internal control and fraud detection in banks
PREPARED BY
Agbo Ene Joy Ihuoma
Accounting Department
Are Babalola University ABSTRACT
The Central Bank of Nigeria reported that the backward development of Nigeria was attributable to weakness in the internal control systems of the banks. This has clearly pointed out the picture of how fraud is being penetrated in the financial strength of Nigerian banks. In a nut-shell , the damage which the menace, called fraud has done to the banks is innumerable and needs urgent attention.
Internal control are measures established by directors relating to the accounting systems in order to check if all transactions made are recorded using the correct figures and if they were executed in accordance with proper general or specific authorisation.
Internal Control and Fraud Detection covers the essential tools you need to perform internal control related services. It will take you through your clients responsibility to design and implement programs and controls to prevent , deter and detect fraud. It touches on internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act “Enhanced Financial Disclosures, Management Assessment of Internal Control” which mandates changes.
This work covers ways by which internal control can be useful in detecting of fraud in organisations. A section of this work also deals with a little of forensic accounting, a specialty requiring the integration of investigative, accounting and auditing skills. The forensic accountant looks at documents and financial and other data in a critical manner in order to draw conclusions. As experts in this area, forensic accountants understand the fraud risk areas and have extensive fraud knowledge and experience of dealing with the application of accounting facts gathered through auditing methods and procedures to resolve legal problems. They do not merely look at the numbers but, rather, look critically behind the numbers in search of significant patterns.
Agbo Ene Joy Ihuoma
Accounting Department
Are Babalola University ABSTRACT
The Central Bank of Nigeria reported that the backward development of Nigeria was attributable to weakness in the internal control systems of the banks. This has clearly pointed out the picture of how fraud is being penetrated in the financial strength of Nigerian banks. In a nut-shell , the damage which the menace, called fraud has done to the banks is innumerable and needs urgent attention.
Internal control are measures established by directors relating to the accounting systems in order to check if all transactions made are recorded using the correct figures and if they were executed in accordance with proper general or specific authorisation.
Internal Control and Fraud Detection covers the essential tools you need to perform internal control related services. It will take you through your clients responsibility to design and implement programs and controls to prevent , deter and detect fraud. It touches on internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act “Enhanced Financial Disclosures, Management Assessment of Internal Control” which mandates changes.
This work covers ways by which internal control can be useful in detecting of fraud in organisations. A section of this work also deals with a little of forensic accounting, a specialty requiring the integration of investigative, accounting and auditing skills. The forensic accountant looks at documents and financial and other data in a critical manner in order to draw conclusions. As experts in this area, forensic accountants understand the fraud risk areas and have extensive fraud knowledge and experience of dealing with the application of accounting facts gathered through auditing methods and procedures to resolve legal problems. They do not merely look at the numbers but, rather, look critically behind the numbers in search of significant patterns.
References: APB (1995a), Accounting and Internal Control Systems SAS 300, Auditing Practices Board Statements of Auditing Standards, London. COSO (2004), “Enterprise risk management – integrated framework”, Committee of Sponsoring Organizations, available at: www.coso.org/Publications/ERM/COSO_ERM_Executive Summary.pdf (accessed 18 January 2007). KPMG Forensic (2004), Fraud Survey 2004, KPMG International, Amsterdam. Public Company Accounting Oversight Board. 2004. Auditing Standards No. 2: An Audit of Internal Control over Financial Reporting Performed in Conjunction with an Audit of Financial Statements.” Washington, D.C.: PCAOB: March 9.