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Internal Control System Inigeria Deposit Money Banks Prospects And Problem
[A CASE STUDY OF UNION BANK PLC]
CHAPTER ONE -- [Total Page(s) 2]
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CHAPTER ONE
1.1 INTRODUCTION
Banks are very important in
nation; they are the backbone of the nation’s economy. Functions of the
bank according to ezeuiji (1997), including money creation, acceptance
of deposit from the customers, provision of facilities for domestic and
foreign remittance, help government in implementing monetary policies
etc.
According to Baner Jee (2001) define an internal control
system in whole system of control, financial and otherwise established
by the government in order to carry on business of the enterprises in an
orderly manner, ensure adherence to management policies safeguarding
the assets and ensure as far as possible the completeness and accuracy
of accounting records.
The function of internal control system
include, the detection or safeguarding of business asset but despite
the fact a that all bank have internal control system, there have been a
lot of problem in the banking sector. Ranging from bank liquidating to
defrauding the banks, many bank have been liquidated example of such
bank include savannah bank plc, national bank plc ( although it is now
being resuscitated) merchant bank Nigeria limited Nigeria internal bank
limited mention few
According to central bank of Nigeria (CBN)
annual report over (N16 billion) sixteen billion naira was defrauded
from the banking sector, also recently a bank was suspended from the
clearing system by the central bank of Nigeria (CBN) because of
mismanagement of banks resources expert have given reason as to what
causes banks distress. According to ezeudiji (1997) one of the causes of
bank distress is the internal control system problems include poor or
lack of proper authorization of loan and contract, poor loan recovery,
failure to collect proper collateral security, management override the
control e.t.c.
1.2 STATEMENT OF PROBLEMS
Internal control
system many organization, including bank is very important because it
ensure orderliness, in the organization, advance to management polices,
early detection of error and fraud, protection of assets e.t.c.
Internal
control system problem have led to closure of many banks in Nigeria,
ezudiji (1997) thereby making depositors customer to shareholder of such
bank to loss his or her shares. It is inimical to nations economy
because provide 90% of the capital employed in Nigeria. Due to the
following problem it leads to the following question.
Does bank
operation carried out in any orderly manner and follow the procedure
laid down. Does transaction recorded accurately and correctly.
1.3 RESEARCH QUESTION
This project has been able to provide answers to the following research questions.
1. What is internal system?
2. How does banks operations can be carried out in internal control system?
3. What are the functions of the internal control system?
4. What are the benefits of internal control system to the government, public, students and researchers?
5. Does transactions recorded accurately and correctly?
6. What cause banks distress?
7. What are the problems facing by internal control system?
8. What are the aims and objectives of internal control system to banks?
9. What is a bank and functions of a bank?
10. What is a fraud?
11. How to control fraud in banking sector
1.4 OBJECTIVES OF THE STUDY
The objectives of the study are:
I. To find out if there is internal control in union bank plc.
II. To investigate the effectiveness of internal control system in union bank plc.
III. To find out factors that affects internal control system in union bank plc.
IV. To suggest way to improve internal control system effectiveness in union bank plc.
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