TABLE OF CONTENTS
Table of Content
- Background of the study
- Statement of the Study
- Objective of the Study
- Scope of the Study
- Significant of the Study
- Limitation of the Study
- Research Methodology
- Plan of the Study
- Literature Review
- Nature and Types of Fraud
- Causes of Frauds
- Effect of Fraud
- Frauds Control policy and fraud control framework
- Frauds Prevention Strategies
2.7 The Strategic Method of Fraud Detection
- Research Methodology
- Population under Study
- Sample and Sampling
- Sources of Data
- Methods of Data Collection
- Methods of Data Analysis
- Research Limitation
- Presentation and Analysis of Data
- Data Analysis based on past Journal of Fraud Case in Bank
- Presentation of Responses on the Oral Interview Conduct
Fraud detection is becoming increasingly important to managers of organizations, to internal and external auditors, and to regulators. Recent events, such as revelations of fraud-related problems at HEALTH SOUTH, Enron, and WorldCom, and the Sarbanes-Oxley Act stress the importance of early detection of fraud. Financial statement frauds have weakened investor confidence in corporate financial statements, led to a decrease in market capitalization, and have contributed to four of the 10 largest bankruptcies in history.
Case of Fraud, Several years ago, a senior vice president of a bank embezzled nearly $14 million over a 16-year period. When the fraud was discovered through a customer complaint, the bank sued its external auditors for negligence in not detecting the fraud. The fraud had been committed by manipulating, looting and abusing customer accounts and maintaining several slush accounts with sufficient funds to handle problems when customers complained.
To determine whose responsibility it was to detect the fraud, a strategic approach was used. For this fraud, the various kinds of symptoms that could have been present were identified and catalogued. Once the possible symptoms were known, 16 years of bank records (from microfiche and corporate databases) were combined into a searchable database. Using the searchable database, queries for possible symptoms previously identified were made.
- BACKGROUNG OF THE STUDY
In the primitive days, man started his transaction with his follow man with the methods of “Trade by Barter” the need for recording, keeping or auditing did not rise, however, the advert of money and the consequent increase in the number of transaction made keeping of record and accounts and their audit avoidable.
In those days keepers need “to account to the selected men integrity who listen to oral evidence, who heard them and testifies to their correctness or otherwise, later on the complexity of the modern business transaction necessitates the voluminous account keeping and intimately the scientists examination of account now called modern auditing.
The origin of auditing is as a result of the separation of ownership from control. It is instituted to protect the interest of the owners by ensuring the financial statement is justified. Because of the separation of ownership from control, it becomes necessary for those managers entrusted with owners financial resource report (Stewardship Reports) to their employer(s). The presented might contain errors, refusal to disclose fraud and irregularities.
The audit of the book and records of a bank is similar to the audit of any other commercial organization in the sense that the audit has to report to the account present at true and fair view of the state of the affairs of the banks and of the profit and loss covered by the account. However, because of the peculiarities of a banks operation, which are governed by the bank and financial institutions Decree 25 of 1991 as amended, the audit procedure for a bank defers from that of a typical commercial organization.