AN APPRAISAL OF FRAUD PREVENTION MEASURES

IN NIGERIAN BANKING SECTOR

(A CASE STUDY OF ACCESS BANK PLC OWERRI)

BY

-----------------
-----------

A PROJECT SUMBITTED IN PARTIAL FULFILLMENT

OF THE REQUIREMENT FOR THE AWARD OF ---------------
IN ACCOUNTANCY DEPARTMENT OF SCHOOL OF
BUSINESS AND MANAGEMENT TECHNOLOGY
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SEPTEMBER, --------------

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 APPROVAL PAGE

This project work An Appraisal of Fraud Prevention Measures in

Nigeria Banking Sector. (A case study of Access Bank Plc Owerri)

written by ----------- with registration No ------------ has been

accepted in partial fulfillment of the requirement for the award of

------------ in Accountancy.

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MR. -------------- SIGN/DATE
(PROJECT SUPERVISOR)

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MR. --------------- SIGN/DATE
(PROJECT COORDINATOR)

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 DEDICATION

This project is dedicated to the God Almighty for his

infinite mercy, love, kindness, favour, grace and divine

upliffment towards my life and my family, my brother and

sisters and all lovers of education.

3
 ACKNOWLEDGEMENT

I wish to express my profound gratitude to people who has

contributed to the success of my academics. My heart

gratitude goes to my beloved ----------- and my Elder

------------ for their financial support through out my stay

in school.

I wish to express my profound gratitude to my able

supervisors Mr. --------- for his intellectual approach,

directive, gentle and persistence in the writing of this

project work. My special thanks goes to my Head

Department Dr. -------------, and all my departmental

lecturers for their immeasurable lecture and guide

throughout my years of studies.

I will not forget my wonderful friends and well wishers too

numerous to mention, may God in his infinite mercy bless

you all amen.

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 ABSTRACT

The nature of bank dealings is basically on cash and

financial instruments, which are negotiable and can be

transferred easily. As a result, it is so much, exposed to

fraud- internally and externally. This malpractices is

common in all areas involving cash, cheques and fraud

transfer operations including the e- banking system. Many

researchers have directed their work towards finding the

cause of fraud. However, due to the role played by banks

in the economic development, it becomes necessary that

the upswing of fraudulent practices be nipped in the bud.

This work is therefore based on the detection, prevention

and control of bank fraud. The work will be divided into

three chapters, chapter one will be a general introduction

and an overview of the subject matter. It will also

highlight the purpose . chapter two is based on literature

review, having regards to finance fraud, bank fraud,

nature of bank, causes and prevention.

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 TABLE OF CONTENTS
Title page i
Approval page ii
Dedication iii
Acknowledgment iv
Abstract v
Table of contents vii

CHAPTER ONE
1.0 Introduction 1
1.1 Background of the study 1
1.2 Statement of the problems 3
1.3 Objectives of the study 4
1.4 Research question 5
1.5 Significance of the study 5
1.6 Scope of the study 6
1.7 Limitation of the study 7
1.8 Definition of terms 8

CHAPTER TWO
2.0 Literature review 10
2.1 Brief history of case study centre 10
2.2 Meaning and definition of concept 10
2.3 Nature of bank fraud 13
2.4 Ways banks and customer can be affected 14
2.5 Non bank employees malpractices 16
2.6 Causes of bank fraud 19
2.7 Prevention of bank fraud 20

CHAPTER THREE
Research design and methodology 28
3.1 Introduction 28
3.2 Research design 28
3.3 Sources/method of data collection
Sources of data 30
3.4 Method of data collection 31
3.5 Population and sample size 31
3.6 Sampling techniques 32

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3.7 Method of data analysis 33

CHAPTER FOUR
Presentation and analysis of data 34
4.2 Presentation of data 34
4.3 Analysis of data 36

CHAPTER FIVE
Summary, Conclusion and Recommendations 43
5.1 Summary of findings 43
5.2 Conclusion 43
5.3 Recommendations 45
References
questionnaire

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 CHAPTER ONE

1.0 INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The position of the banking sector in our economy cannot

be over emphasized. Its main function is to act as

intermediary with the responsibility of channeling of funds

from the surplus sectors to the deficit sectors of the

economy.

Those who participate in the Nigerian banking sector

include; the central bank of Nigeria (CBN), commercial

banks, and community banks among others. These

financial institutions deal with financial instruments that

are transferable and desirable in nature. However, the

recent spate of fraud and forgeries tend to pose a serious

bottle neck to the proper functioning of the banking

system, thereby increasing the associated risks and

resultant business losses reported yearly.

