ABSTRACT
It has been unfortunate situation that right from the inception of the financial institution in this country. Frauds and forgeries have been existing. Therefore, the objective of this research work is to discover the extent of involvement of Nigerians in fraudulent acts. The first chapter survey the background of the study, the purpose and significant of carrying out the work and the problems encountered in the course of the study. Chapter two take a look at what fraud is all about, source, forms and causes of our financial institutions and how it can be controlled. Chapter three looks at he methodology of carrying out the work like the source of utilization of data used in the analysis and references. Chapter four deals on the complete analysis and interpretation for the work. chapter five sums of the whole with it findings recommendation and conclusion.
TABLE OF CONTENT
TITLE PAGE i
APPROVAL PAGE ii
DEDICATION iii
ACKNOWLEDGEMENT iv
ABSTRACT vi
TABLE OF CONTENT vii
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY 1
1.2 STATEMENT OF THE PROBLEM 4
1.3 SIGNIFICANCE OF THE STUDY 5
1.4 PURPOSE OF THE STUDY 6
1.5 RESEARCH QUESTION 6
1.6 LIMITATIONS OF THE STUDY 7
1.7 OPERATIONAL DEFINITION OF TERMS 7
CHAPTER TWO
2.1 LITERATURE REVIEW 10
2.2 WHAT IS FRAUD IN THE BANKING INDUSTRY 11
2.3 CAUSES OF BANK FRAUD 12
2.4 TYPES OF FRAUD 16
2.5 THE EFFECTS/CONSEQUENCES OF BANK FRAUDS 17
2.6 TECHNIQUES OF FRAUD CONTROL IN BANKS 19
CHAPTER THREE
3.1 METHODOLOGY 21
3.2 SOURCES OF DATA 21
3.3 POPULATION SIZE 24
3.4 SAMPLE SIZE 25
3.5 TOOLS OF ANALYSIS 25
3.6 TECHNIQUES OF DATA ANALYSIS 25
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
4.1 DATA ANALYSIS 26
CHAPTER FIVE
FINDING RECOMMENDATION AND CONCLUSION
5.1 FINDINGS 36
5.2 CONCLUSION 36
5.3 RECOMMENDATIONS 37
REFERENCES 40
APPENDIX 41
QUESTIONNAIRE 42
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The late 1980’s and early 1990’s have been characterized with the increasing complexes and abrasiveness of the business environment as well as declining market. As a result of this, the urgency for information management has been accelerated with the increasing dependence of the business environment and of course the banking industry or sector on computer most management staff and computer operators are rather more concerned to move along with recent computer technology that they have not had time to think of some other sensitive issues effecting the computer for fraudulent practice that may arise through computer usage.
Fraudulent practices can be viewed from different people, depending on the perspective from which it is rampand in both developed countries.
Fraudulent practice could be defined in different ways. Fraudulent practice could be defined as a “criminal deception act of a person” it could also be defined as his theft of asset without the notice of lawful owners or international misrepresentation of truth in order to deceive. It can also be viewed as a criminal deception to obtain an unjust or illegal advantage of something. Fraudulent practice could be seen as the embezzlement of property by a person to whom property has been entrusted. It is an international distortion of financial statement among management employee or third parties. International auditing guideline (IAG) defined fraudulent practice as “a particular type of irregularity that involves the use of deceit to obtain an illegal or unjust advantage of money items”
Which ever way fraud is looked at, it connotes an intentional distortion of financial statement for which ever purpose the misappropriation of assets whether or not accompanied by distortion of financial statement.
This study attempts to sort out what the computer in banking sector is like whether is prone to fraudulent or fraudulent practice, the various control measures, detection and level of safety and security of data.
Banking: Banking has become totally dependent on the computer. In the past, a large but manageable amount of book keeping was handed manually but has been the expansion in banking that a huge labour force would be needed to tackle today massive volume of look keeping.
