Internal Control: A Tool for Fraud Control in Deposit Money Banks in Nigeria

The quest to curtail or eliminate frauds, errors, and irregularities has made the institution of appropriate internal control inevitable in organizations especially banks where the object of trade is money. The study, therefore, explored the use of internal control as a tool for fraud control in deposit money banks in Nigeria. A survey research design was adopted for the study with data collected using structured questionnaires from fifteen deposit money banks in the Enugu metropolis. The result of the hypothesis tested using Chi-Square (Fisher’s Exact Test) indicates that control environment, control activities and monitoring activities contribute significantly towards fraud control in an organization. The implication of the finding is that internal control is a vital tool that protects organizations without which the organization must collapse due to fraud. One of the recommendations is that management should always ensure that strong and appropriate control activities are always in place to prevent financial leakages and promote accountability in the organization. To that effect, there should also be appropriate segregation of duties to reduce a person’s opportunity to commit and conceal fraud or errors. Also, the appropriate level of management should approve and authorize all transactions within a specified limit, and authorization should require a dual signature. Also, there should be secured facilities and controlled access to computer programs and data files.

Keywords: Internal Control, Control Environment, Control Activities, Monitoring Activities, Fraud, Deposit Money Banks, Nigeria