Reference code: C049
ABSTRACT
This research thesis investigated the effect of effective internal control systems on the occurrence of distress in the Nigerian banking industry. In order to achieve the aim of the study, three hypotheses were formulated and data collected through the issue of 315 structured questionnaire to staff of deposit money banks in Nigeria. Of the 315 questionnaires, 281 were correctly completed and hence used in the study. Data collected was tested using simple regression and. From the data analyses, the following findings were made: That there is a positive and significant relationship between the existence of an effective control environment and fraud elimination. Secondly, our findings show the existence of a negative but significant relationship between risk assessment and banking sector distress in Nigeria. Our findings also indicate that there is a negative but significant relationship between the existence of an effective control environment and banking sector distress in Nigeria. Finally, we note that the banks seem not to provide the staff with adequate training internal control measures. Given these findings, we conclude that: The implementation of effective control environment can to a large extent curb the occurrence of fraud in the banking system. We further conclude that banks with strong risk assessment strategies will more likely be able to avoid bank distress. We also conclude that the existence of adequate control environment helps banks to forestall the occurrence of fraud and hence bank distress. Finally, we conclude that banks are not providing adequate and up to date training to the staff on effective internal control systems. Based on the above findings and conclusions, we make the following recommendations: Banks should upgrade their risk assessment policies and strategies in other to reflect adequately capture new method through frauds are perpetrated such as electronic and internet scams. The control environment happens to be a lot more prone to abuse. This is as a result of the fact that finding the optimum control environment is not always possible. Thus if left a little lax, fraud and other malpractices may result. On the other hand, if too much control is exerted on the environment, it may impede the performance of staff. Thus, we recommend a continual review of the control environment strategies with a view of plugging any gap that may result in losses to the bank whether through fraud or restricted/impeded performance. Finally, we recommend that banks should as a matter of urgency step up their training and retraining programs as it concerns internal control systems.
The banking industry in Nigeria has witnessed severally due to mismanagement resulting from either non-observance of laid down principles and policies (internal control system) that were established by the management and regulatory authorities or non-existence of such internal controls system. Whatever the case is, every organization, not only the bank, must install efficient and effective internal controls system in order to protect its assets from possible losses resulting from funds misapplication, misuse and vandalism of company’s property, expropriation and errors made by inefficient and inexperienced personnel. According to (18), internal controls can be likened to the central nervous system of human being, the breakdown of which medical doctors state would result to death of the culprit. In this wise, collapse of internal controls system in any organization leads to the extinction or distress of that organization. Therefore, reasonable and proactive organizations spend a great proportion of their resources to ensure the existence of adequate and effective internal controls system.
The institute of Chartered Accountants of England and Wales defined internal control as the whole system of control established by management in order to carry in the business of the organization in an efficient and orderly manner, to safeguard its assets and secure as far as possible, the accuracy and reliability of its records. This definition points to the fact that internal controls create a basis of amount of work to be carried out by the professionals charged with the function, as they are expected to ensure the safeguard of the organization’s funds, ensure that there is efficient and effective management of assets and that financial statements are accurate at all time.
Though internal controls system cannot eliminate all errors and irregularities, it is expected that they can alert management to potential problems, which can be controlled before they escalate to big problems. Nevertheless, the established internal control system must be evaluated from time to time so as to provide management with some assurance regarding its effectiveness. Internal controls system can only be adjudged to be effective if its components are present and function effectively for operations, financial reporting and compliance. ............... FOR ACCESS TO THE FULL PROJECT WORK, USE THE ORDER NOW! BUTTON BELOW
INTRODUCTION
............... Internal controls have existed from the accident times. In Hellenistic Egypt, there was a dual administration, with one set of bureaucrats charged with collecting taxes and another with supervising them. Also in the Republic of China, the control Yuan (Pinyin Jiancha Yuan), one of the five branches of government, is an investigatory agency that monitors the other branches of government.The banking industry in Nigeria has witnessed severally due to mismanagement resulting from either non-observance of laid down principles and policies (internal control system) that were established by the management and regulatory authorities or non-existence of such internal controls system. Whatever the case is, every organization, not only the bank, must install efficient and effective internal controls system in order to protect its assets from possible losses resulting from funds misapplication, misuse and vandalism of company’s property, expropriation and errors made by inefficient and inexperienced personnel. According to (18), internal controls can be likened to the central nervous system of human being, the breakdown of which medical doctors state would result to death of the culprit. In this wise, collapse of internal controls system in any organization leads to the extinction or distress of that organization. Therefore, reasonable and proactive organizations spend a great proportion of their resources to ensure the existence of adequate and effective internal controls system.
