Accounting Project Topics

Effective Internal Control as the Basis for Prevention and Deduction of Fraud in Bank in Nigeria (a Case Study of Afribank Plc Enugu)

Effective Internal Control as the Basis for Prevention and Deduction of Fraud in Bank in Nigeria (a Case Study of Afribank Plc Enugu)

Effective Internal Control as the Basis for Prevention and Deduction of Fraud in Bank in Nigeria (a Case Study of Afribank Plc Enugu)

Chapter One


The principal purpose of Lilie’s study is to identify and explain how internal control Audit could be used to check fraud and detect fraud. Using Afri Bank plc and a case study

However, in more specific terms, lies study scale to

  1. Identify to what extent adequate internal control is Afribank Plc
  2. Fund out the extent of the ineffective way of banking operation.
  3. Determine the overall loan losses and increasing bad debt portfolio

Chapter Two


This chapter review literature related to theme and sub theme of the study major idea of this section are group and presented under the following sub heading

  • Organization of internal control
  • What is fraud in banking industry
  • Sources form and caused of fraud in our bank
  • The effects and danger of fraud in our banks.
  • The law relating to and the legal process of protecting fraud in banks.
  • Common fraudulent practices
  • Technique off internal control
  • The plan of the bank
  • Authorization Recording and custody procedures
  • Managerial supervision and reviews
  • Audit Quality control. Nature and content
  • Need for Audit Quality control Measure
  • The Main objective of audit Quality control
  • Summary of relates reviewed literature



Management in the new millenium will be saddled with greater challenges than it has been in the case of past. The are of easy money or armchair banking witnessed in bank as at 1980 is gone. What are likely to be experience in this new millennium will be uncertainty and lack of stability in the banking environment. Before the advent of large business concern, businesses were mainly carried on individually. In other word., the  owner was his own internal Adulator. However with present complexity. It is advisable that he has a continuing appraised of work a s the hasty of his employee.

In this view Archibony EE (1992) increase in regular activities, the trend towards decentralization and greater geographical dissension coupled with continuos change capitalization and operating guideline diversification of product, computer  and other  technology call for  outstanding performance by all level of management. These problem he, continued, contributed to increase the burden of manger’s. Consequently, management can not eleegate its dusties, management has  t urn to the control specialist, the  Auditor for assistance in maintaining surveillance over the management control network

According to ovuate porie (1994) Internal control as a serious processes and technique through which an organization own employees ascertain for the management by means of first hard on the job deservation weather established  management control are adequate and effectively maintained, records  and report financial accounting  and other wise reflect the octual operation and result accurately  and promptly and each division or unit is carrying out plans, policies and procedure for which it is responsible.

In the word of Omotosho (1992) the internal Auditor function as top management chief intelligent officer and chief executive, principal Adiver. It is the internal Auditor  dusty to  provide top management will the making and measuring  cooperate  performance,  he break his confinement to budgeting ,  cashflow, panning and expenses budgeting and planning and  expenses, budgeting and play the larger role of controlling  entire bank operation and activities  geared toward achieving cooperate goal and objectives as determined in the mission vision and message  set out by the representative  of the owner the bank, that is board of directors.  It is pertinent at this juncture to  say that Auditing is defined by the institute of chartered Accountant of  Nigeria (ICAN) is an examination of by an auditor of the exidence from, which the final revenue  account and balance sheet of an organization has been prepared in order to ascertain that they present a true and fair view of the summarized transaction for the year ended, enabling the auditor report them there on. In the word of word of Adeigbe (1984) plans for operation of internal control should be designed tentatively before establishing the department of internal control Audit. He asset that at early stage the advantage of such a division to bank as well as its initial one the cost of maintaining the department  does not out weigh considerably the benefit accusable. It is note worthy that internal control play an essential function in fraud detection and control. The form internal  play an essential role in fraud prevention it intend to make a clear that  this is an activity carried on within the organization using it own employee Adeigbe (1999) how ever opined that internal control is not a  substitute for proper evaluation of the  overall control present in a company. The English illustrate detionary defined fraud as a deceitfulness, criminal deception and using false representation to obtained an unjust advantage.  Again Fagbemi (1986) defined fraud  as an act  of depriving a person dishonesty of  some thing to which he or she would be entitles.

Aderigbe (1999) indentified the following as the factor that could contribute to fraud.

  1. The ease with which the particular asset can be consented after they are appraise such as cash, securities, good  purchase for resale
  2. Independent control of individual over asset (That is where there is inadequate segregation of duties
  3. Possibility of refusing to comply with laid down policy,  procedure without any penalty or sanction and.
  4. Collusion between interacting agents changed with the duties responsibilities to safe guard, protecting the asset and other interest of the organization.

For example an official driver in bank may take petrol reciepl from petrol station not actually sold to him and make clain on it from bank.




This chapter deals will research procedure described under the following heading

  1. Research design
  2. Area of study
  3. Population of study
  4. Sample and sampling
  5. Instrument for data collection
  6. Validation of research instrument
  7. Reliability of research instrument
  8. Reliability of the research
  9. Method of administration of research instrument
  10. Method data analysis


This study was survey descriptive research performed as a case study on  Effective internal control as a basis for prevention and defection of draud as applicable to Afri bank plc. Consequently  this condition survey appraised the various method of internal control Audit in order to enhance  effectivence in fraud control and detection


This research is a case study of Afri bank plc Enugu was camed out at the man branch (head quates) of this  bank located in Ogui road


The population of  this study consisted of all the staff under various department existing at Afri bank plc Enugu main office. The department inducting the numerical staff strength is shown below.



