ABSTRACT
This researcher
examines the prospects and problem of internal control in bank, using Union Bank Plc
Muhtala Muhammed way llorin as a case study. Forty four (44) staff of
the bank were randomly sampled. A questionnaire was design to collect data from respondents, simple
percentage, chi-square test
and average total weighted response (AWTR) to analyze the data collected. The study revealed that internal control
system is effective
in Union Bank Plc, it was also found out
that the purpoled
factor are militating against internal control system. Level of management and
gender does not affect responses of the respondent on factors that are militating
against internal controls system.However, working experience and education qualification of
respondent affect the response of the respondent on factors that are militating
against internal control system. The recommendations were proffered and these are:
I. The
management should daily with the factor militating
against internal control system if the
internal control is to be more effective.
II. Appointment
of personnel to a particular work should be base on working experience and educational qualification
III.
The bank should appoint right people into the bank when they want to employ people.
Iv. There should be training of all personnel
of the
bank so that this will
improve their skills,
v. Also internal control system should be
review
regularly,
so that
if there is problem, it can be corrected.
TABLE OF CONTENT
Title
page
Certification
Dedication
Acknowledgement
Abstract
CHAPTER ONE: INTRODUCTION
1.1
Background of the study
1.2
Statement of the problem
1.3
Justification of the study
1.4
Statement of hypothesis
1.5
Objective of the study
1.6
Scope of the study
1.7
Plan of the study.
CHAPTER
TWO: LITERATURE REVIEW
2.1
Introduction
2.2
Concept of internal control
2.3
Classification of internal
control
2.4
Types of internal control
2.5
Reliance on internal control
2.6
Axes on internal control
2.7
Objective of internal control
2.8
Environment of internal
control
2.9
Requirement for effective
control
2.10
Application of Internal Control
2.11
Limitation of internal control
CHAPTER
THREE: RESEARCH METHODOLOGY
3.0
Types of Data
3.2
Research design
3.3
Sample procedure
3.4
Method of data analysis
CHAPTER FOUR: PRESENTATION AND ANALYSIS OF DATA
4.0
Data presentation
4.1
Data analysis
4.2
Findings.
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.0
Summary
5.1
Conclusion
5.2
Recommendations
5.3
Suggestion for further
research
Bibliography
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND
OF THE STUDY
Banks are very important in any nation; they are the backbone f the
nation's economy. Function of banks according to Ezeudiji (1997), including
money creation, acceptance of deposit from the customers, provision of facilities
for domestic and foreign remittance, help government in implementing monetary
policies e.t.c.
According to Benaijee (2001) internal control system is whole system of
control, financial and otherwise established by the government in order
to carryon 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 includes the detection of error,
early detection of fraud and protection or safeguarding of business assets but
despite the fact that all banks have internal control system, there have been a lot
of problems in the banking sector. Ranging from bank liquidating to defrauding the
banks, many
banks 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 international bank limited to 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 cleaning system by the central bank of Nigeria (CBN) because of mis-management of banks resources expert
have given reasons as to what causes banks
distress. According to Exeudiyi (1997) one of the causes
of bank distress
is the internal
control system problems include
poor or lack proper authorization of loan and contract, poor loan recovery,
failure to collect proper collateral security, management override the
control e.t.c.
According to Koroye
(1989). It a bank interval control (detective in any significant way. then)
that audit should be decline outright or opinion must qualified as strictly as
possible. It is because of two main reasons.
(1) Banking transaction are very prone to
fraud
(2) The
auditor will take forever action
to vouch the transaction to obtain substantive audit
transaction.
1.2 STATEMENT OF THE
PROBLEM
Internal
control system many organization, including bank is very important
because it ensures
orderliness, in the organization, advance to management policies,
early detection of error and fraud, protection of assets e.t.c internal control system problems have
led to closure of many banks in Nigeria, Ezeudiji
(1997) thereby making
depositors customer to shareholder of such banks 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 questions.
Does
bank operation carried out in any orderly manner, and follow the procedure laid
down? Does transactions recorded accurately and correctly?.
1.3 JUSTIFICATION OF THE
STUDY
The study
is very important
nowadays were federal government
and state government has striving hard
to woo investor in Nigeria. Since
foreign investor will not invest in any country where there is no good banking sector. The study will be of
immense benefit to banks determine the extent to which internal control system
is effective. In addition the study would determine the factor problem
militating against the success of internal
control in banks so that solution proffer to it. The study will be of immense help because most of the funds
requires by Nigerians are
provided by banks also
anything that affects banking sector
also affect many
others sectors such as agriculture
and economy sector of the nations
The
study will be useful for further research in related topic.
1.4 STATEMENT OF THE
HYPOTHESIS
The
following hypotheses form the framework for carrying out this study.
Ho 1: The internal
control system is not significantly
effective in union bank plc.
Ho 2: The factors are
not significantly militating
against Interval
control system ri union bank plc Ho3: There
is no significance do
not significantly effect responses
on factors militating against internal control system in union bank plc
Ho 4: working
experience do not significantly effect responses on factors militating against internal
control system in union bank plc.
Ho
5: level of
management on the
respondent does not significantly
affect the responses on factors militating against internal control system in union bank plc.
Ho 6: The
academic qualifications of the respondent do not significantly affect their responses on
factors militating against internal control system in union bank plc.
1.5
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 affect internal control system in union bank plc
iv. To suggest
way to improve
internal control system effectiveness in union bank plc
1.6
SCOPE OF THE STUDY
This study is limited to Union bank plc Muritala Muhammed way branch ilorin due
to financial constraints and other' problem. The study can only be generated to
union bank plc branches ail over the country.
1.7 PLAN OF THE STUDY
This plan is divided into (5) five chapter, the first chapter discuss on
the introduction of the study which comprises of the general background of
the study, hypothesis, significance, limitation, plan of the study and scope of the
study.
The second chapter contains chapter that review the related literature,
these literature is reviewed under the concept of internal control.
Chapter three deals mainly with research methodology it substantially give
detail information on the instrument used for the study it also contains research
design and explanation on procedure for collection of data.
Chapter four deals with analysis and interpretation of the data collected;
finally, summary, conclusion and recommendations are made in chapter five.
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