AN APPRAISAL OF THE COMMERCIAL BANKS AND THE INTERNAL CONTROL SYSTEM IN NIGERIA
This research work was geared towards findings how effective the present internal control system is in our commercial banks, using UNITED BANK FOR AFRICA (UBA) as a case study. This research work was carried out in Enugu commercial banks with a special reference to (UBA). The study is divided into three chapters, each dealing with particular aspect of the research work.
Chapter one: treated the introduction of the study including the statement of problems, objectives of the study, the significant of the study and the scope of the study.
Chapter two: covered the literature review wish is the secondary data of the study.
Chapter three: highlighted the research findings, made necessary recommendations and concluded the research work. From our finding, it was ascertained that banks internal control system in Nigeria are good but are being handled by corrupt people, there by causing steady, fraud in the banks, also in this chapter recommendations that will bring about effective internal system was given.
TABLE OF CONTENTS
1.1 Historical background of nigeria commercial banks
and their internal control system of accounting records
1.2 Statement of the problem
1.3 Objective of the study
1.4 Significance of the study
1.5 Scope and limitation of the study
Review of related literature
2.1 General approach to internal control system
2.2 Objectives of internal control system
2.3 Principles and characteristics of internal control system
2.4 To categories of internal control system in banks
Findings, conclusion and recommendation
3.1 Summary of findings
1.1 HISTORICAL BACKGROUND OF NIGERIA COMMERCIAL BANKS AND THEIR INTERNAL CONTROL SYSTEM OF ACCOUNTING RECORDS
The evolution of commercial banking in Nigeria dates back to 1982 when African Banking Corporation was established and later called First Bank of British West African (now called first Bank of Nigeria limited). In 1984, as per their internal control system, it is as old as the evolution of commercial banking activities in Nigeria. This is sequel to the nature of banking business as we know, all activities of the bank are summarized in one account or the other. A lot of personal and impersonal account are being kept by commercial banks and its safety and activity have to be ensured.
As an open secret, commercial banks do not have very large resource of their own in relation to the total resources at their disposed. They depend in the main, on the people’s funds which have been entrusted to them because those people (the bank’s depositors) have confidence in them as models of responsibility and safety. Consequently, the continued existence of commercial banks rest delicately on the maintenance of public confidence. This can only be achieved through sound internal control system of the whole accounting activities.
In contrast, the public confidence have, at times being betrayed. It is a cheer fact that banking in Nigeria hence been looked upon as models of safety but unhappily, in none recent times public confidence has receives some rude shocks due to a member of some banks running in to trouble, the arose not so much through fraudulent use of funds, although sometimes this was once case, but rather through some fraudulent practices hydration of some dishonest staff perfected through some defects in the internal control hence, there is need to climate or minimized these defects or loopholes.
Moreover, with the increase one technological advancement and increase in the member of federation, their operational scope become more sophisticated day. Again, the introduction of computers in some branches, as new innovation demands a change or improvement in the internal control system of the bank concerned.
1.2 STATEMENT OF THE PROBLEM
Case of fraud, missing files and ledgers cards, and other banking malpractices had been on the increase today despite the various internal controls and devices adopted to detect them. As a result, the staff, shareholders and customers of various commercial banks are worried, and at times, frustrated over growth of these problem.
Moreover, the continued increase in the available volumes of accounting records of every commercial bank due to increase in commercial banks branches and their respective roles necessitate the appraisal of the adequacy and effectiveness of these controls so that their operatives can be orderly contained.
Furthermore, the increase in crime-was-technological advancement posses a great danger to the authenticity of banks accounting records, hence the relevance of our present controls have to be tested.
1.3 OBJECTIVE OF THE STUDY
The major objectives of this research are:
(1) To identify and define the v various internal control being practiced by various commercial banks in Nigeria.
(2) To identify possible loopholes (if any) and relevance of the present adopted controls in order to find means of correcting if or whether an alternative is needed.
(3) To ascertain the extent of compliance of the members of staff in order to recommend operating improvements.
(4) To analyze critically the soundness, adequacy and applications of the various internal controls of accounting records.
(5) To offer useful recommendations based on our findings, this is with respect to the nud for qualificative banking services for the populace and towards accelerated banking development for the nations.
1.4 SIGNIFICANCE OF THE STUDY
This research will be of paramount importance to the entire member of banking staff especially the managers and other officers of the Nigeria banking industry, this research will serve them as a guide in the performance of their respective duties. It will also help them in appreciating the importance of various internal control methods adopted by their respective banks especially for its branch operations.
Again, it will be of immense help in the manpower development programme of various banks. Research institutions and higher institutions like universities, polytechnics, etc. it will help their staff on early deletion of fraud and its implications and other deviations or approved accounting records that might cause differences in balancing figures of banking industry. Furthermore, it will be vital contribution toward research on improvement of banking customers, shareholders and government. Finally this research will be of immense value to both practicing accountants and lawyers in their audit and legal works respectively. It will serve as a good reference guide to them.