THE IMPACT OF AUDITING IN CONTROLLING FRAUD AND OTHER FINANCIAL IRREGULARITIES

ATTENTION:

BEFORE YOU READ THE ABSTRACT OR CHAPTER ONE OF THE PROJECT TOPICS BELOW, PLEASE READ THE INFORMATION BELOW.THANK YOU!

INFORMATION:

YOU CAN GET THE COMPLETE PROJECT OF THE TOPIC BELOW. THE FULL PROJECT COST N5,000 ONLY. THE FULL INFORMATION ON HOW TO PAY AND GET THE COMPLETE PROJECT IS AT THE BOTTOM OF THIS PAGE. OR

YOU CAN CALL: 08068231953, 08137701720

WHATSAPP US ON: 08137701720

THE IMPACT OF AUDITING IN CONTROLLING FRAUD AND OTHER FINANCIAL IRREGULARITIES

ABSTRACT

Fraud in the Nigerian Banking Industry before the recent merger, acquisition and recapitalization efforts was at alarming rate. It has caused many banks to collapse, and many investors and depositors’ funds were trapped in. In fact, it has prevented many banks from achieving their goals and many businesses went into liquidation. Honestly speaking it has become a cankerworm that has eating deep into the financial sector of the Nigerian economy. That calls for the need for this study and the purpose of this study therefore is to identify the causes of fraud, measure its impact and identify the means of controlling it. The study is a survey research and questionnaire was used for the collection of primary data. Questionnaires were administered to staff of First Bank of Nigeria PLC. Chi-square was used in analyzing data. The findings show that lack of adequate training, communication gap, and poor leadership skills were the greatest causes of fraud in Nigerian banking industry. It was concluded that adequate internal control system should be put in place and that workers satisfaction and comfort should be taking care of.

CHAPTER ONE

INTRODUCTION

Background of the Study

According to Gay, Schelluh and Reid 2007, an auditor has the responsibility for the prevention, detection and reporting of fraud, other illegal acts and errors is one of the most controversial issues in auditing, and has been one of the most frequently debated areas amongst auditors, politicians, media, regulators and the public. This debate has been especially highlighted by the collapse of both small and big corporations across the globe. The auditing profession in Nigeria has caught the media’s attention following financial scandals in some of the Nigerian banks such as Intercontinental Bank, Oceanic Bank, Afri Bank, and Bank PHB among others. There seems presently to be a misconception that auditors’ duties are largely the preventing, detecting and reporting of fraud, for example, Idris (2009). The aim of this study is to identify financial report users’ perceptions of the extent of fraud and financial irregularities in first bank of Nigeria plc, and to determine their perceptions of the auditor’s responsibilities in detecting fraud and other financial irregularities and the performance of related audit procedures in first bank. The project also aims to ascertain whether the report users’ perceptions of auditors’ responsibilities on fraud and other financial irregularities are consistent with those of the auditing profession as expressed in auditing standards in Nigeria.

Bank organizations in Nigeria perform a variety of tasks and responsibilities not only for transformation agenda but also to enable it to function in an effective manner. These tasks and responsibilities are distributed among teams, which are assigned to fulfil their duties in a specific organisation. All designated tasks are equally important in Nigerian Banks, thus, making all employees and staff crucial to the operations of the bank. One of the crucial functions in these organizations is the process of auditing especially in the cases of fraud and irregularities. It has been reported that an audit is an evaluation of an organization, system, process, project or product, which involves the independent and fair assessment of the financial statements of the organization. Knowledgeable, independent, and objective individual or group of individuals, known as auditors or accountants, makes a report based on the results of the audit. In addition, this function is performed to determine the reliability and validity of financial information, and to present an evaluation of a specific company or an internal control of a particular business system, for these systems must comply with the generally accepted standards laid down by national governing bodies for regulation (Power, Walsh, & O’Meara, 2001). Because of such importance, this project seeks to consider the effect of fraud and irregularities on first bank performance in Nigeria and its control.

