CHAPTER ONE
INTRODUCTION
1.1 Background Of The Study
Banks and financial Institutions are the most acceptable versatile, delicate .and popular forms of the present day joint increased capital base and insurance cover has necessitated the demand for more capital . which in must cases has been achieved through issue of shares and subsequently pooling other people’s money in agreement for repayment in terms of loans and other credit facilities and periodic dividends for common stocks and shares. The current day Banks which are now public liability companies have been built on trust, confidence and security of deposits. Right from its inception when the deposit were made in kinds such as gold bars, platinum’s and other valuables whose supposed ready availability gave security to the owners who have deposited them for safe keeping. With the improvement in mode of operation, culture and structure one thing has remained unchanged which is confidence (security). Banks has continued to structure their services with a view to provide customer satisfaction which is built on the foundation of security and trust. Banks and financial institution trade and provide these services of security and trust with other people’ s money not their own money because they do not mint money.
Therefore, it would only amount to misappropriation of fraud, if these services are not rendered with these funds but something of a more private and adverse nature is accomplished with the funds. The effects of ·these actions (if they are allowed to hatch) have precipitated the regulatory boards to mandate banks to publish audited accounts of their periodic activities for analysis. We should stress clearly that it is the need to forestall, bar and check the incidence of misappropriation that is the regulatory authorities insisted that accounts must be audited and published. The joint stock company at of 1844 was the first legislation in Great Britain to require all incorporated business to have their annual financial statement examined by an auditor. Early Auditors are requiring to state whether the accounts owed a true and a fair view of the state of affairs of the company. It was the companies act of 1990 that required the auditor to be professionally qualified (chartered/certified public (accountants) in this case the owner of a business are separated from the administrators of the’ business, there exists a relationship called stewardship and the reports as regards the state of affairs of the business within corresponding period of operation is as stewardship Accounting. When stewardship accounts are presented, the owners (shareholders) of a business are perplexed whether the managers/administrators are being honest in their reports or not. In this vein the owners who have to employ an independent skilled individual known as an auditor to carry out an appraisal or investigation and express an opinion as to whether the accounts present a true and fair view of the state of affairs of the business. Various cases of fraud and misappropriation in sectors of the economy especially amongst public liability companies have called for an appraisal as to the efficiency of audit exercise in fraud prevention and control.
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