Tag Archives: Appraisal

APPRAISAL OF THE ROLE OF INTERNAL AUDIT IN THE MANAGEMENT OF FRAUD IN ZENITH BANK KADUNA

APPRAISAL OF THE ROLE OF INTERNAL AUDIT IN THE MANAGEMENT OF FRAUD IN ZENITH BANK KADUNA

ABSTRACT

The aim of the study is to appraise the role of internal audit in the management of fraud with special emphasis on Zenith Bank Plc. The main objective of this study is to ascertain the role played by internal audit in the management of fraud. The specific objectives include; (1) to examine the role of internal audit in the detection of fraud, (2) to examine the role of internal audit in the prevention of fraud and (3) to examine the role of internal audit in the control of fraud. The study used chi – square for the study. The study used simple survey while the data used was primary data. The study found out that internal audit has helped in detecting cash theft. Internal audit has helped in detecting cases of money laundering by bank staff and internal audit has aided in detecting illegal transactions committed in the bank. The study recommended that management should establish and implement periodic review of internal audit performance to ensure that its performance and value to the Institution is maximized and to ensure compliance with appropriate standards and guidance.

 

CHAPTER ONE

INTRODUCTION

1.1     Background to the Study

At the heart of business establishment, is the audit function; which is evidenced by the fact that all other departments are linked with the internal audit department. The importance of internal audit system cannot be overemphasized where a variety of requirements, processes that are both manual and information communication technology-based (ICT) are used.

Organizations such as the banking sector have recognized internal audit function as a tool for ensuring effective workings of the internal control system. Okolo (2011) describes the internal audit function as an aspect of control mechanism, within a business, manned by specially assigned staff.

In today’s volatile business environment, firms in Nigeria face a wide array of complex business challenges. These challenges come in the form of regulatory compliance, litigation, competitive market pressure, changing technology, investors demand, corporate governance, business ethics and accountability. In a business environment, anyone given the opportunity and the environment can commit fraud. The internal audit staff, in a non-automated or particular environment, may be ill-positioned to investigate fraud. It is established that an internal audit staff who is professionally certificated with the right motivation and training can contribute to the efficiency and effectiveness of the audit department.

Oseni (2014) reveals that an effective internal audit function reduces overheads, identify ways to improve efficiency and minimize exposure to possible losses. According to Lavy (2008), the internal audit provides an independent and objective appraisal of activity for management. Katz (2012) summarizes the core activities of the internal audit as analysis of data, recommendation,counsel and information activities. He argues that these activities operate to accomplish the mission of organizations. Young (2010) finds out that the internal audit functions assist management in achieving organization’s financial and operating goals by evaluating controls, identifying weaknesses, and providing recommendations through complete and unrestricted access to records, property and personnel.

However, in Nigeria, the audit function in the banking sector has not been fully tapped; consequently, cases of errors and intent to defraud and other fraud cases exist in the industry. It is therefore no wonder that the distress in most banks reflected lack of effective control mechanism of the audit function. The experiences of failed banks in Nigeria, have called for the reinforcement of internal audit and the strengthening of the controls system. This becomes relevant, given the fact that the banking sector is critical to the survival of any economy. In the light of the above, this study critically appraises the role of internal audit in the management of fraud.

1.2     Statement of the Problem

          The duty of detecting fraud and irregularities lies with the management. This could only be done through an effective and efficient internal audit system. But even with the presence of the internal auditor some problems are still inherent in the Nigerian banking sector that interferes with goal attainment. These include:

  1. Physical cash stolen while signatures are forged in cheques also to steal cash. Out if untimely or inappropriate audit, there are cases of monetary losses due to forged cheques.
  2. Assets are either misappropriated or not accounted for. Due to ineffectiveness of internal auditors cases of assets misappropriation sometimes occur in the banking sector.
  3. Frauds perpetuated are only being discovered after a long time. Internal auditors can decide not to reveal the fraudulent activities of staff or management. Such actions are mostly discovered by external auditors after a long while.

Due to the above enumerated problems, there have been cases of errors and intent to defraud and other fraud cases which exist in the banking sector. This has been mainly as a result of lack of effective control mechanism of the audit function.

1.3     Objectives of the Study

The broad objective of this study is to appraise the role of internal audit in the management of fraud with special emphasis to Zenith Bank Plc.

