Detection And Control Of Financial Frauds In Banking System; Problems And Solution
(A Case Study Of U.B.A)
Complete Detection And Control Of Financial Frauds In Banking System; Problems And Solution Project Materials (Chapters 1 to 5):
Banks deal essentially in cash financial instrument and other documents which are generally of a negotiable and easily transferable in nature. Hence it is very pertinent to say that the exposure of banks to both internal and external fraud is very great. This practice is very common to area involving cash, cheque and fraud transfer operation. Much research and thought are increasingly being directed towards the study of the causes of fraud in Banks because of its affects on Banking and the entire economy.
Recent study carried out by financial institutions training centre, Lagos, showed that causes of fraud reported annually between 1989 and 1998 was about 500 and the annual average money involved in attempted fraud was thirty-six money naira while the annual average lost to banks and customers was sixteen million naira. It may not be said to be an over statement that these figure may have risen geometrically upwards afterwards when about seventy eight percent of our banking operations are going to rural areas where poor institutional and infrastructural factors militate against efficient and effective checks on the branches in these rural areas.
Another problem facing our nations banking system is that of long cheques, frustrations, delays and disappointments being experienced in the banking halls by customers while either paying in or withdrawing their hard earned money. These associated problems and deficiencies have in recent years resulted to disencouraging growth of banking habit among the public. This our society has been turned into a mere “cash society”.
My personal experience as an accounting personal in one of the private companies and various articles I read on the problems of our banking system have aroused my deep interest in this project topic. It is therefore my pleasure to carryout this e on ‘detection and control of financial fraud in Nigeria banking system” using U.B.A plc as a case study.
Chapter one of this research work deals with introduction and over view on financial fraud.
The second chapter reviews the previous write-ups on the subject matter.
The third chapter assesses the work procedures on banks and focuses the loopholes inherent in there that aid fraudsters carryout the nefarious activities.
Chapter four of this work did on analysis of financial frauds by examine the methods used by fraudsters indefrauting the banking system. It establish that falsification of accounts and forged cheques and signatures ranked highest as means of perpetrating frauds.
An examination of categories of persons involved in the preparation of fraud reveals that bank staff are in the majority. This chapter also focuses on the final incidence consequence of bank fraud.
Chapter five discusses the general prevention techniques (solution) available to bank management in checking financial fraud, while the last chapter evaluates and concludes the with personal economic on the issue of financial frauds in our banking industry.
Title Page II
Approval page III
Dedication IV
Acknowledgement V
Table of contents IX
List of figure
Abstract VI
CHAPTER ONE:
INTRODUCTION
1.1 Background of the study 1
1.2 Statement of the problem 4
1.3 Objective or purpose of the study 5
1.4 Scope or delimitation of the study 6
1.5 Research questions 7
1.6 Hypothesis 7
1.7 Significance 8
CHAPTER TWO:
REVIEW OF LITERATURE
2.1 Who are the bank fraudsters 13
2.2 Fraud and fraudulent practice in banking services 16
2.3 The legal framework 20
2.4 What is fraud 25
2.5 Causes of fraud in U.B.A bank 29
2.6 The effects of fraud in U.B.A. Bank 31
CHAPTER THREE:
METHODOLOGY
3.1 Research design 33
3.2 Area of the study 44
3.3 Sample and sample procedure 45
CHAPTER FOUR
4.0 Data presentation and result 50
4.1 Summary of results/findings 50
CHAPTER FIVE
5.0 Discussion implication, recommendation 74
5.1 Discussion of result 75
5.2 Conclusion 80
5.4 Recommendations 84
5.5 Suggestions for further research 87
5.6 Limitation of the study 88
References 89
Appendices 91
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
There has been no single accepted definition of term “fraud”. Fraud in whatever form is limitless on classification. This is why courts and writers on fraud shirk or try to escape away from giving a decisive definition. Notwithstanding, the varied meanings attached to the concept of financial fraud the author addressed the subject with the following working definitions.
Oxford and Chamber dictionaries define fraud as a criminal deception, act of deceptive trick, cheating swindling person or thing that deceives.