The computer is necessary because there is no other way of dealing with this problem, in most cases, the computer is sited centrally branches are equipped with terminal, giving them on line banking facilities and which enable them to interrogate the central system for information on such thing as a current balance record and so on.
Under the computer control customers statement are prepared and printed out especially designated stationary. Cheques are handled by computer at the clearing house central bank, a mouth operation carried out during the night when the system can concentrate on (dedicated) this purpose.
The cheques are sorted into batches through the computer order and then returned to the branches the next day. The computer also provides each branches and its customers also provides each branches and its customers access to information from a much wide financial would them that would be possible under a manual system.
1.2 STATEMENT OF THE PROBLEM
The banking sector in Nigeria has been taking bold steps in the introduction of computer usage in the operation of banking services. The reason being for obvious benefit derived form.
However, viewing it from another dimension one begin to wonder how safe the computer is. The question that comes to mind is the integrity and security of the computer. How easy it is for a staff and outsider to gain access into the computer room. How easy it is for computer personnel, whether in collusion with user personnel to manipulate the computer program fraudulently either to benefit him or for some other reasons. And how easy it is for user data to be attered fraudulent for the benefit of the perpetrators and increase of manipulation can the computer defect them quickly.
In general view of things computer fraud could be as a result of natural phenomenon accident mistake but largely as a result of fraudulent intention of individuals.
1.3 SIGNIFICANCE OF THE STUDY
The prime motive of this study is to expose various areas of computerized banking operation where fraud can be perpetrated, the types, defection, causes effect and possible control measures.
In this case, this research is significant in putting management and auditors at alert in various loopholes in computer usage in banks.
Thus, leading to overall security of fraud and assist the organization.
1.4 PURPOSE OF THE STUDY
The purpose of this study is:
1. To discover the extent of involvement of Nigeria in fraudulent acts.
2. To discover the key issue leaving to involvement in frauds by members of the public.
3. To evaluate the consequences of the frauds on the banking industry in the economy at large.
4. To discover way of checking and minimizing fraudulent practices to the barest minimum in banking industry.
1.5 RESEARCH QUESTION
1. Does fraudulent practices exist in banking industry?.
2. What are the effects of fraudulent practices in the banking industry?
3. What are the remedies to reduces or eliminate fraudulent practice in banking industry?
4. How can fraudulent practices be prevented in the banking industry?
1.6 LIMITATIONS OF THE STUDY
There are so many difficulties which this research work is confronted with firstly, is that most banks officials approved were reluctant to give out relevant helpful statistical data on financial frauds that occurred in the organization. None of them denied of ever being a victim of financial frauds, but they refused to set such vital information out so that their competitors will not use it as a parameter to determine or measure their internal control efficiency. There is also the problem of cost of acquisition of the relevant information needed for the research work.
1.7 OPERATIONAL DEFINITION OF TERMS
Bank: There are central places as an establishment for keeping money, valuable items for safety; the money is paid out to customer’s orders.
Computer: These are machine that accept data from an input device, perform arithmetical operation in accordance with pre-defined programmed and finally transfer the processed data as final document. It is also known as a device that works under the control of share programmers automatically accepting storing and processing data to produce information that is the result of processing.
i. Hardware: This is the name given to all physical devices making up a computer system.
ii. Software: This is the general term used to describe the various programmers that may be used on a computer system together with their associated documents.
iii. System analysis: This is clear study of the operation in the organization to find out data processing problems and designing a system that can be applied to computer.
iv. Programmer: This is a person who encode the procedures of a programme in a language suitable for in specified computer.
v. Programme: A set of instruction that is written in the language of the computer to solve a specific task.
vi. Package: These are programmer or application systems which are used for complete sequence of operation. Such as payroll or sales ledger posting it may be purchased form the manufactures.
vii. Input: The raw data which is to be entered into a data processing system. Also referred to as existing file or information to which amendment is to be carried out to produce.
viii. Output: This is the information or result from data processing system via an out put device.
ix. Data: This is a raw fact or is any number, letter or symbols which are fed to computer system for processing.
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