INTERNAL CONTROL SYSTEM IN BANKS PROSPECTS AND PROBLEMS

TABLE OF CONTENT

Title page

Certification

Dedication

Acknowledgement

Abstract

CHAPTER ONE

INTRODUCTION

1. Background of the study
2. Statement of the problem
3. Justification of the study
4. Statement of hypothesis
5. Objective of the study
6. Scope of the study
7. Plan of the study.

            CHAPTER TWO

LITERATURE REVIEW

• Introduction
• Concept of internal control
• Classification of internal control
• Types of internal control
• Reliance on internal control
• Axes on internal control
• Objective of internal control
• Environment of internal control
• Requirement for effective control
• Application of Internal Control
• Limitation of internal control

             CHAPTER THREE

RESEARCH METHODOLOGY

• Types of Data
• Research design
• Sample procedure
• Method of data analysis

CHAPTER FOUR

PRESENTATION AND ANALYSIS OF DATA

• Data presentation
• Data analysis
• Findings.

           CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

• Summary
• Conclusion
• Recommendations
• Suggestion for further research
  Bibliography

CHAPTER ONE

INTRODCUTION

  1.1     BACKGROUND OF THE STUDY

Banks are very important in any nation; they are the backbone f the nation’s economy. Function of banks according to Ezeudiji (1997), including money creation, acceptance of deposit from the customers, provision of facilities for domestic and foreign remittance, help government in implementing monetary policies e.t.c.

According to Benaijee (2001) internal control system is whole system of control, financial and otherwise established by the government in order to carryon business of the enterprises in an orderly manner, ensure adherence to management policies safeguarding the assets and ensure as far as possible the completeness and accuracy of accounting records”.

The function of internal control system includes the detection of error, early detection of fraud and protection or safeguarding of business assets but despite the fact that all banks have internal control system, there have been a lot of problems in the banking sector. Ranging from bank liquidating to defrauding the banks, many banks have been liquidated example of such bank include Savannah bank Plc, National Bank Plc (although it is now being resuscitated) merchant bank Nigeria limited. Nigeria international bank limited to mention few.

According to Central Bank of Nigeria (CBN) annual report over (N16,billion) sixteen billion naira was defrauded from the banking sector, also recently a bank was suspended from the cleaning system by the central bank of Nigeria (CBN) because of mis-management of banks resources expert have given reasons as to what causes banks distress. According to Exeudiyi (1997) one of the   causes   of  bank   distress   is  the   internal   control   system problems include poor or lack proper authorization of loan and contract, poor loan recovery, failure to collect proper collateral security, management override the control e.t.c.

According to Koroye (1989). It a bank interval control (detective in any significant way. then) that audit should be decline outright or opinion must qualified as strictly as possible. It is because of two main reasons.

(1)       Banking transaction are very prone to fraud

(2)       The   auditor will   take forever  action   to  vouch  the transaction to obtain substantive audit transaction.

1.2 STATEMENT OF THE PROBLEM

Internal control system many organization, including bank is very   important   because   it  ensures  orderliness,   in  the organization, advance to management policies, early detection of error and fraud, protection of assets e.t.c internal control system problems have led to closure of many banks in Nigeria, Ezeudiji   (1997)   thereby   making   depositors   customer   to shareholder of such banks to loss his or her shares.  It is inimical to nations economy because provide 90% of the capital employed in Nigeria. Due to the following problem it leads to the following questions. Does bank operation carried out in any orderly manner, and follow the procedure laid down? Does transactions recorded accurately and correctly?.