Amount: $23.81 |

Format: Ms Word |

1-5 chapters |


Bank Name: FCMB Bank

Account Type: Savings
Account number: 7749601025

Bank Name: Access Bank

Account Type: Current
Account number: 0107807602



Chapter one contains the introduction and analysis of fraud. So many people define fraud in a different way because of its explicit meaning. It also concentrates on the limitation, objectives, and importance of auditing in our banking industry.  While chapter two deals with the definition of Auditors and their duties in the banking industry. It also discussed various types, causes, effects of frauds in banks as well as the role of Auditors to hip it in the bud.  The paper equally looked into the means of preventing or reducing the incidence of fraud in the banking industry or operation. From the analysis, it was established that there is incidence of fraud in our banks. It was equally discovered that fraud occurs more frequently in the current account department than in any other departments and this is normally done through forged cheques. It was also discovered that bank frauds can hardly succeed without the aid of bank staff.  Finally, it was discovered that frauds have effects in operation and progress of the frauds has effects in operation and progress of the banks despite the control technique that has been instituted by the management of the bank.



1.1       Background of the Study

The role of auditors in fraud control and monument is essential. Fraud has been one of the most problematic and unsolvable matter for business all over the world for a long time; however, there has been much more attention and research dedicated to the topic after the scandals such as Enron, WorldCom and others. Frauds have led to loss of huge amount of money in the banking industry and nation’s economy in general (Fatoki, 2015). Researchers have discovered that fraud contributed drastically to the financial distress of poor performance of many banks in Nigeria (Austin, 2011). According to Olorunsegun (2010), fraud is a major challenge of banking industry and this makes all banks vulnerable and distress. The management of each bank spends their hard-earned money to curtail it occurrence. Moreover, it puts question marks on the integrity of the employees and management of the banks and also gives rise to absolute loss of customers’ confidence in banking. Adeyemo (2012) asserted that banking frauds are made possible with insiders or staffs collaboration. The management and staffs of every bank are expected to carry out their responsibilities with ultimate sincerity of purpose devoid of fraudulent practices to enhance public gain, trust and goodwill. Besides the role played by banking industry in growth and development of the nation economy, fraud goes a long way in depriving the economy of the necessary funds required for sound economic activities. It was discovered that the actions taken by the management of the banks in the aftermath of fraud cases are insufficient in stopping another fraud from been perpetrated. In a study carried out by Onwujiuba (2013), it was revealed that the managements of banking industry are not putting up enough measures that can prevent and control banking frauds, hence, the reason for incessant fraudulent practices in Nigeria.

Adeyemi and Uadiale (2011) opined that the existing duties and responsibilities of auditors are inadequate and are not clearly defined. Also, the expectation of the people on the issues of the auditors’ responsibilities in detecting and curtailing fraudulent act are high. As a result, a significant number of people or respondents believed that auditors’ responsibilities should be widened. Abu-Saeed and Kabir (2012) revealed that the internal audit unit needs to be alive in discharging their responsibilities and the need to acquire basic or necessary knowledge that can engender fraud prevention in the banking industry. Sorunke (2016) observed that internal audit unit did not contribute significantly to fraud prevention and control in reality. The question is, what then, is the role of auditors in the prevention of fraudulent activities in Nigeria’s banking industry? In view of this, the study was carried out to investigate the impact of auditor on bank fraud in Nigeria.

With the existence of so many banks and the establishment of new ones in the banking industry, the banking environment is becoming more competitive and sophisticated as each bank in new ideas     The banking industries have always been associated with some degree of fraud. The issue of bank frauds and forgeries should not be surprising in view of the fact that money is mainly the trade-mark of banking industries. In Nigeria, bankers are particularly concerned because fraud perpetration is on the increase and continuous to acquire greater dimension. More importantly, the high rate of frauds and forgeries in the overall banking system has negative effect on the growth and development as well as stability of banks which invariably affects the financial sectors in the economy.

Fraud, in a nutshell, is a criminal deceptive act of a person, fraud in itself is the number one enemy of business because of the magnitude and degree of importance of the amount that could be involved. The charted institute of banks of Nigeria (CBN) and the central bank of Nigeria (CBN) have made various efforts to reduce or eliminate fraud in banks in Nigeria, but desired result have not been achieved. The institute has been able to establish a fraud investigation panel to look into cases of bank frauds and dishonest conducts involving their members. Also government agencies such as ICPC, EFCC, police and law court etc, set up to examine these cases, while most of them have become fraudsters, and had become nuclear and concise in their operation, the bankers have failed to wake up to challenges, that’s why fraudsters always succeed in their operation and millions of naira had been carted away.