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A critical review of events in the last few decades reveals

that the prevailing societal values and practices are not

helping matters at all. A society, where criminals and

persons with questionable characters are applauded and

honored with chieftaincy title cannot fight this epidemic.

Instead more persons are growing for the act daily.

Frauds are committed in most cares for gain and frauds

men are generally motivated by greed. This is true

because the use in the activities of frauds men tend to

respond to the growing desire for wealth. A recent survey

by the financial institutions framing center Lagos, puts the

average reported bank fraud cares at 500 yearly resulting

in millions of naria been loss by banks and customers

alike.

Given this epidemic toll, the problems now is how to

effectively checkmate the activities of these frauds men

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who seem to be matching their skill with every

development in the system. Even though fraud is said to

be inherent in the nature of banking operations, it could

still be prevented if not controlled totally that is the

purpose behind this study.

1.2 STATEMENT OF THE PROBLEMS

Many banks have lost its foundation as a result of huge

amounts being written off as bad debts, sometimes by

dubious loan arrangement. As a result of this, a lot of

banks have gone in distress and those customers affected

having to bare their pains alone. Other problems to be

addressed are;

The incessant cares of financial fraud in our banking sector

and it comes through and of the following ways.

 Defalcation of customers cash lodgments by cashiers.

 Manipulation of customer accounts

 Clearing of forged bank cheques and drafts

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 Dry posting of fictitious credits through the computer

 Fraudulent transfer based on forged letter of authority

etc.

1.3 OBJECTIVE OF THE STUDY

This research work is generally set towards the effects

financial fraud have had on the Nigerian banking system

and to determine how the spread should be avoided.

Furthermore, in more specific terms, the study is aimed

at.

 Identifying reasons why people involve themselves in

fraudulent activities.

 Revealing how and why the activities of frauds men are

scarcely uncovered.

 Examining the various management and given mental

control devices geared towards eliminating or checking

financial fraud

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 Evaluating ways to combat the spread of fraud in our

banking sector through effective monitoring of

electronic transaction until properly executed.

1.4 RESEARCH QUESTIONS

 Is your bank computerized?

 What effect has computer toward the security of your

bank?

 Has fraud cause any negative effect in the economy of

Nigeria

 How often does your bank record case of financial

fraud?

 Does fraud has any benefit in the Nigeria economy?

1.5 SIGNIFICANCE OF THE STUDY

This study is intended to highlight the indispensable role of

an internal control system in relation to maintaining a

sound banking system. It will equally be of immense help

and benefit to other establishments both in public and

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private sector. It is hoped that management will appraise

this research work and use it to equip itself with the

requisite check and control that are necessary for

developing on enviable banking system.

For prospective auditors and accountants, it is a material

worth reading. It will enables them to understand what

fraud is, how it is been committed, those usually involved

where to focus attention and internal control system is an

in evitable atmosphere for any business environment.

1.6 SCOPE OF THE STUDY

This research work is with particular reference to

intercontinental bank plc ( the now access bank plc),

Wethderal road Owerri, due to certain reluctance on the

part of some staff of the bank to give away relevant

statistical data on fraud issues in their branch, a visit to

other banks where relevant materials could be gathered

became necessary

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1.7 LIMITATION OF THE STUDY

The execution of this work witnesses a lot of constraints,

some of which were;

 Financial constraints: Generally cost of living is high,

research work like this one takes lot to complete. As a

result, for this particular study, the researcher did not

find it easy since the financial involvement was much.

 Time constraints: As already mentioned, this research

work was conducted alongside other academic

activities. Therefore, the allocation of time among these

activities. In order to achieve a balance between

academic demand and office work wasn’t easy.

 Research data acquisition constraints: Give the

nature of the research work and topic, it was not easy

to acquire all the data needed. Many of the workers

refused to relate some of the data needed for fear of

leaking classified information. This problems persisted

in spite of the fact that they were informed that the

works was only for academic purpose. Eventually with

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 some assistance a number of the materials needed were

realized.

1.8 DEFINITION OF TERMS

For the purpose of clarity, the following terms are

explained as used in this, work to aid proper

understanding of the subject matter.

AUDITORS: These are specialists who are trained

specifically for tracing a financial statement and making

sure that it gives true fair view.

