FRAUD MANAGEMENT AND INTERNAL CONTROL AS CORRELATES OF ORGANIZATIONAL EFFECTIVENESS (A STUDY OF NIGERIAN DEPOSIT MONEY BANKS)


FRAUD MANAGEMENT AND INTERNAL CONTROL AS CORRELATES OF ORGANIZATIONAL EFFECTIVENESS (A STUDY OF NIGERIAN DEPOSIT MONEY BANKS)            

ABSTRACT  

No organization can be effective towards the attainment of its desired goals without the formulation and enforcement of fraud management policies and standard internal control systems. The study examined fraud management and internal control as correlates of organization effectiveness in some selected Nigerian Deposit Money Banks in Enugu State. 450 staff across management, senior and junior level was purposively selected in Skye Bank, Access Bank, and EcoBank. The study made use of primary data via the administration of a questionnaire to generate data from the respondents. The data were analyzed using the descriptive statistic analysis and the Pearson correlation analysis. The results revealed that a positive and significant relationship exists between fraud management and organizational effectiveness (r=0.772; p<0.05); and between internal control and organizational effectiveness (r=0.896; p<0.05) in the selected banks. Based on this, the study suggests that internal control, both operational and financial should be employed in the management of every bank, to ensure that the bank’s assets are safeguarded, cash inclusive. This will go a long way in reducing fraud in banks to the barest minimum and ensuring effectiveness in banks’ operations.

      CHAPTER ONE   INTRODUCTION

1.1   BACKGROUND OF THE STUDY

Internal control, the strength of every organization has become very crucial in Nigerian banks. The reason for its high importance is that control system in any organization is fundamental to an efficient accounting system. The need for internal control systems in any organizations, especially in financial institutions such as the Deposit Money Banks, cannot be underestimated, based on the fact that the banking sector, which has an important role to play in the economic development process of a nation is now being invaded by macroeconomic instability, corruption, fraud etc.

Fraud, which is among the reasons for implementing internal control, has become pervasive in the Nigerian banking industry. It has tarnished the global reputation of the country, in which Nigeria was identified as a “fantastically corrupt nation” by the advanced world economies. Fraud has totally penetrated the Nigerian banking industry and that any bank with a weak internal control system, is highly susceptible to bank fraud.

The Central Bank of Nigeria reported that cases of attempted fraud in banks, between 2007 and 2015, have exceeded what was recorded between 2001 and 2006. The CBN report showed that a total of 771 cases of attempted fraud, involving 5.4 billion naira were reported as of June 2014. In 2015, 1,193 cases of fraud were reported involving 11.9 billion naira. This menace can be attributed to the weak internal control systems of banks. This clearly shows the picture of the pervasiveness of fraud in Nigerian Deposit Money Banks (Ahmed, et al, 2014; CBN, 2015).

Fraud management is now becoming an issue that top bank chiefs and regulators in the Nigerian banking industry face, due to the alarming rate of bank fraud. The implementation of internal control systems alone cannot totally address the issue of fraudulent activities that occurs in banks. Fraudulent acts are common in every organization, but more common in Deposit Money Banks because of the instruments of their trade. Banks are highly susceptible to financial fraud as a result of money and quasi-money instruments used in the process of their operations. The acts of financial fraud have defied solutions despite the implementation of internal control systems put in place in Nigerian Deposit Money Banks (Chibuzor, 2013). Internal control system sometimes negates the efficient operations, banks put in place to curtail cases of fraud, but it has not been totally successful in mitigating the number of funds that go into fraud. Thus, internal control systems have become both preventive and protective of banks’ financial resources, sometimes perceived as inimical to the primary operations of these banks

Most banks are litigation-shy as judicial officers find it uninteresting that the internal control process put in place by the banks was planned and done by their employees (Adetiloye, et al, 2014). In addition, where the banks are litigious, courts often sympathize with customers whose infractions resulted in larger losses of funds irrespective of whether collusion with an employee had existed. These cases are not funny outside the banking halls when financial fraud occurred and parties have to prove their innocence.

One of the reasons for the use and review of internal control systems in Deposit Money Banks is to minimize cases of fraudulent activities, to promptly detect any intended fraudulent acts before they are actually carried out. Fraud management and internal control are therefore pertinent predictors that determine organizational effectiveness, which implies the rate at which organizations achieve their desired goals.

1.2 STATEMENT OF PROBLEM

Managing fraud in Nigerian Deposit Money Banks is bedeviled with series of problems. Firstly, the inability of bank management to effectively implement the policy and operational procedures of banks, which has led to the ineffective establishment of the accounting system and the mode of accounting information has encouraged the perpetration of fraud.