This problem has invariably affected the trust of the depositors in banks and has resulted in their deciding to keep away a substantial part of their money from the bank.

1.2       Statement of the Problem

It is necessary to highlight that many organizations fail to report cases of fraud to the appropriate authorities as they believe doing so will give undue publicity or negative image of the organization lack of discipline and inability of the law enforcement agents to prosecute offenders accordingly encourage fraudulent practices among individuals. Some people are over ambitious, hence, prone to country fraud. They dismiss morality as an unnecessary prerequisite for virtuous. The average Nigeria is corrupt, dishonest and lazy seeking for opportunity to cheat.

In Nigeria frauds are often recorded in almost all branches of all banks particularly commercial ones. These acts have hindered a lot of business opportunities. Similarly, in United States of America (USA)  in 1984 congregational ‘Report on 75 failed Commercial Banks between 1980 – 1983, 61% involved criminal misconduct by insiders while 39% by outsiders’. The advent of computer which is hoped to reduce the level of fraud has not helped matters, since that the computer operator are known to have infused with fake figures and created fake accounts which serve as a pipe through which large sums of money are being taken away (illegally).

1.3       Objectives of the Study

The main objective of this study is to determine the effect of compensation management on employee performance. Specific objectives include;

  1. To know if a fraud practice in the bank affect the bank
  2. To find out the impacts of fraudulent acts of bank, over the transaction of their customers
  • To examine the existence of measures in Banks that can be used to check such fraudulent acts
  1. To know the measures the auditors used for prevention and control of such fraud practices in Banks (Commercial Bank)

1.4       Research Questions

The magnitude of the above problems, its implication to the banking industry has enabled the research content to answer the following questions.

  1. How does a fraud practice in the bank affect the bank?
  2. What are the impacts of fraudulent acts of bank, over the transaction of their customers?
  • What are the existence measures in Banks that can be used to check such fraudulent acts?
  1. What measures can the auditors used for prevention and control of such fraud practices in Banks (Commercial Bank)?




1.5       Research Hypotheses

Hypothesis I

H0:       There is no fraud practice in the bank that affect the bank

Hi:       There is fraud practice in the bank that affect the bank

Hypothesis II

H0:       There are no significant measures auditors use for the prevention and control of such fraud practices in Banks (Commercial Bank)

Hi:       There is a significant measure by which auditors use for the prevention and control of such fraud practices in Banks (Commercial Bank)

1.6       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.

1.7       Scope of the Study

This project entitled “the role of auditors in prevention of fraud in Banking Industry; A Case Study of Union Bank” focused on fraudulent activities in the banking sector. The project covers the act of fraud and forgeries in the banks, the effects it has on the banks and means of correcting the anomalies. In order to attain the objectives of this research work, the scope of the study has been defined to embody all relevant aspects of fraud in banking operations.


1.8       Limitations of the study

The demanding schedule of respondents at work made it very difficult getting the respondents to participate in the survey. As a result, retrieving copies of questionnaire in timely fashion was very challenging. Also, the researcher is a student and therefore has limited time as well as resources in covering extensive literature available in conducting this research. Information provided by the researcher may not hold true for all businesses or organizations but is restricted to the selected organization used as a study in this research especially in the locality where this study is being conducted.

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.

Finally, the researcher is restricted only to the evidence provided by the participants in the research and therefore cannot determine the reliability and accuracy of the information provided.

1.8       Definition of Terms

AUDITORS: An auditor is a person authorized to review and verify the accuracy of financial records and ensure that companies comply with tax laws. They protect businesses from fraud, point out discrepancies in accounting methods and, on occasion, work on a consultancy basis, helping organizations to spot ways to boost operational efficiency. Auditors work in various capacities within different industries


FRAUD:        Fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate civil law (i.e., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compensation), a criminal law (i.e., a fraud perpetrator may be prosecuted and imprisoned by governmental authorities), or it may cause no loss of money, property or legal right but still be an element of another civil or criminal wrong.

BANKING INDUSTRY:     The banking sector is an industry and a section of the economy devoted to the holding of financial assets for others and investing those financial assets as a leveraged way to create more wealth.