The specific objectives include the following:

  1. To examine the role of internal audit in the detection of fraud in Zenith Bank Plc.
  2. To examine the role of internal audit in the prevention of fraud in Zenith Bank Plc.
  3. To examine the role of internal audit in control of fraud in Zenith Bank Plc.

1.4      Research Questions

The following questions are stated for this study:

  1. To what extent does internal audit aid in the detection of fraud in Zenith Bank Plc?
  2. To what extent does internal audit aid in the prevention of fraud in Zenith Bank Plc?
  3. What is the role of internal audit in the control of fraud in Zenith Bank Plc?

1.5     Research Hypotheses

The following hypotheses are formulated for the study:

HO1:   Internal audit has no significant role in the detection of fraud in Zenith Bank Plc.

HA1:   Internal audit has significant role in the detection of fraud in Zenith Bank Plc.

HO2:   Internal audit has no significant role in the prevention of fraud in Zenith Bank Plc.

HA2:   Internal audit has significant role in the prevention of fraud in Zenith Bank Plc.

HO3:   Internal audit has no significant role in the investigation of fraud in Zenith Bank Plc.

HA3:   Internal audit has significant role in the control of fraud in Zenith Bank Plc.

1.6     Significance of the Study

The findings of this work will be of immense significance to the banking sector in Nigeria. It will go a long way in enlightening them on the concept of internal audit as well as its role in the management of fraud.

It will also benefit other organizations. The findings from this study will aid them to apply better internal auditing strategies or effective control mechanisms in checking fraud in their diverse organizations.

It will as well benefit the general populace. They will be enlightened on the concept of internal auditing as well as its roles.

Students and researchers will as well benefit from this study. They will widen their scope from the information contained in this study.

1.7     Scope of the Study

Internal audit covers a large area in every organization. However, this study will concentrate only on the aspect that concerns fraud detection, fraud prevention and fraud control. Other aspects of internal control will be considered in this study.

1.8     Definition of Terms

Auditing:Auditing is a branch of accounting concerned with the efficient use of resources to achieve a previously determined objective or set of objectives contained in a plan (Obazee, 2012).

Internal Audit:Internal auditing is the whole system of auditing, financial and otherwise, intended to secure management information and reliability of accounting records (Gbenga, 2011).

Bank Fraud:Bank fraud is defined as the use of fraudulent means to obtain money, assets, or other property owned or held by a financial institution, or to obtain money from depositors by fraudulently representing to be a bank or financial institution (Daniel, 2012).

Internal Control System: This is defined as the whole system of control, financial and otherwise established by management in order to carry on the business of the enterprises in an orderly and efficient manner (Beattie, 2006).

Bank:A bank is a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets (Doolan, 2009).

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APPRAISAL OF THE LOCAL GOVERNMENT ADMINISTRATION AS A PANACEA FOR RURAL TRANSFORMATION

CHAPTER ONE

1.0                                                                                           INTRODUCTION

1.1     Background to The Study

The local government is viewed as a semi-autonomous area which is formed under the constitution or general laws of a state to carry out functions within specified geographical area. Agbakoba (2004), stated that the local government is an administrative and political unit that is vested with the powers under law to govern a specified locality. Its philosophy is entrenched on the idea of grassroots level participation in government.

Scholars and practitioners have indicated that local government are not only formed as representative arm of the state and federal government ,but as a means by which which goods and services are delivered to the people within the framework of enabling laws which established them.

Consequently it is the need to foster a balanced development in the rural areas and enhance the full participation of the rural dwellers that precipitate the establishment of the local government administration. The local government constitutes as a channel of administrative and political structure and facilitates national integration, rural commitment in governance, and a channel of fostering development at the grassroots. The local government is viewed as a co-partner with the state and federal government, Therefore the research seek to investigate local government administration as a panacea for rural transformation

1.3     Statement of the Problem

The rural populace is confronted with numerous developmental needs such as education, water, health care facility, good roads, electricity etc. This lack of basic amenities has constituted serious challenge to the living standard of the people resulting in poverty, poor health and living standard. Consequently the local government administration was instituted to serve as a bridge between the state and federal government in executing government development program at the local communities so as to enhance socio-economic development if the rural areas.

