INTERNAL CONTROL AND FRAUD DETECTION IN THE BANKING INDUSTRY (A CASE STUDY OF GUARANTEE TRUST BANK PLC)
BY
OGUNDELE GBONJUBOLA
06271184
BEING A RESEARCH PROJECT SUBMITTED TO THE DEPARTMENT OF ACCOUNTING, FACULTY OF MANAGEMENT SCIENCES, UNIVERSITY OF ABUJA, ABUJA, NIGERIA
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS
FOR THE AWARD OF BACHELOR OF SCIENCE
(B.SC) HONOURS DEGREE IN ACCOUNTING
JANUARY, 2011
DECLARATION
Apart from references of other people’s work which were fully acknowledged, I hereby certify that this research work was wholly done by me under the guidance of my supervisor, Mallam Sani Gurowa of Department of Accounting, University of Abuja, Abuja, Nigeria.
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Data captured for this study, were analyzed through descriptive and inferential statistical methods. The descriptive analysis involves the use of percentage, tabulation presentation. While the inferential statistical method involved the used of the chi-square. The functions of fraud prevention, detection and control are interwoven, as the three works together to eliminate fraud and fraudulent tendencies. Therefore, internal control is highly significant in fraud detection and preventions in banking sector.
TABLES OF CONTENT
Page
Title page i
Declaration ii
Certification iii
Dedication iv
Acknowledgement v-vi
Abstract vii
Table of content viii
CHAPTER ONE
INTRODUCTION 1
1.1 Background of the study 1
1.2 Statement of the problem 3
1.3 Justification for the study 4
1.4 Research hypothesis 5
1.5 Scope of the study 6
1.6 justification of the study 6
1.7 Significance of the study
1.8 Definition of terms 7 CHAPTER TWO
LITERATURE REVIEW 10
2.1 Introduction 10
2.2 Meaning of Internal control 10
2.3 Component / type of internal control 14
2.4 Objective of internal control 17
2.5 Essential element of internal control 18
2.6 Importance of internal control 20
2.7 Practical application of internal control 22
2.8 Types of bank frauds 23
2.8.1 Methods by which fraud can be
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Through FRA, an organization can identify where fraud is most likely to occur, take proactive measures to implement and reduce the chance that it could happen (Wells, 2014). The FRA framework is also of prime interest to management of an organization because it helps staff members and managers in assessment of the reliability of existing internal controls. An effective internal control system helps to prevent and detect fraud. However, in a dynamic system, the internal controls must be revaluated constantly to check for weaknesses. With FRA, an organization can determine whether an organization needs to implement counter measures to prevent fraudulent activity (Wells,
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For a business to limit fraud capabilities, it is important to have a strong set of internal control. “Internal control is the organizational plan and all the related measures designed to . . . safeguard assets, encourage employees to follow company policies, promote operational efficiency and ensure accurate reliable accounting records” (Miller-Nobels, Mattison, & Matsumura, 2016).
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This project has been fully supervised, read and approved as having satisfied the necessary conditions for the award of Bachelor of Science Degree in Banking and Finance of the Department of Banking and Finance, University of Abuja.
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