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Effective Internal Control Of Frauds In Banks A Case Study Of Commercial And Merchant Banks In Nigeria
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5.2 RECOMMENDATION
The researcher would wish to make the following recommendations based on the findings made in analyzing the data collected.
a. Ensure effective internal control system.
It
is not enough to install an internal control system, but it is
important that the system, is made to be effective. From the data
collected we have seen that all the banks in the banking industry have
internal control systems, but most of these systems are only fairly
effective.
Notable is the fact that even as fairly effective as the
respective respondents indicated of their system, they still felt that
theirs is even more effective than those of other banks in the banking
industry. This lack of effectiveness of the internal control system led
in part to the incidence of fraud in the banking industry. Management
must always follow up to see whether the installed system is working as
it should.
b. Before employing any person to work in the bank the
should properly screen the individual so as to make sure that the
individual has no criminal records, nor does he have some criminal
tendencies.
c. Banks should review their motivation
packages with a view to increasing the motivation of their staff. The
remuneration given to staff should be reviewed, and employing already
trained staff.
This could be because those in the management carder
of those banks, were people who rose through the ranks, and would not
want to employ people more qualified than themselves.
The result
therefore is that these employees are paid very little and would easily
be tempted to perpetrate fraud. Virtually all the banks in the banking
industry had internal control system in their banks. This fact was shown
by the foct that all the respondents in the sample indicated that they
had external control system.
Internal control system in most of the
banks were only fairly effective. By its effectiveness the system could
go a long way in aiding to check bank frauds. If the management of these
banks review the internal control system in the banks with a view to
ensuring that they are effective then the incidence of fraud could be
reduced. Management should always ensure that there is a separation of
these responsibilities or duties which would, if combined enable one individual
to record and process a complete transaction. This is because the
segregation of duties reduces the risk of intentional manipulation or
error, and increase the element of checking. Such functions that need
separation include authorization, execution, custody, recording etc.
They
should borrow a leaf from the merchant banks. This is because paying
somebody commensurately will deter him from falling into the temptation
of fraud.
d. Bank should strive and agitate for a legislation that should enable them prosecute cause of fraud and forgeries privately.
This
is because it has been noticed inefficiency of the police in the
prosecution of bank frauds has encouraged more people to engage in the
practice.
e. Banks should acquire for use the standardized
computer cheque book than can encode characters sort documents by
various codes and list document read encoded that are sorted or
unsorted.
The central bank introduced this compute since July 1989. The use of computer will help reduce incidence of bank frauds.
f. In addition to the standardized computer cheque book mentioned above, the bank should strive to get computerized.
Computerization
reduced the amount of delay of customer – time as well as ensuring that
accords are stored both in the magnetic deices flexible diskets, as
well as printouts. A destruction of one of these records will not
succeed in wipping the records out.
g. Staff should be rotated
periodically and should not be left on one position for too long a
period, in order to forestall the possibility of exploring operational
loopholes and short comings for personal gain.
h. The security
system of banks should be tightened and made more effective, security
men should ensure that only people who have guanine business to transact
in the banks are allowed into the banking halls.
i. Proper
training of bank staff should be embarked upon to broaden their banking
knowledge. Inexperienced staff should never be, posted in sensitive
areas,
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ABSRACT - [ Total Page(s): 1 ]ABSTRACTEver since banking evolved, banks have come to be seen as one of the few places where one’s treasures can be kept without fear of theft. As a result bankers all over the world were and still are seen as repositories of trust and fidelity.However, in the recent past, the integrity of bankers and the banking industry in Nigeria have come into question. An epidemic called fraud has hit the banking industry. This fraud has led to the loss of confidence by the public in banking institu ... Continue reading---
APPENDIX A - [ Total Page(s): 1 ]APPENDIX IICOMPUTATIONS FOR HYPOTHESIS ONEThe profit of your bank before this particular period as in (4) as compared with that of the period, did it show(a) An increase? (b) Economic Recession(c) Others (specify) (d) Don’t knowFrom experience, what type of bank has more incidence of fraud?(a) Commercial Bank (b) Merchant Banks(c) Development banksState why brieflyDo you have an internal control system in your bank?(a) Yes effective (b ... Continue reading---