ACCOUNTANTS: These are also qualified staffs, but their

functions are to summarize, record, interpret and

communicate financial statements properly to users at a

given point in time.

BANKS: These are mainly financial institutions responsible

for depositing of money and other durable and valuable

assets and also channeling of funds from the deficit sector

to the surplus sector

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COMMERCIAL PAPERS: These are promissory notes

with short period ranging from a few days to nine months

of large.

DOCUMENTS: A document is an official or formal paper,

from, book etc, given information about something,

evidence or a record of something

FRAUD: This means deceit, imposture, a snare and

deceptive tricks.

FORGERIES: This is a crime of copying money,

documents, etc in order to deceive people.

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 CHAPTER TWO

LITERATURE REVIEW

2.1 BRIEF HISTORY OF CASE STUDY CENTRE

Detecting of bank fraud has been a problem during this

study, it was discovered that lack of sound internal

control, proper accounting procedures and insider

involvement are some of the reasons why fraud can

remain in a system without being detected. Even when it

is reported and investigation commences, yet another

difficulty is the co- operation of members of staff. Some of

them who are in the position to give vital information will

always decline. During this study, it was learnt that fear of

the outcome of investigation and staff involvement in the

reported fraud are some of the reasons why a staff would

not want any investigator

2.2 MEANING AND DEFINITION OF CONCEPT

This is an abstract or general idea inferred or derived from

specific instances. fraud in whatever form is limit less in

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classification this not withstanding, the varied meaning

attached to the concept of financial fraud are here under

addressed.

The oxford and chamber dictionaries, defined fraud as “a

criminal deception act of deceptive tricks, cheating,

swindling…… but the Longman dictionary, defined it as “ as

act of deceitful behaviour for the purpose of gain which

may be perishable by law” while webstaers third new

international dictionary prefers to define fraud from two

points of view, fraud in fact” and “fraud in equity” fraud in

fact is “an international misinterpertain, concealment or

non –disclosure for the purpose of including another in

reliance upon it to part with some valuable things. In

equity, fraud is an act of omission to act or concealment

by which one person obtains an advantage against

conscience over another.

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Fraud is a deliberate misrepresentation which cause

another person to suffer damages, usually monetary

losses.

Therefore, any materials alteration, whether by addition,

insertion, obliteration, erasure, removal, which I done to

deceive and cheat an unsuspecting victim, constitute a

fraud.

Despite several other definitions of fraud as may be

presented by other contributions I believe that those given

so far are purpose of this research. This is because they

contain the basic element of fraud, which includes.

A, there must be intent to have an advantages over

another person

B, there must be deceit or deletions directed to the

detriment of another person.

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C, there must be false representation made knowing or

recklessly.

Against this background it is early to observe that fraud is

an umbrella-crime concept covering a wide range of

criminal behaviour.

2.3 NATURE OF BANK FRAUD

The nature of fraud is ever changing – corporate

restructuring, political instability and rapid technological

advances are among the factors that given rise to

opportunities for new and more sophisticated methods of

fraud . the debilitating effects of fraud on the public and

private sector of the economy activities are immeasurable.

Controlling the alarming increase in unlawful economic

activities will require concerted team work between those

entrusted to manage public funds, private sector

corporations, law enforcement agencies and external

auditors and consultants.

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2.4 WAYS BANKS AND CUSTOMERS CAN BE

AFFECTED

 STEALING OF BANKS MONIES: According to Prof

Adedokun, Unilag, this includes stealing by cashiers,

stealing from cashiers by other employee and other

employees of higher rank, up to top management

levels. This types of fraud many be committed by

cashier from their daily receipt, or it can be committed

by other employee who steal from monies in the

custody of cashier, who may be monetarily absent from

their cages without locking them up. management

stealing may be committed in so many ways including

stealing money from the strong room, to replacing

strong room money with forge currency notes.

SEALING OF CUSTOMER MONIOES

Prof. Adedokun commenting also on this aspect of fraud

termed simple or complicated method, instance of simple

methods may be where a customer pays money into the

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bank and the cashier while committing the money drops

some into his till and then claims that the packet of say

N200 in N20 notes is short by about fifteen pieces (N300).

the unsuspecting customer then begins to doubt his own

calculations or the honesty of his servants in the house or

office. The reverse may also happen in the case of

withdrawal of money by a regular customer who believes

in the honesty of banking staff or one in a hurry. Here the

cashier short pays the customer and once the customer

fail to count the money at the counter. He will not be

allowed to make any claims for short payment since he

will be suspected to have removed some of the money

outside the counter.

