1.1 BACKGROUND OF THE STUDY
The role of auditors in fraud control assessment in banks is essential. Moreover, the audit function plays a crucial role in the ongoing maintenance and assessment of a bank’s internal control, risk management and governance policies thus, adding value and assisting in the achievement of the management’s goals. In the intermediation, banks mobilize savings from the excess units of the economy and channel these to the deficit units, significantly non-public business enterprises for the aim of increasing their productive capability. Matthew (2001), asserts that company money scandals within the USA like Enron and Tyco debacles send shockwaves within the company world, restrictive authorities, audit fraternity and also the economic world society at massive. These have diode to the erosion of capitalist confidence within the money markets. The incidence of fraud and misappropriation of funds in recent time poses a threat accounting profession due to its perennial nature. This has resulted to queries on whether or notaccountants truly play any vital role towards the attainment of responsibility and hindrance of fraud particularly that that is presently happening in our major or key money establishments. With associate upsurge in money accounting fraud within the current economic state of affairs fully fledged, moneyaccounting fraud detection has become associate rising topic of nice importance for educational, analysis and industries. During this age of technology, fraud investigators will not be happy with simply auditing or accounting skills, these investigators ought to be trained as rhetorical accountants and this coaching ought to embrace an in depth information of accounting data. Besides the role contend by industry in growth and development of the state economy, fraud goes an extended manner in depriving the economy of needed the mandatory funds required for sound economic activities. It had been discovered that the actions taken by the management of the banks within the aftermath of fraud cases are inadequate in stopping another fraud from been perpetrated. According to a study dispensed by Onwujiuba (2013), it had been disclosed that the managements of industry are not put up enough measures that may stop and management banking frauds, hence, the rationale for incessant fallacious practices in African country. Adeyemi and Uadiale (2011) opined that the present duties and responsibilities of auditors are inadequate and aren't clearly outlined. Also, the expectation of the folks on the problems of the auditors' responsibilities in detection and curtailing fallacious 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 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 audit unit did not contribute significantly to fraud prevention and control in reality. The question is, is auditing a tool for fraud risk assessment in Nigeria’s banking industry? In view of this, the study was carried out to investigate auditing as a tool for fraud risk assessment in commercial banks in Nigeria.
1.2 STATEMENT OF PROBLEM
Fraud is a challenge in organizations regardless of which type. Research has shown that inability of assessing fraud risk with accuracy can cause fraud not being detected, also improper recording of financial statement have accounted for the rise of irregularities and some acts usually perpetrated by some staff and members of management in a financial institution (Olowookere, 2001).Furthermore, despite the independence of auditors, fraud is still in the increase and most organizations has internal control system that checkmates the operations of the organization but fraud still exist within the organization. In order to protect our banking sector, it is crucial to examine the level of assessment of fraud risk with respect to financial statement audits.
1.3AIMS OF THE STUDY
The major purpose of this study is to examine auditing as a tool for fraud risk assessment in commercial banks in Nigeria. Other general objectives of the study are:
1. To examine the activities of auditors and how it contributes to reduce fraud in the banking sector
2. To examine the roles of auditors in fraud risk reduction.
3. To examine how the impact of auditors in fraud risk management.
4. To examine whether independence of auditors reduces fraud risk.
5. To examine the relationship between role of auditors and fraud risk assessment.
6. To examine the constraint faced in minimizing fraud risk in commercial bank.
1.4 RESEARCH QUESTIONS
1. What arethe activities of auditors and how it contributes to reduce fraud in the banking sector?
2. What are the roles of auditors in fraud risk reduction?
3. What are the impacts of auditors in fraud risk management?
4. Does independence of auditors reduces fraud risk?
5. What is the relationship between role of auditors and fraud risk assessment?
6. What are the constraints faced in minimizing fraud risk in commercial bank?
1.5 RESEARCH HYPOTHESES
H0:Auditing does not aid in fraud risk reduction in Nigerian banks.
H1:Auditing significantly aids in fraud risk reduction in Nigerian banks.
H0:There is no relationship between role of auditors and fraud risk assessmentin commercial banks in Nigeria
H1:There is a significant relationship between role of auditors and fraud risk assessment in commercial banks in Nigeria
1.6 SIGNIFICANCE OF THE STUDY
This research would be of interest to the management and employees of Nigerian banks. This topic is significant for business management, shareholder and the overall financial community because of the best use of assets comes from auditing from its responsibilities especially after financial crisis all over the world that makes auditing significant in monitoring and evaluation of fraud risk in Banks. This study keeps track of developments and trends in the field of auditing, whether in the field of professional standards or practices and modern methods and tries to apply this Development in Nigeria. The study would serve as reference materials to other researchers who may want to carry out more research on this or related topic. The study would broaden the researcher knowledge on the subject
1.7SCOPE OF THE STUDY
The study is based on the auditing as a tool for fraud risk assessment in commercial banks in Nigeria.
1.8 LIMITATION OF STUDY
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.
1.8 DEFINITION OF TERMS
Auditor: Auditor is a qualified accountant who also passed a professional examination. Such a person must be of good conduct and have a vast knowledge and able to understand a practical business, endeavor always to grasp the technicalities and business, methods of any concern whose account he undertakes to audit.
Audit: This is an audit carried out by an independent person who is not an employee of the enterprise.
Audit: Audit can be define as the independent examination of a financial statement and expression of opinion on the financial statement of enterprise by an appointed auditor in pursuance of that appointed and in compliance with any relevant statutory obligation.
Fraud: Is an act or course of deception, deliberately practiced to gain unlawful or unfair advantage; at the detriment of another, it is also defined as a conscious premeditated action of a person or group of persons with the intention of altering the truth and or fact for selfish personal monetary gain
Forensic Auditing: as the utilization of specialized investigative skills in carrying out an enquiry conducted in such a manner that the outcome will have application to the court of law.
Can't find what you are looking for? Hire A Researchproject Writer To Work On Your Topic or Call 0806-703-7559.
Proceed to Hire a Writer »