Fraud Detection and Internal Control Measures in Deposit Money Banks Listed on the NSE

Abstract

This study examine the internal control measures for fraud prevention and detection in Deposit Money Banks (DMBs) listed on the Nigerian Stock Exchange (NSE). Data collected were from both primary and secondary sources using annual financial reports and questionnaire for the respondents of all listed DMBs in Nigeria. Analysis was mainly done by regression of the internal control measures and fraud in DMBs. Internal control measures proxies are control environment, risk assessment and control activities. On the other hand, fraud prevention and detection proxy is discretional accruals. The analysis found out that the internal control measures of control environment, risk assessment, and control activities have negative influence on fraud detection and prevention (discretional accruals). However, the influence of risk assessment is not significant. It was therefore recommended that an overhaul of the management and internal control systems currently being operated by DMBs in Nigeria be done to make it strictly in line with IFRS standards and guidelines. Furthermore, this should be backed by the introduction of forensic auditing and assurance to make offenders not only liable for their actions; but also subject to legal prosecution as well.

effect of the internal control system (ICS) on fraud prevention and the financial performance of selected retail supermarkets in Ibadan

“…The study found that a significant positive relationship exists between ICS and fraud detection and prevention in sub-county treasuries in Kakamega County. Haladu (2018) conducted a study on fraud detection and internal control measures within Nigerian Stock Exchange (NSE)-listed deposit money banks (DMBs). Employing both survey and ex-post factor research designs, the study encompassed all 15 banks listed by the NSE as of the 2017 financial year.…”

Analisis Determinan Fraud Prevention (Studi Empiris Pada Badan Usaha Milik Daerah di D.I Yogyakarta dan Jawa Tengah)

“…Hal tersebut berarti semakin efektif sistem pengendalian internal maka tingkat kecenderungan kecurangan semakin menurun. Haladu [10] dalam penelitiannya menemukan bahwa pengendalian internal berpengaruh negatif terhadap fraud detection. Artinya semakin kuat pengendalian internal internal maka semakin sedikit ditemukan adanya fraud.…”

“…Penelitian ini sejalan dengan hasil penelitian Suastawan dkk, [21], Udayani dan Sari [23], yang menjelaskan bahwa sistem pengendalian internal berpengaruh positif terhadap fraud prevention. Hasil penelitian lain yang dilakukan oleh Haladu [10] menjelaskan bahwa sistem pengendalian internal berpengaruh negatif terhadap fraud detection, yang artinya semakin kuat pengendalian internal maka semakin sedikit ditemukan adanya fraud. Sistem pengendalian internal yang baik mampu menghilangkan praktik-praktik kecurangan.…”

“…Dalam penelitian ini moralitas tidak dapat memoderasi pengaruh whistleblowing system terhadap fraud prevention. Hasil tersebut sejalan dengan penelitian yang dilakukan oleh Bernardin dan Solihat [10] yang menyatakan bahwa moralitas tidak dapat memoderasi pengaruh whistleblowing system terhadap fraud prevention. Hal itu dikarenakan setiap individu memiliki moralitas yang berbeda sesuai dengan teori yang dikembangkan oleh Kohlberg yaitu teori penalaran moral yang menjelaskan bahwa setiap individu memiliki tingkat moralitas yang berbeda.…”

Effect of Auditing Skills on Small Business Performance: A Study of Small Businesses in Anambra State, Nigeria

“…Over the years, auditing has been deployed in business to detect errors and fraud early and offer actual views about financial information (Alao, 2016;Emmanuel et al, 2013;Haladu, 2018;Ogoun & Atagboro, 2020;Oyerogba, 2021). Nevertheless, auditing small and medium-scale businesses in Nigeria has been fraught with the inadequacy of internal controls.…”