The complicated instances may range from fraudulent

intra- bank crediting and debiting of respective customers

accounts with a view to transferring money from one

account to the other. Another dimension of stealing or

defrauding customers came up in the case of Aeroflot of

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soviet Airline Vs Access Bank plc. In this case, the plaintiff

walked into the bank with the teller to pay in some

amount.

After certification by the cashier, the teller was stamped

and the first copy was handed over to the customer and

the duplicate retained by the cashier. The customer had

expected the money to be reflected on his bank statement

at the end of the month, but was not reflected.

On this investigation, it was realized that the bank cashier

had used a” cashier stamp” that had been purportedly

reported stolen. Apparently, the stamp was used by the

cashier to stamp tellers without recording his receipt in the

banks ledger.

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2.5 NON BANK EMPLOYES MALPRACTISES

 FRAUD THROUGH LETTERS OF CREDIT: Overseas

suppliers have continued to receive Symons letters of

credit from individual in this country. Such letters of

credit are usually accompanied by fake bank drafts on

the reverse of which are fake or false endorsement

guaranteeing payments.

According to the federal ministry of justices law review

series (1990) P. S a Nigerian importer opened a letter of

credit worth over half million us dollars in favour of a swiss

merchant for the supply of cement. The letter of credit

was payable on the presentation of a clear bill of landing

and shipment by a conference or non- conference line. The

documents were delivered but the ship named on the bill

did not exist, neither was any cement shipped.

 FRAUD THROUGH FOREGED BANK

STATIONERIES: Fraud can also occur through the

printing of bank stationeries and caviling of bank rubber

stamps. These forged documents and stamps are used

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 by unscrupulous people to prepare fake letters of credit,

guarantees and other international trade instruments,

which are circulated with a view to defrauding persons

and companies.

In a case reported in the federal ministry of justice law

review series (1990) P.6 A company was awarded a

government contact of several millions of Naira. He asked

for and was given mobilization of about N20 million after

producing bankers guarantee. The contractor disappeared

soon after collecting the advance payment. when the

government agency wanted to call the grantor, it was told

that the guarantee had been forged.

 FRAUD THROUGH TELEX MASSAGES: This

occasionally occurs among authentic messages, which

are to be listed and sent by bank’s telex officials.

However, test keys maybe manipulated usually with the

collusion of NITEL officials. As a result of the fake

messages, money is paid to a fictitious account through

a corresponding bank and later cashed by the oversea

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 collaborators. This is one of the most serious crimes in

banking and the amounts involved are usually huge

2.6 CAUSES OF BANK FRAUD

According to the CBN banking supervision annual report

for 1998, causes of fraud in banks can be classified into

institutional and social factors.

Institutional factors include;

 Poor internal control system; loopholes in the internal

control system converted by fraudsters into advantage.

 Inadequate experience and lack of training of staff

exploited by fraudsters

 Poor record- keeping

 Poor condition of service, job insecurity lack of

incentives, poor remuneration and blurred prospects for

career advancement.

 Poor monitoring and supervisions of loan portfolio

The social factors comprise of

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 Decling moral values

 Slow criminal adjudication system

 Frustration and poverty

However, it was noted (in a seminar titled “Africa

leadership forum) P4 that poverty should not be seen as

providing a justification for fraud as most fraudsters are

not poor. There should also be a system that prosecutes

fraud expeditiously. There are laws in banking eg

bankruptcy laws which are not enforced.

2.7 PREVENTION OF BANK FRUAD

It is doubtful however, whether there could ever be

enough security guarantees for the banks. There are so

many with the genius for evil and as Irechukwu put it,

“The cyber fraudster learns everyday and will device new

tricks to beat the latest advancement in security cordon

around any system” so analysts are of the opinion that

the only way out is to tighten the internal controls, but

27
with many dimension of fraudulent practices in banks,

other financial analysts say that tightening of internal

controls may not do enough to check the problem. this

skeptical stance is in agreement with what Okezie B.N

wrote about internal control. According to B.N Okezie)

(1999) P. 46, no internal control system can by itself

guarantee efficient administration and completeness and

accuracy of the records.

Internal control system is limited to the ability of the

operators to follow prescribed rules and regulations, so it

goes to say that there must be prescribed rules and

procedure to be followed and it is these rules that wilkins

M.G (1984) P. G outline as follows.