Longman dictionary define fraud as “an act of deceitful behaviour for the purposes of gain which may be punishable by law.
In the mind of civil court of justice, fraud may be said to cover “all acts, omissions and concealments which involve a branch of legal or equitable duty trust or confidence justly reposed and injurious to another or by which an undue influence or available is taken off.
Brmifagbeni define banking fraud to mean an act or cause of deception deliberately practiced to gain unlawful or unfair advantages such deception directed to the detriments of another. The goes further to define fraud to mean depriving a person dishonestly or some thing which is his or of something to which he or would or might but for perpetration of the fraud be entailed.
Having closely studies these approaches to definition to fraud especially from the banking perspective. One may correctly see bank financial fraud as a deliberate act by an individual or group within or without the Nigeria banking system to cheat, swindle, deceives or manipulate in other to disposes the banks depositors/shareholders of their funds.
Therefore fraud and forgone in banking transactions can be perpetrated through falsification of entire in accounts of customers with a view to take advantages of the excess proceed.
Despite several definitions of frauds, the author believes that the ones so far given are rater appropriate, advantages and inspiring for the purpose in which the research work intends to achieve. This is because, they contain the basic elements of fraud which include that:
a) There must be decent or deception directed to the detriment of another or entirety.
b) A false representation has been made knowingly or without belief in its truth or recklessly, carelessly, whether it true or false.
c) To obtain damages for deceits, it must be proved that the defendant intended that the plaintiff should act on it an suffered damages in consequences.
The position of banking system in our economy cannot be over emphasized. They act as the ‘conduct pipe’ through which all the financial transactions pass. However, fraud has proved a serious bottleneck to the proper functioning of the roles of the banking system to the Nigeria economy. People are beginning to get worries and sooner than later may loose confidence in our banking sector due to mainly the very increasing incidence of fraud in our today’s banks. Banks as the store house of the public funds and properties should be on trust not fraud.
1.2 STATEMENT OF PROBLEM
The frequent cases of financial fraud in many financial institutions in our country is now taken as the utmost concern to financial experts and micro encomiasts. This has also initiated that task of seeking solutions to eliminate its occurrences. To some banking experts, the issue of fraud is an internal vice in the Nigeria banking system. They argue on this because a good number of fraud occur among our banks without the knowledge of outsiders even where the public is aware it doe’s not effect the rate at which customers withdraw or deposit money.
These experts are inclined to believe this because the nation is under-banked, the populace are at no option but to use the available banks like especially the foremost and well established banks like UBA plc even if there are glaring inefficiencies in the operations incompetence and laziness among most banks staff give birth to fraud.
Fraud has paralysed the roof, the foundation and creditability of our banking system. Just pick up any national daily or from police record and you will be alarmed at the extent and magnitude of bank fraud in Nigeria banking system. Many banks have gone on distressed. Therefore the researcher is aiming at finding out if there is any significant effect or solution to financial fraud in the Nigerian banking system which has to offer to these deficiencies aforementioned with special reference with UBA plc station road, Enugu.
In summary, the major problems of this study are as follows:
a) The incessant/consistent casa of financial fraud
b) Weakness this has attributed to banking industry prior to the introduction of effective control of financial fraud.
1.3 PURPOSE OF THE STUDY
This research work is general set towards ascertaining the effects finical fraud have had on Nigeria banking system or banking industry since its inception in the Nigeria industry .furthermore, the study is;
1) To determine if any lost of bills the banking have in relationship with the financial fraud in banking and to what extend.
2) To examine the facts contained in the detection and control financial fraud issued.
3) To research into the reason why people involve in financial fraud
4) To diagnose the banking procedures with a view to fishing out loopholes and suggesting way of plugging them.
5) To examine the various management and government controlling devices geared towards alimentation or checking financial fraud in our banking system.
6) To recommend solutions that may help in checking financial fraud in our banking system.
7) To identify the problem banks face as a result of the introduction of financial fraud.
