THE ROLE OF INTERNAL AUDITORS IN FRAUD DETECTION AND PREVENTION IN BANKS IN NIGERIA


THE ROLE OF INTERNAL AUDITORS IN FRAUD DETECTION AND PREVENTION IN BANKS IN NIGERIA(A CASE STUDY OF SKYE BANK PLC)

CHAPTER ONE   INTRODUCTION

1.0      Background of the study

A closer look at institutions in our society shows that a lot of businesses are folding up due to fraudulent acts. Both the management and the employees indulge in activities that can bring down an institution, and ignorance of the roles of an internal auditor is also a problem. Auditors give a fair account of the financial statement of an institution as put together by both the management and employees.

Internal control is of much importance in achieving a company’s goals and objectives. Internal control helps institutions carry out step-by-step processes, economic procedures, accurate and competent actions in order to be efficient and effective in their managerial roles (Connor, 1979:p6). An organization can achieve risk management, disciplined processes, and evaluation of its activities through internal control.

Financial institutions are flooded with fraudulent activities and there is a need for the presence of internal auditors to help point out these flaws and leakages. Internal auditors are granted the privilege by the senior management of the bank to interrogate any member of staff, go through files, reports, and even minutes of meetings in carrying out their assignments. It is expected of the internal auditor on going through the information gotten; advise the institution appropriately by reporting directly to the governor of the institution. An effective internal audit control does not only checkmate excesses but engages in managerial control (Dandago, 2002).

The purpose of the internal auditor is to examine the strengths and weaknesses in the internal control of the policies of an institution that can lead to undetected fraud and point them out for corrective measures.

Frauds are common in institutions, though very common in banks; that is why internal controls are done in banks to control losses and even prevent the occurrence of losses.

Internal control has spoilt the business of bank managers who engage in fraud and even Nigerians’ reputation in the international community.

Conclusively, the activities of bank fraud are increasing as the day goes by, and banks who cannot put measures in place to control this will crumble (Adeduro, 1998:p48). Therefore, this study is meant to discover the roles of internal auditors in fraud detection and prevention in banks in Nigeria (a case study of Skye bank plc).

1.1      Statement of the general problem

Nigeria’s reputation is stained in the international community as it is known to be a corrupt nation; cases of fraud in every sector of the economy including the financial institution. People are not honest in the duties assigned to them because of their personal interests.

Poor management of bank institutions has led to their undue fold-up. Management and even employees embezzle funds, falsify figures, and do not keep accurate records of financial statements all give rise to fraud in the banking industry.

In addition, our poor judicial system contributes to fraud. Fraudsters are not persecuted as they know with bribes they can escape the full wrath of the law and such cases will be swept under the carpet. 

 

1.2      Aims/ Objectives of the study

The major objective of this study is to know the roles of internal auditors in fraud detection and prevention in banks in Nigeria; a case study of Skye bank plc.

Other specific objectives include:

To determine how effective Skye bank’s internal control system is. To determine the relationship between internal auditors and fraud in banks. To determine if internal auditors alone can prevent fraud in Nigerian banks. To determine how transparent and effective internal auditors are in detecting and preventing fraud in Nigerian banks.

1.3      Research Questions

How effective is Skye bank’s internal control system? What is the relationship between internal auditors and fraud in Nigeria? Can internal auditors alone prevent fraud in Nigerian banks? How transparent and effective are internal auditors in detecting and preventing fraud in Nigerian banks?

1.4      Research Hypothesis

Ho: Skye bank does not have an effective internal control system.

Hi: Skye bank has an effective internal control system.

1.5      Significance/ Justification of the study

This study is of immense importance to the general public with special importance to Nigerian banks.

Many Nigerians are ignorant of who auditors are and the roles they play in curbing fraud in the banking sector. It is meant to bring to the knowledge of business owners that auditors should be involved in the management function of their firms.

However, this study is meant to encourage banks to have a committee of internal auditors who will help check losses, prevent losses, and offer advice on how a bank can have an accurate financial statement.

This study will be of immense benefit to other researchers who intend to know more on this topic and can also be used by non-researchers to build more on their work. This study contributes to knowledge and could serve as a benchmark or guide for other work or study.

1.6      Scope/Limitations of the study

This study is restricted to the role of internal auditors in fraud detection and prevention in banks in Nigeria, with Skye bank plc as the case study.

Limitations of the study

Financial constraint:  Insufficient funds posed a challenge on the researcher in the course of gathering this information.

Time constraint: Based on the fact that the researcher has to combine his study with other academic work, it hindered the time devoted to the research work.

1.7      Definition of terms

Role: The position or purpose that someone or something has in a situation, organization, society, or relationship.

Internal Auditing: This is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. Internal auditing is a catalyst for improving an organization's governance, risk management, and management controls by providing insight and recommendations based on analyses and assessments of data and business processes. With a commitment to integrity and accountability, internal auditing provides value to governing bodies and senior management as an objective source of independent advice. Professionals called internal auditors are employed by organizations to perform the internal auditing activity.