Secondly, lack of adequate motivation incentives coupled with poor working conditions has resulted in fraud. Thirdly, weakness in the internal control systems such as lack of proper documentation of records has led to fraud. Fourthly, a poorly designed organizational structure, poor devolution of responsibility, non-compliance to directives have resulted in fraud.

Lastly, ineffective supervision, evaluation and monitoring of bank operations by bank management and regulatory agencies have also encouraged fraudulent activities.

1.3 OBJECTIVES OF THE STUDY

The objectives of the study are:

To examine the relationship between fraud management and organizational effectiveness in Nigerian Deposit Money Banks. To examine the relationship between internal control and organizational effectiveness in Nigerian Deposit Money Banks.

1.4  RESEARCH QUESTIONS

The study is aimed to provide satisfactorily answers to the following questions.

What is the relationship between fraud management and organizational effectiveness in Nigerian Deposit Money Banks? What is the relationship between internal control and organizational effectiveness in Nigerian Deposit Money Banks?

1.5  RESEARCH HYPOTHESES

Two hypotheses are formulated to guide the study, and they are stated as follows:

H01: There is no significant relationship between fraud management and organizational effectiveness in Nigerian Deposit Money Banks. H02: There is no significant relationship between internal control and organizational effectiveness in Nigerian Deposit Money Banks.

1.6  JUSTIFICATION FOR THE STUDY

The damage which fraud has done to banks is inestimable. Fraud has highly eaten the wool and fabric of Deposit Money Banks in Nigeria due to the nature of their operations. Even at that, internal control, which has been regarded as a panacea to fraud has not been fully embraced by the Nigerian Deposit Money Banks. Effective internal control and fraud management have been adjudged to be powerful tools to mitigate the incidence of fraud as well predictors of organization effectiveness, which is usually measured in terms of net profitability, wealth maximization, growth in industry’s market share, and expansion of customer base.

Therefore, in an attempt to stop this financial degradation, the research work was carried out. It is therefore believed that the study through its findings will be beneficial to all stakeholders in the banking industry. Also, the government will be informed on the need to adopt effective fraud management policies and internal control to minimize the incidence of fraud among public and civil servants. This study will be of immense usefulness to students in their prospective future undertakings in the areas of fraud management, internal control, and organizational effectiveness.

1.7  SCOPE AND LIMITATIONS OF THE STUDY

The study examined the nexus of fraud management and internal control as they correlate to organizational effectiveness in Nigerian Deposit Money Banks. The study placed a strong emphasis on Skye Bank, EcoBank and Access Bank in Enugu State, Nigeria.

In the course of carrying out the study, the researcher faced certain constraints, otherwise known as limitations, namely time constraint and financial constraint.

The time given to conduct a study of this magnitude is relatively short, given other academic engagement of the researcher. Also, due to limited funds, the study was able to cover three commercial banks in Enugu State namely: Skye Bank, EcoBank, and Access Bank.

Nevertheless, a robust and fact-finding study was carried out.

1.8                                          ASSUMPTIONS

The study is premised on the two assumptions, which are

That all respondents are a staff of the selected Nigerian Deposit Money Banks. That all the information given by the respondents is regarded as true and genuine devoid of sentiments or biases.

1.9   METHOD OF ANALYSIS

The study adopted the descriptive survey design in conjunction with the purposive sampling technique to select 450 staff of Skye Bank, EcoBank, and Access Bank in Enugu State. The study made use of primary data, through the administration of a well-developed questionnaire for data collection. The data generated from the respondents were subjected to the descriptive statistics technique- tables, frequency, percentage, and means and inferential statistics technique- Pearson Correlation Analysis.

1.10  DEFINITIONS OF TERMS

Deposit Money Banks: These are resident depository corporations and quasi-corporations which have liabilities in the form of deposits payable on demand, transferable by cheques or otherwise usable for making payments.

Fraud: A deliberate deception to secure an unfair or unlawful gain, mostly in monetary terms, or to deprive a victim of a legal right.

Fraud Management: Strategies and policies implemented by an organization to reduce fraud.

Internal Control: Process of assuring achievement of organization’s objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations and policies. It simply involves everything that controls risks to an organization.

Organizational Effectiveness: Ability of an organization to meet its set goals and objectives given the resources at its disposal.

.

FRAUD MANAGEMENT AND INTERNAL CONTROL AS CORRELATES OF ORGANIZATIONAL EFFECTIVENESS (A STUDY OF NIGERIAN DEPOSIT MONEY BANKS)



TYPE IN YOUR TOPIC AND CLICK SEARCH.






RESEARCHWAP.NET

Researchwap.net 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.net 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.net 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.net" and God bless you and your business! ."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "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.
  • "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 .
  • "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.