In accordance to fraud and irregularities on banks performance in Nigeria, auditing and financial evaluation are crucial since it reflect on how their respective administrators manage the flow of their income, assets and transactions. For this reason, banks in Nigeria should hire several experts to do the auditing and financial evaluations. Aside from hiring accountants and auditors that will work for them internally, they also need to seek help of other experts to avoid biasness and also in order reveal the genuine stability of the entity being audited (Jones and Pendlebury, 2000). According to Arter, (2012), these people are called independent auditors’ expert or sometimes called external auditors. Basically, external auditors/accountants are audit experts who perform an audit on the financial statements of a government, company, individual, or any other legal entity (Cameron, 1982). As stated previously, these people are working independently to present an unbiased and independent evaluation on such entities. In comparison to internal auditors, external auditors’ primary responsibility is assessing the risk management practices and strategy, management and governance processes of an entity. These experts usually does not express any opinion on the entity’s financial statements, they just evaluate and never do such recommendations. Similar to internal auditors, independent auditors are considered by the public service sector and other organisations to take a look at financial statement to confirm they are free of errors and obvious misstatements (Arter, 2012).

Statement of the Problem

Basically, fraud and irregularities occurring among banks in Nigeria created significant effect. This event may result to business failure or worst bankruptcy. Aside from this, fraud & irregularities could also have significant effect to capital market, capital structure, Efficiency Market Hypothesis and credit ratings. In accordance to the impact on control environment and internal controls within Banks in Nigeria, the independent auditor has a number of affirmative responsibilities. According to the Jones and Pendlebury (2000), firstly, the independent auditor must be precise in strategies to find out and report the bank’s genuine financial position. Secondly, as a representative for the public, the independent auditor must stay independent of the management of the bank. The independent auditor owes the independence duty to the shareholders of the bank, the public and the board of directors. Thirdly, the independent auditor must completely reveal all material features of the financial condition of the bank. The independent auditor duty of disclosure requires them to reject an improper engagement, report cheating, and place a caution on statements pertaining to the ability and liquidity of the company to continue as a going concern.

In independent auditor experts’ affirmative duty to discover irregularities and material errors, including fraud, the independent auditor fulfils a function that the public considers the independent auditor’s most significant role (Monaghan 1989). According to Harvey, (1990), fraud does not become visible on the face of bank’s records, but frequently signs of it will likely in the form of irregularities, and, hence, the auditor can only divulge fraud by closely examining irregularities. Whereas the Statements of Auditing Standards (SAS) according to Arter, (2002) asserts the independent auditor’s clear liability to identify management fraud, that same SAS does not oblige the auditor to guarantee the accuracy of the firm’s financial statements.

Objectives of the Study

The objectives of this study are to:

• Examine and report in writing of opinion on the truth and fairness of the financial statements so that anybody reading and or using the financial statements can belief in them.

• Attest to the fairness of the financial statements and compliance with laws, regulations and the effectiveness of controls.

• To gather sufficient evidence so as to be able to form an opinion on the accuracy and correctness of the financial statement.

• To provide credibility to financial information that can be relied upon by outsiders, such as stockholders, creditors, government regulators, customers and other interested third parties.

• To prevent errors and fraud by the deterrent and moral effect of the audit.

Research Questions

The above objectives will be guided by the following questions:

• What are the auditors’ duties towards fraud?

• What should auditors’ do if he discovers an irregularity in the form of material error or fraud?

• What options do auditors’ have if they detect a fraud by management?

• What effect does lack of auditing have in the banking industry?

Significance of the Study

This study will be of immense benefit to other researchers who intend to know more on this study and can also be used by non-researchers to build more on their research work. This study contributes to knowledge and could serve as a guide for other study.

Scope of the Study

This study is on the impact of auditing in controlling fraud and other financial irregularities.

Limitations of the study

Financial constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint: The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

HOW TO RECEIVE PROJECT MATERICAL(S)

After paying the appropriate amount (#5,000) into our bank Account below, send the following information to

08068231953 or 08168759420

(1) Your project topics

(2) Email Address

(3) Payment Name

(4) Teller Number

We will send your material(s) after we receive bank alert

BANK ACCOUNTS

Account Name: AMUTAH DANIEL CHUKWUDI

Account Number: 0046579864

Bank: GTBank.