Internal control, the strength of every organization, has become of paramount importance today in Nigerian banks. The reason being that the control systems in any organization is a pillar for an efficient accounting system.
The need for the internal control systems in the organizations, especially banks, cannot be undermined, due to the fact that the banking sector, which has a crucial role to play in the economic development of a nation is now being characterized by macro economic instability, slow growth in real economic activities, corruption and the risk of fraud.
Fraud, which is the major reason for setting up on internal control system, has become a great pain in ...view middle of the document...
However, this study is aimed at verifying the conception that an effective and efficient internal control system is the best control measure for preventing and detecting fraud, especially in the banking sector.
The questions are: what can be said to be the cause or causes of the increasing rate of fraud in banks? What are the effects or damage has fraud caused banks, her customers? What is the impact of internal control in the prevention and detection of fraud in banks?
Objectives of the study: The objective of this study is to determine the impact of internal control, on the overall management of Nigerian banks. Also, to examine the effect of the internal control systems, when it comes to fraud prevention and detection. Summarily, the specific objectives are: to highlight the major causes of fraud and actors that contribute to the incidence of frauds in banks. To determine the problem of fraud and how to curb it, by. To make recommendation based on the findings?
Hypotheses tested: Two hypotheses are formulated and tested in this study.
H0 : The lack of a good internal control is not a major cause of fraud in banks.
H1 : The lack of a good internal control is a major cause of fraud in banks.
H0 : Banks with internal control systems cannot prevent the menace of fraud.
H1 : Banks with internal control systems can prevent the menace of fraud.
Scope of the study: The content of this research, should not be seen as being totally exhaustive of all possibly situations available in the Nigerian Banking sector on the theme of this study. This is due to the vast size of the banking sector and the boundless nature of the study under review. Therefore, the scope of this research is limited to the study carried out on Wema Bank branches in the South-Western part of Nigeria, particularly 50 selected branches. In the following states; Ekiti, Ondo, Oyo, Ogun, Osun and Lagos.
MATERIALS AND METHODS
The data, from which the information constitute the findings, were collected from fifty branches of Wema Bank Plc. This involved traveling to all the above mentioned states and asking the officers in charge, some prepared questions in which answers were provided accordingly. Data were obtained from both the primary and secondary sources, which includes; interview, structured questionnaire, journal publications, textbooks, newspapers, internet facilities. Secondary data are used to complement the primary data as the primary data is the original work.
Data captured for this study were analyzed through descriptive and inferential statistical methods. The descriptive analysis involves the use of percentages, tabulation and graphical presentation. While, the inferential statistical method involved the use of the chi-square.
Review of related study: A usual adage says prevention is better than cure; so also, people say that one should look before one leaps. These statements are more or less the equivalents of an internal control system. It is...