 Ascertain daily balances of all books

 Well focused internal audit arrangement

 Others

To ascertain daily balances, Mr. Wilkins outlined the

following.

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 A check be made for all cash balances through a

random personal check

 All ledger accounts should be balanced

 The stock if any, of travelers cheques must be balanced

with controls.

 All bills received (on hand) must be listed, physically

checked and balanced with controls.

 General ledger and principal journals should be checked

personally by the manager after they have been

balanced.

 All sectional vouchers should be scrutinized

Any discrepancies or irregularities must be noted such as

missing documents. Unbalanced ledgers, bill confirmation

letters in transit etc. this will enable head office to fake

appropriate actions. In the area of internal audit. he said

audit should not just be a check of arithmetical accuracy.

but also an inspection to ensure that all documentation is

adequate and accurate.

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Any system employed in each section and in the branch as

a whole must be a comprehensive self balancing

accounting routine, with sufficient built in checks to control

accounting so that posting of the correct amounts or to

wrong accounts lost, vouchers are immediately

highlighted. According him, the auditors should not just

rely on “That is the way it has always been done” changes

may have occurred elsewhere, which now create a

loopholes in the system and if so this must be corrected.

There controls are designed to safeguard the bank and its

customers as well as prevent fraud. Other precautions

may include

 Using a halogen with its ultra violet rays to detect

attractions in cheque made by chemicals, which are

not otherwise visible.

 Use of tally disc to ensure that payment is made to

the correct payee.

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  Second signature (endorsement) to enable

comparison to be made with the original.

 Taking passport photographs of signatories to

corporate accounts or where with drawals over a

certain amount are involved. It is important to note

that all written instructions from customers must

have their signature verified.

To save cost and time, it is necessary to check every item

in all areas of operation daily since this will slow down

essential customers services. Hence, the spot check

should be carried out on random basis with prior notice

and should cover all essential areas. This spot check is

designed to supplement a good internal audit-control

system.

Critical review of the above routine will reveal them as

more internal control procedure, which as earlier said is

limited by the operators, it is in this guise that analysts

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opine professional ethics and moral lessons should be

preached to staff on a constant Bain’s if fraud and

forgeries by staff are to be effectively tacked. If this is

taken care of they believe, strict adherence to internal

control and computer safety frauds men.

Commenting on ways out for the electronic fraud Mr.

Irechukwu says that insider potential staff frauds can be

checked in two ways. The first one he called segregation

of functions. In this safety net, the highly literate

information technology staff he said is restricted to the

role of systems administrators. they are not allowed to

create because they are so knowledgeable that if they

have a criminal motive. The could weak havoc. He said

others who are merely functionally literate personnel are

employed as operators. He explained further that shielding

the bank against the non staff hackers requires the

building of fire wall. This stops intruders, while guiding

authorized access seekers to the information they seek to

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obtain. This he said is based on inscription which uses

machine greeting protocols, recognition, identifications

and then admission into the system. Anyone without the

right code is denied access.

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 REFERENCES

Okonkwo-C.O (1964) Criminals laws in Nigeria African

university press, Lagos.

Ojo.O.O. Etal (1981) Money and banking 1st Edition.

London: George Allen and Union Published Ltd.

Okezie B.N (1999) Fundamentals of financial accounting

Bon Publication Owerri, Nigeria.

Ekwerike and Oparaeke (1999) first course in accounting

Maxcon educational publishers, Aba Nigeria.

Orji h, (1998) Seminar in banking and finance Enugu: Bob

Billion publishers.

JOURNALS

Lasbery, P.C (2006), effect of auditing practice in fraud

Control Journal of the institution of auditors.

Moskey, R.V (2002) “Efficacy of banking auditing”

Transactions of the American society of bankers.

Adewunmi C. S (1995) Fraud in bank, Lagos land mark

publishers limited.

Kanu and Okezie(2001): Credit Management and Financial

Analysis, Owerri.

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 CHAPTER THREE

RESEARCH DESIGN AND METHODOLOGY

3.1 INTRODUCTION

The research methodology is concerned about the

research’s intent to carry out the study. It deals with the

method and procedures of carrying out the study. It also

include the introduction, the research design, sources of

data, method of data collection, the sample size, the

sampling techniques, validity and reliability of measuring

instruments and data analysis techniques.

3.2 RESEARCH DESIGN

The basic problem which one faces at the beginning of any

research work is that in obtaining a very theoretical

framework for adequate conceptualization and scientific

investigation.