However according to Dare, (1989:38) The local government has not made the much needed significant impact towards the socio-economic development of the rural populace. He stated the much problems lies in the lack of provision of adequate funds to the local government. Also Ogunna (1980:44) identifies factors militating against the performance of the local government to include inadequate funding, poor executive capacity, poor and inadequate working equipment, staff incompetency and state government interference with its internal operations leading to excessive delays and bureaucracy. He therefore advocate for the review of the local government laws and regulation for a new reform to enhance a more effective local government administration. Therefore the problem confronting the research is to proffer an appraisal of local government administration as a panacea for rural transformation.

1.4     Objectives of the Study

  1. To find out the roles of local government administration towards the transformation of the rural areas.
  2. To determine what constitute the challenges confronting local government administration towards the transformation of the rural areas.

1.5     Research Hypothesis

Research hypothesis is a tentative and predictive answer to a question which issubjected to the power of verification and its formulation can be expressed in:

  1. mjNull Hypothesis (H0)
  2. Alternative Hypothesis (H1)

Since hypothesis is statistical method of testing the attributes of predictive condition, we can test the study under the following hypotheses:

H0: The impact of local government administration on rural transformation is low

H1: The impact of local government Administration on rural transformation is high

1.6     Significance of the Study

The study is particularly significant in view of the importance to develop the rural areas for socio- economic development. Consequently the study shall elucidate on the challenges mitigating rural development and proffer appropriate recommendation.

1.7     Scope and Limitations of the Study

The study focuses on the Appraisal of the Local Government Administration as a Panacea for Rural Transformation in Nigeria.

The research was confronted by some constraint including logistic and geographical factor.

1.7       Definition of Terms

Role: A role is the assigned duty to an employee or an institution

Local Government: Agbakoba (2004), stated that the local government is an administrative and political unit that is vested with the powers under law to govern a specified locality. Its philosophy is entrenched on the idea of grassroots level participation in government.

Transformation: Transformation refers to a gradual or rapid change in the socio-economic, political and cultural lives of the people living in a particular area.

Grassroots/Rural Development: The term grassroots development as used in this study refers to the act or process of developing and empowering the well-being of the vast majority of the rural dwellers through the provision of basic social and economic infrastructures.

Rural Dwellers: This are the people living in the rural communities of a country with lack of  lack basic infrastructure  and amenities .

Democracy: Democracy is the government of the people by the people and for the people. It implies that ultimate authority of government is vested in the common people so that the public policy is made to conform to the will of the people and to serve the interests of the people.

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APPRAISAL OF THE ROLE OF LOCAL GOVERNMENT AS AN INSTRUMENT OF COMMUNITY DEVELOPMENT IN NIGERIA (A Case Study of Chikun Local Government of Kaduna State)

APPRAISAL OF THE ROLE OF LOCAL GOVERNMENT AS AN INSTRUMENT OF COMMUNITY DEVELOPMENT IN NIGERIA (A Case Study of Chikun Local Government of Kaduna State)

ABSTRACT

This research work was undertaken with a view to ascertaining “The Role of Local Government as an Instrument of Community Development in Nigeria” with a focus on Chikun Local Government Area of Kaduna State as a case study. The work looked critically (in question) towards local government and community development in Nigeria within its area of jurisdiction. In doing this, the researcher based his study on the provision of the 1976 Local Government Reform in Nigeria which made local government and community development in Nigeria one of the explicit functions of the local government. In carrying out the research, primary and secondary data were used. Related literatures were reviewed and questionnaire were equally prepared and administered to local government functionaries. The findings of the research were reached using the result of the tested hypothesis. From the research findings, the hypothesis that “the role of local government in community development is low” is rejected. The researcher therefore concluded by making a sense of recommendations among which are the co-ordination of the development efforts of the various formal and informal organizations in the overall local government and community development in Nigeria programmes, and procurement of adequately trained personnel for the organizational and educational processes associated with local government and community development in Nigeria.

 

Chapter One

INTRODUCTION

1.1    Background of the Study

This chapter one presents the background of the study, aims and objectives of the study, significance of the study, scope and limitation of the study, research questions, statement of hypothesis as well as definition of concepts

Local government has and will continue to be of the prime of development in different parts of the world and their importance and impact on the daily activities of citizens cannot be over emphasized.

The terms local government refers to a political authority set up by a nation as a subordinate authority for the purpose of dispensing or decentralizing (political) power in  the English souse, it means local self-government.

