THE IMPORTANCE OF INTERNAL CONTROL IN FRAUD PREVENTION IN NIGERIA BANK (A case study of Diamond Bank Nigeria Plc)

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ABSTRACT

This study mainly focuses on internal control and bank fraud prevention in Nigeria banking industry. Internal control plays a significant role in the Nigeria banking industry. Internal control are policies, procedures, practices on organizational structure implemented to provide reasonable assurance that organization’s business objective will achieve and undesired risk event will be prevented or detected and corrected based on either compliance or management initiated concerns. The researcher uses survey design hence, the use of questionnaires, personal interview and observation in data collection. The findings revealed that bank with internal control system can prevent the menace of fraud and a good internal control system has a significant affection on fraud detection and control. The study concludes that Lack of good internal control measure is a major cause of fraud in various banks and recommends among others that banks in Nigeria should pursue and effective internal control measures to prevent fraud.

HOW IT WORKS

CHAPTER ONE 1.1

Background of the Study

For a long time now, Nigeria has been witnessing a down turn in her development efforts. The primary cause of this down turn has been linked with the ambition of the average Nigeria to get rich quick at the expense of the less privilege ones. Those who have themselves a being opportune to control government establishment use the opportunity to perpetrate fraud or misappropriate public funds and properties. In order to maintain a better management control, various forms of internal control have been developed for the increasing complexity of modern business techniques with its increased size. This method of investigation is necessary for the efficiency of business and acts as a safe guard against error, fraud and embezzlement and the waste of human and material resources of an enterprise. Control and fraud prevention appears to be very important issues that need more attention in the Nigeria deposit money banks. Control has a mean of carrying out the duties and functions of the organization in an orderly manner, safeguard its assets and secure as far as possible the accuracy and reliability of its records in the internal control system of the organization in review. This research project seeks to disclose and investigate empirically the possible importance of internal control in fraud prevention, the causes of fraud and the challenges. Therefore the purpose of this research is to examine the relevance of internal control in fraud prevention in the banking industry. Diamond ban plc began as a private limited liability company on March 21, 1991 (the company was incorporated on December 20,1991). Ten year later, in February 2001, it became a universal Bank. in January 2005, following a highly successful base, Diamond bank became a public limited company (plc). In May 2005, the bank acquire former lion bank of Nigeria plc, it is one record that they are the first bank under the consideration regime that had the smoothest and seamless integration in the industry in January 2008. Diamond bank is one of the leading banks in Nigeria respect for its excellent service delivery, driven by innovation and operating on the most advance banking technology platform in the market. Diamond bank over the years leveraged on its underling residence to grow its assets base on the successes full retain of its key business relationships. And like a diamond, our strength makes them even more valve and valuable. One of Nigeria’s leading banks with strong offerings in retail, corporation and public sector banking, as well as an insurance mortgage, pension fund administration and investment banking. They are in a strategic partnership with international finance corporation (IFC) who availed the bank a 20 million facility dedicated specifically to support the growth of African micro small and medium Enterprises(AMSME) lending in the francophone west Africa with strong presence in the republic of Benin. Act is invested #17 billion in equity in Diamond bank in 2007 a transaction adjudged as the largest single private equity investment made in Nigeria by investors. 1.2 Statement of the Problem Leave a message 6/25/2019

THE IMPORTANCE OF INTERNAL CONTROL IN FRAUD PREVENTION IN NIGERIA BANK

The incidence of financial fraud and mismanagement in the banking sector has generated a lot of concern to government and stateholders. Financial fraud in the computer environment is increasing and has been a central feature. In a number of financial scandals in recent years. This fact together with the increasing sophistication of fraudsters. Create difficult problems for management. Other noticeable problems that have affected internal control is lack of clear and identifiable management style in the organization of work method of work or precedured. There exist a lot of arrears of work due to inadequate staffing or minimum knowledge of electronic data processing (EDP) and for efficient control of computerized system. Inability of government establishment to maintain a sound internal control system and lack of a well defined goal oriented policies aimed at building up a strong financial system. Therefore, this research work is set to empirically evaluate factors that have the greatest impact on internal control in the banking sector. in terms of customer deposit and profitability. 1.3 Objectives of the Study The main objectives of this study are to assess the importance of internal control in fraud prevention, taking. Diamond bank as a case study. However, the following are the specific objectives of the study. a. To evaluate the importance of internal control in the banking sector. b. To investigate the main causes of fraud in an organization. c. To investigate different ways of fraud prevention or control. 1.4 Research Questions 1. What are the importance of internal control in Diamond Bank Nigeria Plc. 2. What are the main causes of fraud in Nigeria banks? 3. How can this fraud be prevented or controlled? 1.5 Significance of the Study This research work will be useful to: 1. Financial institution and other business organizations as it will them with adequate knowledge on how to detect fraud and ways of preventing them. 2. The students, as a framework of reference when conducting inquiries or research into similar filed or topic. 3. All users of accounting information, such as shareholders, creditors and the government to know whether a financial institution is being run property.

THE IMPORTANCE OF INTERNAL CONTROL IN FRAUD PREVENTION IN NIGERIA BANK (A case study of Diamond Bank Nigeria Plc)