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Consequently, the researcher adopted some methods in

carrying out her research on an appraisal of fraud

prevention measures in Nigeria banking sector.

In other to make this project more directional she used a

historical systematic technique which was achieved

through collection of data from various sources that will

facilitate the purpose of the problems undertaken.

The researcher tries to asses the nature of the study and

develops plans on how to carry out such identified

problems under study.

The study has as its major objectives; obtain information

that is most relevant for the solution and the best possible

way to process information. A survey research design was

adopted as suggested by Asika (1991) this is because, it is

a fact finding techniques that focuses on people, the vital

fact of people and their beliefs, opinions and attitudes. The

information gathered here would be looked into as to

36
carryout whether the set objectives is being accomplished

overtime.

3.3 SOURCES /METHOD OF DATA COLLECTION

SOURCES OF DATA

The sources of data that is available to the researcher for

this study is;

 Secondary sources

 Primary sources

Primary data has to do with obtaining information directly

from there original sources. The techniques used in

collecting primary data of this research include;

observation, personal interview and questionnaire.

Secondary data sources includes information obtained

from references which include related books, journal,

magazines, unpublished materials etc, this sources used to

review related literature in chapter two.

37
3.4 METHOD OF DATA COLLECTION

This study has relied on collection of data methods to

achieve the desired aims and objectives of the study

basically both primary and secondary sources of data were

adopted. The primary sources of data include; personal

interviews, personal observation and questionnaire

distributed. The need was to make sure that correct

answers are received from the respondents. Also the

secondary sources of data used include library research,

research from major text book on the subject matters,

magazine, journals official speeches, newspaper, Gazettes,

government publication commission reports.

3.5 POPULATION AND SAMPEL SIZE

A research work of this nature is always carry out by

choosing a portion of population upon which generalization

would be made, the aim of this is to remove as many

problems as possible as it may be difficult to carry out

what is valid and reliable on the whole population. But the

38
selected sample must have the characteristics of the entire

population to enable the researcher to generalize.

In determining the sample size in this study, a sample size

consisting 102 respondents out of the 60 questionnaire

distributed and 50 were filled, and the sample size is

based on 102 respondents staffs of the selected banks in

Owerri.

3.6 SAMPLING TECHNQIUE

The sampling technique used in selecting the sample for

the study is random sampling techniques. Sampling

random sampling is a selection scheme where every unit

in the sampled population has equal chance of being

selected into the sample. The researcher used simple

random sampling in other to ensure that the population of

the selected organization in Owerri is represented, and

also it is used to get the desired information needed on

the impact of effective reward system on employee’s

39
productivity. Simple random sampling also helps in high

degree of representation and also minimizes mistakes.

3.7 METHOD OF DATA ANALYSIS

Data collected were represented on sample size and

sample percentage analyze techniques was adopted to

analyze the data collected. Answers to each of the

question in the questionnaires were counted and

segregated according to the respondents and calculating

their percentage as show below simple percentage formula

stated.

40
 CHAPTER FOUR

PRESENTATION AND ANALYSIS OF DATA

41 INTRODUCTION

This chapter shall present, analyze and interpret various

data collected from the respondents through the

questionnaire distributed to staffs and management of the

selected banks in Owerri.

The researcher, therefore, grouped the data gotten from

the questionnaire under the appropriate research

questions from where they were formulated. It is also the

researcher’s view that this chapter will provide solution

problem under study.

4.2 PRESENTATION OF DATA

Azuka (2003) design a survey data requires that a plan

be specified for tabulating returned data for presentation.

In this research involves both primary and secondary data

used during the investigation or study. Questionnaire,

41
table and percentages used to present the appraisal of

fraud prevention measures in Nigerian banking sector

more so, of a sample size 50 people represented the

population was randomly selected on which some

questionnaires were administered out of the 60

questionnaires sent out 50 of the sample size were

correctly filled.

TABLE FOR DISTRIBUTIION

Out of sixty (60) questionnaires distributed to access bank

plc and bank phb staff ,40 were properly

completed ,eighteen were not properly completed .

Staff Returned Not Returned Total

response

Access bank 25 10 42

plc

Bank phb 15 8 18

staff

Total 40 18 60

The table shows the following

42
The various banks the questionnaire was distributed, it

was distributed in 4 days and waited for 9 days ,before it

was completed.