1.4 SCOPE OF THE STUDY
This research work on detection and control of financial fraud is with a particular reference to UBA plc station Road (okpara Avenue) Enugu and its cover facts on the issue. This research work has a lot of difficulties. Firstly, top officials of bank were reluctant to give away relevant statistical data on financial frauds that occurred in the organisation.
RESEARCH QUESTIONS;
Owing to the need for a compressive study of this topic, the researcher demands it necessary and reasonable to postulated the following research questions. This research has no doubt that the awares to these questions will help him to draw conclusions and recommendations are necessary.
The following question are the research questions
1) What is the commonest causes of financial fraud, can this be checked and controlled.
2) Has the financial fraud in the banking industry helped to impede problems towards banks failure (distressed)
3) What measure do the bank adopt to check financial fraud.
4) To what extend can the customers wait before being attended and assume they are being attended promptly, do they have adequate banking services available to them.
1.6 RESEARCH HYPOTHESIS
To fulfill the above outlined purpose, the research declares the following propositions.
Ho1: Most financial frauds have not succeeded because of the complexity of banking activities.
Ha1: Most financial frauds have succeeded because of the complexity of banking activities.
Ho2: Auditing and investigations are not indispensable weapons in the efficient management of the banking industry.
Ha2: Auditing and investigations and indispensable weapon in the efficient management of the banking system.
Ho3: The problem of financial fraud is not limited to UBA station Road, Enugu nor to banking system as a whole but to the society.
Ha3: The problem of financial fraud is limited to UBA station Road, Enugu nor to banking system as a whole but to the society.
Ho4: Commercial banks do not place any value on the auditors reports.
Ha4: Commercial banks place adequate value on auditors reports.
1.7 SIGNIFICANCE OF THE STUDY
This study is intended to highlight the indispensable position of an auditor and those concern to work in an enviable financial houses like banks.
This project will equally to be of immense help to other establishments and organisation both in public and private sector. The dive need to establish a visible internal auit unit as a means of internal control should not be over-emphasised.
It is helped that the management of UBA of Nigeria plc station road, Enugu in particular should use the findings of this research to equip the audit the audit department (i.e audit department and inspection). This department being the watch – dog of bank should be given more teeth to bile than more banking prospective investors, promoters, shareholders would find this study very – useful. This will serve as an eye opener to them on what it takes to invest in banks.
This will also help readers and those who may wish to make reference on the topic of study may be while undertaking similar research work.
Government agencies can install adequate internal control measures to avert the incessant frauds and embezzlement rampant in financial houses, ministries and parastals today.
For prospective auditors and accountants, it is a material of reading. They should be able to understand what is fraud and where to audit, how and why auditing and internal control system is an invertible ambient of the business system.
The introduction of Detection And Control Of Financial Frauds In Banking System; Problems And Solution should start with the relevant background information of the study, clearly define the specific problem that it addresses, outline the main object, discuss the scope and any limitation that may affect the outcome of your findings
Literature Review of Detection And Control Of Financial Frauds In Banking System; Problems And Solution should start with an overview of existing research, theoretical framework and identify any gaps in the existing literature and explain how it will address the gaps
Methodology of Detection And Control Of Financial Frauds In Banking System; Problems And Solution should describe the overall design of your project, detail the methods and tools used to collect data explain the techniques used to analyse the collected data and discuss any ethical issues related to your project
Results should include presentation of findings and interpretation of results
The discussion section of Detection And Control Of Financial Frauds In Banking System; Problems And Solution should Interpret the implications of your findings, address any limitations of your study and discuss the broader implications of your findings
The conclusion of Detection And Control Of Financial Frauds In Banking System; Problems And Solution should include summarize the main results and conclusions of your project, provide recommendations based on your findings and offer any concluding remarks on the project.
References should List all the sources cited in Detection And Control Of Financial Frauds In Banking System; Problems And Solution project by following the required citation style (e.g., APA, MLA, Chicago).
The appendices section should Include any additional materials that support your project (Detection And Control Of Financial Frauds In Banking System; Problems And Solution) but are too detailed for the main chapters such as raw data, detailed calculations etc.