considering who you know, connection and tribalism. This will ensure efficient and effective staff functioning.
References
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