4.3 ANALYSIS OF DATA

This simply means translating the bits of information into

a form that address the focus of a particular research or

study.

It is also the extractions of need in information from the

data that will enable a description of the sample you are

handling Azuka E (2003).

Considering the result of the questionnaire 60

questionnaires was administered 50 were returned and

correctly filed, while 58 others were partially filled. This

means that only 50 out of the 60 questionnaire that are

correctly filed and returned represent 63.75% of the total

number administered. Also the questionnaires that are

43
partially filled represent 36.25% of the total administered

total number filled = 50 partially filed = 58

Analysis of questionnaires sent out and returned.

Table 4.1

Questionnaire Number filled Percentages %

Correctly filled 40 63.75

Partially 20 36.25

Total 60 100

QUESTION 1

Is your bank computerized?

TABLE 4.2

S/NO OPTION NO OF PERCENTAGES

RESPONDENTS (%)
1 Yes 35 100%
2 No 15 0%
Total 50 100%
From the above, it can be observed that respondent

represent 100% agrees that their banks are computerized.

QUESTION 2

44
What effect has computer toward the security of your

bank?

Table 4.3

S/NO OPTION NO OF PERCENTAGES

RESPONDENTS (%)
1 Strong 40 90.2
2 Weak 10 9.8
Total 50 100%
The effect computer has towards the security system of

the organization is that the computer must have password

S0 that intruders will not have any access to the

organizational document files.

QUESTIONS 3

Has fraud cause any negative effect in the economy of

Nigeria?

Table 4.4

S/NO OPTION NO OF PERCENTAGES

RESPONDENTS (%)
1 Yes 45 90.2
2 No 5 9.8
Total 50 100%
Fraud make the international community lose confidence

in the national economy, foreign investors will no longer

45
invest in the economy for fear of losing such investment to

fraudsters, as witnessed during the ‘419’ era in Nigeria.

QUESTION 4

How often does your bank record cases of financial fraud?

TABLE 4.5

S/NO OPTION NO OF PERCENTAGES

RESPONDENTS (%)
1 Frequent 50 90.2
2 Rare 0 9.8
Total 50 100%
From the above, it can be seen that the case of fraud is

rampant in the Nigeria banking sector.

QUESTION 5

Does fraud has nay benefit in the Nigeria economy?

TABLE 4.6

S/NO OPTION NO OF PERCENTAGES

RESPONDNETS (%)
1 Yes 35 81.4
2 No 5 4.9
3 Not much 10 13.7
Total 50 100%
The response shows that fraud has no benefit in the

Nigeria economy rather it helps to bring the economy

down in the sense that the while people who will like to

46
come and invest in Nigeria, but because of the rate of

fraudulent they will now stay back, it thereby diminish our

economy.

QUESTION 6

Has fraud taken place in your bank?

TABLE 4.7

S/NO OPTION NO OF PERCENTAGES

RESPONDENTS (%)

1 Yes 50 100

2 No 0 -

Total 50 100%

It can be seen that 100% of the respondents said that

fraud has taken place in their bank before. this is an

overwhelming response.

QUESTION 7

47
For the period you have been working in the bank would

you say that case of fraud detection have been on the

increase?

TABLE 4.8

S/NO OPTION NO OF PERCENTAGES

RESPONDENTS (%)
1 Yes 40 89%
2 No 10 11%
3 Don’t know - -
Total 50 100%

The response shows that the audit teams of my case study

banks are quite effective, to that effect 89% of the

respondents said that for the period they have been

working in the bank, cases of fraud detection have been

on the increase where as 11% of the respondents said

that for the period they have been working in the bank,

cases of fraud detection have been on the decrease, this is

a good development on my case study bank.

QUESTION 8

48
Do you consider your bank inspectors /auditors to be

autonomous enough in the performance of their duties?

Table 4.9

S/NO OPTION NO OF PERCENTAGES

RESPONDENTS (%)
1 Yes 30 48
2 No 10 11
3 Don’t know 10 41
Total 50 100%
It can easily be seen that 48 % of the total respondents

said they consider their bank inspectors / auditors to be

autonomous enough in the performance of their duties,

11% do not consider it autonomous enough, while 41%

alluded that they do not know if their banks inspectors/

auditors are autonomous enough or not.

49
 CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIOSN

5.1 SUMAMRY OF FINDINGS

The problems of frauds management in banks is an

enormous task confronting owners and managers of

banks. There seen to be no more way to end this because

human ingenuity will eventually find a way around the

most carefully planned system.