Fraud: This is a deliberate deception, trickery, or cheating intended to gain an advantage

References 

Connor, P. (1979:p6), Importance of Management Fraud Risk, Amsterdam: Wiley Publication.

Dandago K.I.(2002), Auditing in Nigeria: A Comprehensive Text, Kano: AdamuJoji publisher.

Adeduro A. A. (1998). “An investigation into Frauds in Banks” An Unpublished Thesis of Faculty of Social Sciences, Department of Accounting, University of Lagos, pp 42 – 49

.

THE ROLE OF INTERNAL AUDITORS IN FRAUD DETECTION AND PREVENTION IN BANKS IN NIGERIA



TYPE IN YOUR TOPIC AND CLICK SEARCH.






RESEARCHWAP.COM
Researchwap.com is an online repository for free project topics and research materials, articles and custom writing of research works. We’re an online resource centre that provides a vast database for students to access numerous research project topics and materials. Researchwap.com guides and assist Postgraduate, Undergraduate and Final Year Students with well researched and quality project topics, topic ideas, research guides and project materials. We’re reliable and trustworthy, and we really understand what is called “time factor”, that is why we’ve simplified the process so that students can get their research projects ready on time. Our platform provides more educational services, such as hiring a writer, research analysis, and software for computer science research and we also seriously adhere to a timely delivery.

TESTIMONIES FROM OUR CLIENTS


Please feel free to carefully review some written and captured responses from our satisfied clients.

  • "Exceptionally outstanding. Highly recommend for all who wish to have effective and excellent project defence. Easily Accessable, Affordable, Effective and effective."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "I saw this website on facebook page and I did not even bother since I was in a hurry to complete my project. But I am totally amazed that when I visited the website and saw the topic I was looking for and I decided to give a try and now I have received it within an hour after ordering the material. Am grateful guys!"

    Hilary Yusuf, United States International University Africa, Nairobi, Kenya.
  • "Researchwap.com is a website I recommend to all student and researchers within and outside the country. The web owners are doing great job and I appreciate them for that. Once again, thank you very much "researchwap.com" and God bless you and your business! ."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "I love what you guys are doing, your material guided me well through my research. Thank you for helping me achieve academic success."

    Sampson, University of Nigeria, Nsukka.
  • "researchwap.com is God-sent! I got good grades in my seminar and project with the help of your service, thank you soooooo much."

    Cynthia, Akwa Ibom State University .
  • "Great User Experience, Nice flows and Superb functionalities.The app is indeed a great tech innovation for greasing the wheels of final year, research and other pedagogical related project works. A trial would definitely convince you."

    Lamilare Valentine, Kwame Nkrumah University, Kumasi, Ghana.
  • "Sorry, it was in my spam folder all along, I should have looked it up properly first. Please keep up the good work, your team is quite commited. Am grateful...I will certainly refer my friends too."

    Elizabeth, Obafemi Awolowo University
  • "Am happy the defense went well, thanks to your articles. I may not be able to express how grateful I am for all your assistance, but on my honour, I owe you guys a good number of referrals. Thank you once again."

    Ali Olanrewaju, Lagos State University.
  • "My Dear Researchwap, initially I never believed one can actually do honest business transactions with Nigerians online until i stumbled into your website. You have broken a new legacy of record as far as am concerned. Keep up the good work!"

    Willie Ekereobong, University of Port Harcourt.
  • "WOW, SO IT'S TRUE??!! I can't believe I got this quality work for just 3k...I thought it was scam ooo. I wouldn't mind if it goes for over 5k, its worth it. Thank you!"

    Theressa, Igbinedion University.
  • "I did not see my project topic on your website so I decided to call your customer care number, the attention I got was epic! I got help from the beginning to the end of my project in just 3 days, they even taught me how to defend my project and I got a 'B' at the end. Thank you so much researchwap.com, infact, I owe my graduating well today to you guys...."

    Joseph, Abia state Polytechnic.
  • "My friend told me about ResearchWap website, I doubted her until I saw her receive her full project in less than 15 miniutes, I tried mine too and got it same, right now, am telling everyone in my school about researchwap.com, no one has to suffer any more writing their project. Thank you for making life easy for me and my fellow students... Keep up the good work"

    Christiana, Landmark University .
  • "I wish I knew you guys when I wrote my first degree project, it took so much time and effort then. Now, with just a click of a button, I got my complete project in less than 15 minutes. You guys are too amazing!."

    Musa, Federal University of Technology Minna
  • "I was scared at first when I saw your website but I decided to risk my last 3k and surprisingly I got my complete project in my email box instantly. This is so nice!!!."

    Ali Obafemi, Ibrahim Badamasi Babangida University, Niger State.
  • To contribute to our success story, send us a feedback or please kindly call 2348037664978.
    Then your comment and contact will be published here also with your consent.

    Thank you for choosing researchwap.com.