QUESTIONNAIRE - [ Total Page(s): 1 ]QUESTIONNAIREHave you ever learnt of fraud in the banking industry?(a) Yes(b) No(c) Don’t knowHow regular have you had cases of and in our bank?(a) Always(b) Fairly always(c ) Sometime(d) Seldom (e) Not at allFrom your experience, which category of employees engage, more in fraud?(a) Management (b) Supervisors(c) Clerks and Cashiers (d) Messengers, Drivers etc.In your own opinion, do you think that fraud in your bank is usually a ... Continue reading---
APPENDIX C - [ Total Page(s): 2 ]APPENDIX 4COMPUTATIONS FOR HYPOTHESIS THREE ... Continue reading---
APPENDIX B - [ Total Page(s): 2 ] ... Continue reading---
LIST OF TABLES - [ Total Page(s): 1 ]LIST OF TABLE PAGE2.1. Returns of commercial banks on frauds and forgeries, 1989.2.2. Return of merchant Banks on frauds and forgeries, 1989.2.3. Return of all banks on frauds and forgeries, 19892.4. Number of commercial banks operating in Nigeria as at Dec. 1994.2.5. Number of merchant banks operating in Nigeria as Dec. 19942.6. Typology of frauds3.1. Failed banks in as at 19943.2. Response rate to questionnaire4.1. Knowledge of frauds ... Continue reading---
LIST OF FIGURES - [ Total Page(s): 1 ]LIST OF FIGURES4.1. Regularity of Bank frauds4.2. Category of staff engaging more in frauds4.3. Effect of fraud on profit of banks4.4. Effectiveness of internal control systems in banks4.5. Effectiveness of respondents bank with other banks. ... Continue reading---
APPENDIX D - [ Total Page(s): 2 ]APPENDIX 5COMPUTATION FOR HYPOTHESIS FOUR ... Continue reading---
TABLE OF CONTENTS - [ Total Page(s): 1 ]TABLE OF CONTENTPageTitle page Certification Dedication Acknowledgment Abstract Table of content List of table CHAPTER ONE1.1. Introduction 1.2. Statement of problems 1.3. Objective of the study 1.4. Hypothesis 1.5. Significance of study 1.6. Limitations and scope of study CHAPTER TWO2.0. Literature review 2.1. Restatement of the study 2.2. Meani ... Continue reading---
VITA - [ Total Page(s): 1 ]VITADIMEJESI, TIM IFESINACHI was born to Mr. and Mrs. Okpalanozie Dimejesi hail from Uga in Aguata Local Government Area of Anambra State. Being one of the nine surviving children of the family, he was born after the Nigeria civil war in Uga in Aguata Local Government Area Anambra State in 1993.Dimejesi Tim Ifesinachi was employed in Union Bank of Nigeria in 1984 as a clerk and after a year with them, he got admitted into the University while in School, he had done his industrial training progra ... Continue reading---
CHAPTER ONE - [ Total Page(s): 2 ]CHAPTER ONE1.1. INTRODUCTIONBanks, especially commercial banks, are the major mobilizers of saving in any economic system by offering savings facilities to the public. Some of the functions of the banks include the acceptance of deposits from the public and channeling such deposits to the deficit sectors of the economy who are in need of inventible funds. These two related and dependent functions bring the banks face to face with the public who come to obtain their services. This implies t ... Continue reading---
CHAPTER TWO - [ Total Page(s): 12 ]TABLE 2.5NUBMER OF MERCHANT BANK OPERATING IN NIGERIA AS DECEMBER 1994.1. Abacus Merchant Bank ltd2. A’B C Merchant Bank Nigeria ltd3. Afrbank International ltd4. Alpha Merchant Bank ltd5. Centre point Merchant Bank ltd6. Century Merchant Bank ltd7. Citi Trust Merchant Bank ltd8. Comet Merchant Bank ltd9. Contintal Merchant Bank ltd10. Cown Merchant Bank ltd11. Devcon Merchant Bank ... Continue reading---
CHAPTER THREE - [ Total Page(s): 2 ]3.4. VALIDITY AND RELIABILITY OF MEASURING INSTRUMENTSValidity of a measuring instrument refers to the degree to which an instrument (test) measures what it is supposed to measure, while reliability refers to the degree to which an instrument (test) consistently measure what it is supposed to measure.In the present study, both validity and rdlianility of the measuring instruments have been ensured.1. The questions contained in the questionnaire have been structured to elicit the exac ... Continue reading---
CHAPTER FOUR - [ Total Page(s): 15 ]We can represent this data in a pie chart as shown below: Figure 4.3 category of staff congaing more inForm the above data, most of the respondents were of the view that clerks and cashiers were the category most prone to engage in fraud. This is not surprising because the cashiers for instance, handle raw cash over the counter and the temptation to commit fraud will come to them more than other that deal with ordinary papers. Furthermore, for the fact that a majority of people in their cadre re ... Continue reading---
REFRENCES - [ Total Page(s): 2 ]REFERENCES1. Prof G.O Nwankwo Bank management principles and practice (Matt house pushing UK limited 1991)2. Achebe C. the trouble with Nigeria.3. Fourth Dimension publishing company, Enugu, 1985,4. Adegbite S.I Fraud in Banks†Nigeria institute of Banker (landmark publications Lagos 1986)5. Adekanye F. “fraud in Banking transactions. The Nigerian Bank Vol. 6 No 1 19866. Ademji O.A the law and practice of banking in Nigeria (University of life pres ... Continue reading---
