ABSTRACT
This study was conducted on the impacts of internal control systems on accounting frauds in Nigeria banks. Data are collected by using a self-administered survey which has both open ended and closed ended questions. The questionnaire was administered to both internal auditors and internal control/compliance officers who are found at different level. After feeding(inserting) the collected data in to SPSS for analysis purposes, the researcher found that: that accounting fraud was negatively related to control environment and monitoring process. On the other hand, risk assessment appeared to be positively related to fraud. The implication of these results is that: putting in place internal systems of control environment and process control reduces the likelihood of fraud taking place. Based on the findings, we conclude that: banks in Nigeria are not doing enough in the area of risk assessment. More proactive measures in risk assessment are needed to better tackle the rising menace of fraud in the system. Even though control environment and monitoring process seem to be correctly signed by indicating that implementing these actually reduce fraud, but the result is not statistically significant. Given our conclusion above, it is recommended that: Management of the organizations should take appropriate disciplinary action in response to departures from approved policies and procedures or violations of the code of conduct and the organization should arrange training and counselling services in order to help employees maintain and improve their competence for their jobs. Furthermore, Effective human resource policies strengthen the organization‘s internal controls. These policies should address hiring, training, performance evaluations, responsibilities, appropriate behaviour and disciplinary actions. If employees understand that they are responsible and accountable, the control environment is strengthened.
INTRODUCTION
.............. This study scrutinizes the impact of internal control over accounting and electronic frauds in commercial banks in Nigeria. Internal control is an accounting procedure or system designed to promote efficiency and assure management on the implementation of policies, principles in safeguarding assets and avoiding fraud and error. Internal Control is a major part of managing an organization. It comprises the plans, methods, and procedures used to achieve targeted organisational goals and objectives. And in doing so, support performance based management (Arad and Navid, 2009).
Recent reported cases of multibillion-naira fraudulent accounting, IT related fraud and reporting scandal have refueled public policy debates on Internal control (IC). It is an issue of considerable interest to policy makers involved in corporate governance issues. IC in essence is intertwined with and directly affected by the dynamics of corporate governance. IC is intended to assure that if it is properly designed and implemented, it helps the companies achieve their objectives and become prevented from accounting frauds.
Prior studies on IC have supported the relevance of IC disclosures as a monitoring tool on IC for shareholders and have focused on two dimensions: examining the substance and variety of voluntary IC disclosures in annual reports; and determining the usefulness of IC disclosures to users of financial statements (El-Gazzar and Fornaro, 2003; O‘Reilly-Allen and McMullen, 2002; Hermanson, 2000). For example, Deumes and Knechel (2005), Willis and Lightle (2000) and El-Gazzar and Fornaro (2003) analyzed the different types of assertions contained in IC disclosures. Wallace (1981) analyzed the content of IC disclosures of municipal government reports. Hermanson (2000) analyzed the demand for IC disclosures by surveying disparate user groups. He found that IC disclosures might serve to motivate both management and the audit committee to focus their attention on enhancing IC.
Wallace and White (1996) found that senior management at companies with an internal audit function (IAF) focused primarily on aspects of financial controls (versus operational controls) and those at larger firms were more likely to publish IC disclosures. McMullen et al. (1996) found that although smaller firms had a higher incidence of financial reporting problems than larger firms, the incidence was lower when senior management at such companies published IC reports. IC disclosure is risky but the risk varies inversely with the level of IC attained (Root, 1998). ...............
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CHAPTER ONE: INTRODUCTION
1.1 BACKGROUND OF THE STUDY
1.2 STATEMENT OF PROBLEM
1.3 PURPOSE OF THE STUDY
1.4 RESEARCH QUESTIONS
1.5 RESEARCH HYPOTHESES
1.6 SIGNIFICANCE OF THE STUDY
1.7 SCOPE OF THE STUDY
1.8 LIMITATIONS OF THE STUDY
1.9 ORGANIZATION OF STUDY -
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1 INTRODUCTION
2.2 THEORETICAL FRAMEWORK
2.2.1 INTERNAL CONTROL
2.2.2 COMPONENTS OF INTERNAL CONTROL
2.2.2.1 Control Environment
2.2.2.2 Risk Assessment
2.2.2.3 Control Activities
2.2.2.4 Information and Communication
2.2.2.5 Monitoring
2.3 ACCOUNTING FRAUD
2.3.1 ELECTRONIC FRAUD AND AUDIT
2.4 METHODS OF FINANCIAL STATEMENT FRAUD
2.4.1 Motivations for financial statement fraud
2.5 BEYOND THE FRAUD TRIANGLE
2.5.1 FRAUD AND OPPORTUNITY
2.5.2 FRAUD AND MOTIVE
2.5.3 FRAUD AND RATIONALIZATION
2.6 METHODS TO COMBAT FRAUD
2.6.1 Maintain a Fraud Policy
2.6.2 Establish a Telephone Hotline
2.6.3 Employee Reference Checks
2.6.4 Fraud Vulnerability Reviews
2.6.5 Perform Vendor Contract Reviews
2.6.6 Use Analytical Review
2.6.7 Password Protection
2.7 LINKAGE BETWEEN INTERNAL CONTROL AND ACCOUNTING FRAUDS
2.8 EMPIRICAL EVIDENCES
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 METHODS DESIGN
3.2 POPULATION OF THE STUDY
3.3 SAMPLE SIZE DETERMINATION
3.4 DATA COLLECTION METHOD
3.5 OPERATIONAL MEASURES OF VARIABLES
3.6 VALIDITY AND RELIABILITY TEST
3.7 METHOD OF DATA ANALYSES
3.7.1 Model Specification
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.0 INTRODUCTION
4.1 DATA PRESENTATION
4.1.1 Respondents Profile
4.2 DATA ANALYSES AND INTERPRETATION
4.3 HYPOTHESES TESTING
CHAPTER FIVE: DISCUSSION OF FINDINGS, CONCLUSION AND RECOMMENDATION
5.0 INTRODUCTION
5.1 DISCUSSION OF FINDINGS
5.2 CONCLUSION
5.2 RECOMMENDATIONS
BIBLIOGRAPHY
APPENDICES
Reference code: c025
Reference code: c025
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120 Pages
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