TABLE OF
CONTENTS
Title
page
Certification i
Dedication ii
Acknowledgement iii
Table
of contents vi
CHAPTER ONE
1.1 Introduction 1
1.2 Statement of the Research problem 5
1.3 Objective of the study 5
1.4 Significant of the study 5
1.5 Research Question 6
1.6 Scope of the study 7
1.7 Limitation of the study 8
1.8 Study plan 8
1.9 Definition of key terms 9
CHAPTER TWO
LITERATURE REVIEW
2.1 The public Sector 11
2.2 Difference between Public and Private
Sector Accounting 14
2.3 Accountancy and Financial report 16
2.4 Frauds and fund misuse 17
2.5 Causes of Frauds and fund misuse 19
2.6 Types of Frauds 21
2.7 Detection and Prevention of Frauds 23
2.8 The internal control system 24
2.9 Internal and External audit 28
2.10 Scope and Internal Audit 31
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Definition 34
3.2 Method of data collection 34
3.3 Population and sample size 37
3.4 Sampling Techniques 37
3.5 Method of Data Analysis 37
CHAPTER FOUR
ANALYSIS OF PRESENTATION OF DATA
4.1 Introduction 39
4.2 Data Collection 39
4.3 Data Analysis 40
4.4 Analysis of fraud and fund misuse data
question 44
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Summary 51
5.2 Conclusion 56
5.3 Recommendation 56
Reference 59
CHAPTER
ONE
1.1 INTRODUCTION
Public sector could be described as the
government arm of a country. The three tiers of government in relation to Nigeria
include the federal government, the state government and the local government.
Fraud
and fund misuse over the year has been a threat to Nigeria economy. The need to
prevent it gave birth to financial control system.
Fraud
as a conscious premeditated action of a person or group of people with the
intention of uttering the truth or fact for selfish personal and monetary gain”
Fraud
involves the use of decent and trick and some times highly intelligent cunning
and know-how.
The
action takes the form of forgery, falsification of documents forging and
uttering of signatures and out right.
Fund
misuse on its own, occurs in most cases intentionally and it is thus a method
of fraud perpetration in most pubic sector establishment.
The
need for fraud and fund misuse prevention could be derived from a report fact
contained in an extract from the human development report 1994 prepared by the
united nations development programme (UNDP) stating that “Developing countries
of the world save on estimated $125billion between 1987 and 1994 from reduced
military spending but those funds cannot be linked with any development project
that can improve the standard of living of their national” what were the fund
used for?
1.2 STATEMENT
OF THE RESEARCH PROBLEM
In
Nigerian today, it’s a fact that accountability in its entire ramification has
been unfamiliar to out public sector. This pathetic situation is assumed to be
the cumulative effect of various problems confronting “financial control”. In
Nigeria Public sector establishment. As a result, this research is being
conducted to highlight the problem of frauds and misuses of funds in public
sector and the need and significant importance of financial control system in
the public sector.
Some
of the major problems inhibiting financial control in public sector are as
follows: Poor enforcement, procedures, late finalization of accounts, poor
enforcement of laid down procedures or financial control, insufficient
financial regulations and poor internal control system in various departments.
There
is poor number of qualified accountants and professional in other management
field to institute sound financial control system and this may be attributed to
poor condition of services obtained in the public sector compared with that of
private sectors. It is important to note, there is inadequate attention to
revenue collection and expenditures resulting in under utilization, incremental
budgetary system which encourage accounting officers and other privilege
employees to misuse funds and perpetrate funds. There is also the problem of
daily up-rise of financial requirements without constant review of a control
procedures and existence of antiquated accounting and financial rules
procedures development in accounting technology and government spending. The misuse
of poor remuneration to public servant compared with other sector encourages
inefficiency and fraudulent practices in public sector and poor services to the
populace in turn encourage the third parties to perpetrate frauds in public
sector.
There
factors are problems inhibiting the effective application of both internal and
external financial control system in public sector.
1.3 OBJECTIVE
OF THE STUDY
The
objective of the study are as follows:
ü To
confirm the existence of financial control system in public sector.
ü To
explain the role of internal control system
ü Detection
and prevention of errors, frauds and misuse of public fund are indicated.
ü To
explain the effect of tax office at improving tax collection procedures.
ü The
relevance of auditing for effective control in public sector is explained.
ü To
discuss the importance of auditing in the tax office.
1.4 SIGNIFICANCE
OF THE STUDY
This
study has much relevance and implication to the case study, all government
ministries and parastatals, private sectors and Nigerian economy as a whole.
the terrible affect of funds and misuse of public fund in government treasury
leads to a basic set back paramount in public sector today. The set up of
Nigeria and other developing countries of the world today is characterized with
embezzlement, corruption and gross indiscipline and it’s the concern of every
government of developing countries and even develop, countries to institute
sound financial control strategy to save their respective economy from imminent
collapse. This therefore calls for a study in this area.
1.5 RESEARCH
QUESTIONS
1. Does
financial control has been a major exercise in the public sector
2. Does
fraud involves the use of decent and trick and some terms highly intelligent
cunning.
3. Does
adjustment for debtors and creditor are made at the end of the year in order to
correct expenses or revenue into account in private sector.
4. Does
public sector provide information necessary for faithful efficient, effective
and economical management of a operation of and the entrusted to it.
1.6 SCOPE
OF THE STUDY
The
study has been majorly carried in Ilorin areas office of federal Inland Revenue
Service. The system of financial control of the organization as a whole follows
the same pattern with other areas and zonal offices. Reasonable exposures have
been made of external and internal control devices applicable in the area
office or efficient operation and other relevant financial control system
operative in the organization as a whole as far as possible.
1.7 LIMITATION
OF THE STUDY
Many
problems were encountered during the course of this research work but in which
I tried my best in order for the problems not to hinder the effectiveness of
this research work.
1. FINANCIAL PROBLEMS: But in which I have
to sources for more fund from my sponsors.
2. TIME CONSTRAINTS: In which I
rescheduled my program so as to give enough time for the research work.
1.8 PLAN
OF THE STUDY
This
study is plan into five chapter, chapter one will consist of introduction and
chapter two will cover there view of selected literature, research methodology
in chapter three and analysis will be presented in chapter four, the last
chapter which is chapter five will contain summary, conclusion and
recommendation.
1.9 DEFINITION
OF KEY TERMS
THE PUBLIC SECTOR:
could be described as the government arm of a country. The three tiers of
government in relation to Nigeria includes the federal government, the state
government and the local government each tier of government lies its own role,
power, responsibility, as described by the constitution and relevant decree.
FUND MISUSE: This
is the most susceptible factor which fraudster usually relies upon when for
instance, a figure is not properly written, it can easily be manipulated by
fraudsters.
INTERNAL CONTROL SYSTEM: The
meaning attached to the term “internal control” American institute of certified
public accountants is a follows. It is the whole system of controls financial
and otherwise adopted within a business to safeguard its assets.
INTERNAL AUDIT:
means an independent appraised function established within an organization to
examine and evaluate its activities as a services to the organization.
AUDITING: can
be defined as an independent examination of the expression of an opinion on the
financial statement of an enterprise by an appointed auditor in accordance with
the term of his engagement in the compliance with relevant obligations and
profession requirement.
EXTERNAL AUDIT: is
an independent observation. The function of and external auditor is to examine
the financial statement prepared by the management with a view to express
opinion on the truth and fairness of the accounts.
ADVANCE FEES FRAUDS (419): This
is a situation whereby a person promises another person of a contract already
awarded and ask him to pay on advance fee to formalize the contract, thereafter
the person disappears.
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