The chapter dwells on the presentation and analysis of data collected from the study. The method of analysis was explain in chapters three




This chapter presents the discussion of the result of the study, conclusion, implication funding, recommendation, suggestion for further research and limitation of study


To what extent are the banking operation effective at Afri Bank plc?

The result of this research question (tablet) indicate that both the senior and junior staff of Afri bank plc Enugu mean expressed their opinion as show below

Both of them SS and Js agreed this the four strategies comprising strong capital base prompt and courteous alternation to customers safety of customer deposit and trust and technological advancement are all applicable at Afri bank geared toward effective delivery service.


How adequate s the altitude and perception of banking operation transations? The result of this research question (table 2) cleany depict that both cadre of staff senior and junior as shown below expresses their opinion

Both SS and JS agreed  that by providing 5 minutes transaction time customer oriented services, saving deposits account and other financial service provision of  various from of loan and advances and mortgage services and the availability constancy services help to ensure that their attitude and perception of banking operation transaction at Afri bank remained adequate


To what extent are loan losses and bad debts occuring in Afri bank plc?

The result of this research question (table3) indicated that both the senior and junior members of staff of Afri bank expressed their opinion as analyzed below

Both cadre of staff (junior and senior) agreed that proper assessment of the attributes of credit application using “ SCS of credit investigation of the credit application via reference,

Physical possession of them of security and signed irrevocable authority to sell as issued by the debtor to the creditor (Afri bank) and the effective data collectors policy are strategies adopted to ensure bad eurrent general  low level loan loss and bad debts in Afri bank


The following conclusion have been drawn from the relevant major finding of the study

  1. That some of the strategies installed in Afribank to ensure effective banking operation include strong capital base prompt and courteous attention to customer, safety of customer deposit, and trust form major base of internal control and  technology advancement
  2. The bank adopt a style of providing only 5 minute transaction time customer oriented  financial service various form of loan and advanced and availability of constancy services to the public. These are geared toward ensuring that adequate banking operation transaction are provide to customer
  3. Again it was observed that adequate steps are always taken by the bank to discourage loan losses and bad debt such as through proper assessment of the attribute of loan appliance investigation of credit applicant physical possession of collateral and effective debt esilection
  4. As at present the extent to which these strategiesa are being applied in the bank is satisfactory
  5. In a nutshell the above strategies reveal the high standard of internal control put in a place to ensure effective management of resources at Afri bank plc.


The following recommendation have been made in the light of finding and discussion will relevant major conclusion which have been highlighted in 1,2,3,4,5, in this section there is emergent need to suggherst the following action polices and steps geared toward ensuring the general improvement of internal control Audit function and effectiveness in banking management


SYSTEM- Internal control involve all type of check and balance both operational and fincinal employed by management to ensure a safeguard the organization asset.  There fore, specific responsibilities should be defined for identifiable type of duty. There should be check and balances


Each procedure should be reduce to writing. Bank should have manual of procedure in order to promote efficiency among staffs, it is absolutely essential for staff to take their  annual holiday during which a new hand must be allowed to stand in on relief duty. Except cases of collusion any misdemeanor are usually exposed or any form of intended fraudulent practiced are brought to light. Also employee should be rotated on a job.


Should try as much possible to have an internal control Audit department. It  has been butlers by finding of this study that complete absence of internal control Audit service is one major cause of frauds to enhance its effectiveness of control the internal control Audit section should  be responsible by a qualified account . Additionally he should be responsible only to the managing director or higher authority of the bank

An internal Auditor should be independent and must not be affair to exercise his authority


Attention to cash

Experience has shown that cashier and mean culprits in perpetrating fraud in banking sectors this their recruitment should not be bias it should be through. This is the key post in any organization possibly proper security or quartette should be requested from the applicant before being assigned to the post of cashier. In addition banks should  arrange for a fidelity insurance to cover the activity of cashier during accounting period usually equally cash in transit is another insure cover which a bank should posed in order to cover the risk of loss of any cash in transit space movement


In addition the adequate record demand by companies and Allied matter degree 1990 the following are generally required record to be kept

(a) Record must be sufficient to show and explain the bank transaction

(b)   Record should disclose with reasonable accuracy at any time the financial position of the bank at any time and record must be such that enable the director to ensure that the balance she or profit and loss account proponed by them gives, in the case o balance sheet a turn and fair view of the company stale of affair and in case of profit and loss account and true and fair visas of companys profit and loss account


  • Ader,bige, P (1984) The important of internal /Audit function AnExperimental investigation    . Ibaden university press limited.
  • ADEWUMI NNE (1986) Fraud in Bank an over view of Nigerian institute of bank Lagos branch; land work publisher
  • Adewanye Femi (1986) Fraud in banking transition The Nigerian bank vol. 5 No1 p7-15
  • Archibony EE (1992) The bank inspector Ibandan                                                                     New barn publisher
  • Asukwo PE (1999) Bank fraud A look at the Nigeria cleaning system Ibandan new born publisher
  • Fagbemi Bunmi Fraud and law (1986) the Nigerian banker vol. 6 no1
  • Fagbemi O.A  (1986) Fraud in banks: The law and legal process. Journal of Nigeria institute of bankers Lagos.
  • Brierley : P. (1984) Quality control for Auditing New York Ronal per company
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