The institute of Chartered Accountants of England and Wales defined internal control as the whole system of control established by management in order to carry in the business of the organization in an efficient and orderly manner, to safeguard its assets and secure as far as possible, the accuracy and reliability of its records. This definition points to the fact that internal controls create a basis of amount of work to be carried out by the professionals charged with the function, as they are expected to ensure the safeguard of the organization’s funds, ensure that there is efficient and effective management of assets and that financial statements are accurate at all time.
Though internal controls system cannot eliminate all errors and irregularities, it is expected that they can alert management to potential problems, which can be controlled before they escalate to big problems. Nevertheless, the established internal control system must be evaluated from time to time so as to provide management with some assurance regarding its effectiveness. Internal controls system can only be adjudged to be effective if its components are present and function effectively for operations, financial reporting and compliance. ............... FOR ACCESS TO THE FULL PROJECT WORK, USE THE ORDER NOW! BUTTON BELOW
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY 1
1.2 STATEMENT OF PROBLEM 6
1.3 OBJECTIVE OF THE STUDY 6
1.4 RESEARCH QUESTIONS 7
1.5 RESEARCH HYPOTHESIS 7
1.6 SCOPE OF THE STUDY 8
1.7 LIMITATION OF THE STUDY 8
CHAPTER TWO
LITERATURE REVIEW
2.0 INTRODUCTION 9
2.1.1 THEORETICAL FRAMEWORK 10
2.1.2 DEFINITION OF INTERNAL CONTROL 13
2.1.3 CONTROL ENVIRONMENT 16
2.1.4 RISK ASSESSMENT 18
2.1.5 CONTROL PROCEDURES 20
2.1.6 MONITORING 25
2.1.7 INFORMATION AND COMMUNICATION 26
2.1.8 OBJECTIVE OF INTERNAL CONTROLS SYSTEM 27
2.1.9 LIMITATION OF INTERNAL CONTROL 29
2.1.10 INTERNAL AUDITING AND INTERNAL CHECK 30
2.1.11 EVALUATION OF INTERNAL CONTROLS SYSTEM 32
2.1.12 DOCUMENTATION OF INTERNAL CONTROLS SYSTEM35
2.1.13 BANK DISTRESS 36
2.1.13.1 CAUSES OF BANK DISTRESS 39
2.1.13.2 MANAGEMENT PROBLEM 39
CHAPTER THREE
RESEARCH METHODOLOGY
3.0 INTRODUCTION 42
3.1 RESEARCH DESIGN 42
3.2 STUDY POPULATION 43
3.3 SAMPLE AND SAMPLING TECHNIQUES 44
3.4 NATURE AND SOURCES OF DATA 46
3.5 METHODS/INSTRUMENTS OF DATA COLLECTION 46
3.6 METHODS OF DATA ANALYSES 48
3.7 VALIDITY AND RELIABILITY OF INSTRUMENT 49
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
4.0 INTRODUCTION 51
4.1 DATA PRESENTATION 52
4.2.1 RESEARCH QUESTION ANALYSES 54
4.2.2 HYPOTHESES TESTING 63
4.3 DISCUSSION OF FINDINGS 67
CHAPTER FIVE
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
5.1 SUMMARY 70
5.2 CONCLUSIONS 70
5.3 RECOMMENDATIONS 72
BIBLIOGRAPHY 74
APPENDICES 79
Reference code: c049
Reference code: c049
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