It shall be the pre-occupation of this chapter to look at

some findings that are relevant draw conclusions and

make recommendations.

5,2 CONCLUSION

Banks have a duty to promote and maintain adequate

banking services for the public via the restoration of

banking confidence among the populace. The government

also has a part to play in this game of fraud control.

50
Fraud should not be allowed to destroy the very society we

are trying to build. It has destroyed the dignity of the

banking sector and the confidence between banks and

their customers. It is threatening the whole economy and

it is time appropriate actions were take by both banks and

the government. The problem of financial fraud is not

limited to access bank plc, nor is limited to the banking

system alone, but the whole facts of our society.

A society where there is no standard norm of behaviour,

where corruption in high and low places is the order of the

day and where ammasing wealth greedily is the burning

desire of many. How can we save the banking system?

As already noted, there is no full proof against financial

fraud in access bank plc, as well as the society at large.

We can only attempt to minimize it. This is true because,

fraud men will always think ahead of the already existing

checks and balances. It behaves the bank then to employ

51
all reasonable and practicable measures to protect the

depositors and shareholders, otherwise, fraud can ruin the

entire system. Existing laws should be reviewed and

restructured to complement the efforts of the banks and

other regulatory bodies. With these complementing

actions, we can be sure to have a society with normal

confidence of frauds.

5.3 RECOMMENDATIONS

Having explored in various ways the problems posed by

fraudulent activities in the banking system, the writer

makes the following recommendations in the hope that

they would be of help to bank managers in finding solution

to this perennial problem.

It is the duty of the police force to prosecute crimes

relating to bank fraud. The individual banks should not be

allowed to prosecute the fraudsters. This is to give room

for an independent investigation without any form of

52
interference to the fraud. Saddled with this responsibility

and given the twist unfraudulent activities that are going

sophisticated. The police force should be well equipped

and trained to match the sophistication of the current

wave of fraud.

53
 BIBLIOGRAPHY

Campbell D (1971) The investigation of fraud Banry Rose

publisher in associations with the police journal,
London.

Okonkwo-C.O (1964) Criminals laws in Nigeria African

University press, Lagos.

Okezie B.N (1999) Auditing and investigation Bon

Publications 14 Okigwe road, Owerri, Imo state

The Federal Government of Nigeria (1975) The Nigeria

criminal code Polished by the federal government
Printers, Lagos.

Africa leadership forum “Ethics and professionalism in

Nigeria banking industry” Ota Nigeria 31st July- 2nd
August 1992.

54
 APPENDIX

Department of Accountancy
----------------------
P.M.B. -------
---------------

Dear Sir/ Madam,

RESEARCH QUESTIONNAIRE

This is a research work on the appraisal of fraud, prevention

measures in Nigeria banking sector. In partial fulfillment for the
award of --------------.

I would be grateful for your cooperation by filling in this

questionnaire. All the information supplied will be considered
confidential.

Thanks for your anticipated co-operation.

Yours faithfully,

-------------------

55
 QUESTIONNAIRE

Section A please tick your answers in the box provided and fill in

the gap where necessary.

1. What is your age?.................................................................

2. Sex: Male Female

3. What is your marital status?

Married

Single

Divorce

Widowed

4. What is your highest level of education?......................

5. What is your position?

Senior staff

Junior staff

56
 SECTION B

1. Is your bank computerized?

Yes No

2. What effect has computer toward the security of your

bank?

Strong Weak

3. Has fraud cause any negative effect in the economy of

Nigeria?

4. How can you access the fraud detection control and

elimination in your bank?

a. Secured

b. Very secured

c. Not secured

5.Are you satisfied with the fraud control effect of your

bank on the overall productivity of the bank?

a. Satisfied

b. Dissatisfied

6. Does your bank need inspectors/ auditors for controlling

and fore – stalling of fraud?

57
a. Yes b. No c. Don’t know

7. For the period you have been working in the bank,

would you say that case of fraud detection has been on

the increase?

a. Yes b. No c. Don’t know

8. Does fraud contribute to the distress of some

commercial bank?

a. Yes b. No

9. Do you consider your bank’s inspection team to be

autonomous enough in the performance of their duties

a. Yes b. No c. Don’t know

10. Has fraud taken place in your bank?

a. Yes b. No

11. Does highly motivated and experienced inspectors,

auditors capable of fore-stalling fraud in your bank?

a. Yes b. No c. Don’t know

58