Local government is a political sub-division of a national government or in federal system, a sub-division of regional government. In fact local government administration in connection with community development involves bringing development to the community at the grass-roots.

Community development is with a new ideology. It is defined as a process by which the efforts of the people themselves are lived with those of government authorities to improve the economic, social and cultural conditions of the communities, to integrate into the life of native and to enable them to fully contribute to the national progress.

Also the role of local government at the local level is clearly recognized as one of the underlying basis of the 1976 local government reformed which emphasizes that one of the principle objective of local government is to mobilize human and material resources through the involvement of members of the public in the promotion of local government. Many communities had built schools constructed roads bridges and organized higher education, scholarship schemes for linear children etc.

Community development as we recognize today is based on and has grown out of experience of the past. What is new is that these principles are now becoming more widely recognized than ever before the principles of community development are not new, but it is the emphasis which makes it almost a revolutionary. The concept of community development is based on the faith in the ability of people to learn to help them attain improved standard of living building better communities taking one step at a time. Rural development has thus remained one of the priority items of the programmes of any administration. In drawing up the blue print for rural development, the government of Kaduna State aims primarily at sensitizing and mobilizing the people at the grass-root level and deliberately and actively involving them in effective community development encouraging integrated and multi-dimension approach community development. For the government to achieve the grass*-roots development it must get closer to the people community development groups and local government should work very closely because for instance a service project such as maternity dispensary or school which is built without the relevant main tenancy expense of such service are usually too heavy to be borne unaided to such.

1.2       Aims and Objectives of the Study

The broad objective of the study is to find out the roles of local government in community development in Chikun Local Government.

The following are the specific objective of this study.

  1. To determine the impact of funding on community development.
  2. To determine the impact of corruption on rural development in Nigeria.
  3. To establish the use of trained and professional workers in community development.
  4. To ascertain the impact of local government authority on rural development in Nigeria.

1.3       Significance of the Study

The study being “The Role of Local Government as an Instrument of Community Development in Nigeria” will enable readers and future researcher to have a clear view of the role of local government in community development.

The researcher will assist reader and students who might want to carry out research work on the subject matter and will also serve as reference material for them.

 This work is expected to assist our policy makers who have taken upon themselves to sensitize the rural dwellers in Chikun local government. This is because through the finding of this work, they would then appreciate the importance of identifying the needs of communities before embarking on any project in a community.

1.4       Scope and Limitation of the Study

It is obvious that Nigeria is a country that has 774 local governments. The study is in “Appraisal of the Roles of Local Government as an Instrument of Community Development in Nigeria”.  But due to the fact that there are many local governments in Nigeria, the researcher decided to center the research in Chikun Local Government using it as the case study. The study covers the period between 2015-2017.

The researcher met with some problems in undertaking this study, notably in some areas of data collecting, time frame allocated to the study does not enhance wider coverage, and insufficient financial resources to execute the work more effectively. 

1.5       Research Questions

The following research questions will guide the study.

  1. What impact does funding have on the development of rural areas in Nigeria?
  2. To what extent does corruption affect rural development in Chikun local government?
  3. How does lack of trained and professional personnel affect the standardization of project in community development?
  4. What impact will local government authority have on rural development in Nigeria?

1.6       Statement of Hypothesis

Research hypothesis is a tentative and predictive answer to a question which is subjected to the power of verification and its formulation can be expressed in:

  1. Null Hypothesis (Ho)
  2. Alternative Hypothesis (H1)

Since hypothesis is statistical method of testing the attributes of predictive condition, we can test the study under the following hypotheses.

(i)         Ho = Roles of Local Government in community development is low

(ii)        H1 = Roles of Local Government in community development is high

1.7       Definition of Concepts

The key terms in the work are the local government role in community development.

Local Government: Nworje (2004) local government is an organ of the state put in place to peddle the development activities of a particular place or district with the view of making the impact of government being felt at grass-root level. Also Eyiyee (1999) see local government as the smallest government body created to take care of all local interest that requires government attention.

Role: The Oxford Advanced Learner’s Dictionary puts role as “the function that a person expected to have or the function a person has”.

Community: According to Oxford Advanced Learner’s Dictionary, community means the people living in one place district or country considered as a whole.

Development: It means a programme, change gear towards the equipment and sustain ability of the value of life development entails that is continuously taking in man and his physical environment.

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