Internal control in banks helps to protect the bank against
fraudulent act and practices. Though its procedure varies from one
institution to the other, its aim and objective remains the same.
Internal control have therefore help banks to be better managed, more
liquid and directed toward profit making by the bank. This project is
therefore undertaking to know the effectiveness of this internal control
system and procedures on innovation of product in Nigeria. The result
was that with effective control internally, product would be well
innovated. The result of the findings of the questionnaires would be
tested through the chi-square method.
This research work is an attempt to review thoroughly the
effectiveness or otherwise of internal control system and procedure in a
banking environment. A case study of Wema Bank Plc.
The importance of an effective internal audit, internal
check and control system cannot be overemphasized. More so with
government policy of promoting accountability by others interested with
Auditing can be described as an activity carried out by an
independent person with the sole aim of reporting on the truth. And
fairness of a financial statement. It can be regarded as the activity
embarked upon by the author when verifying accounting data. Determining
the accuracy and reliability of accounting statement. Report and issue
reports based on his finding.
Internal audit can be appropriately termed as one
conducted by employee of an organization into any aspect of its affairs
and work exclusively for the organization. Internal audit can be
described as the eye of the board and the watch of the organization
Internal control is the whole system of controlling
financial and established by management in order to carry on business of
the enterprise in an orderly and efficient manner, ensure adherence to
management policies, safeguard the assets and secure as far as possible
the completeness and accuracy of the records.
1.2 STATEMENT OF THE PROBLEM
The role of internal auditors of an organization has been
under estimated. If not totally relegated to the background when
compared with their counterparts in the private practice.
That is the external auditor may be attributed to the
fact that internal auditors are employees of the organization. The act
of underestimating the role of internal auditor is not exhibited by the
authority alone. Worker of the organization also underrate the work of
the internal auditors.
1.3 SIGNIFICANCE OF THE STUDY
The purpose of the organization research work is to
examine control system in operating in a banking environment to look out
for any loop hole out of any loop hole or weakness in the audit
programme as revealed in the response of questionnaires to be
Study the relation and interdependence the internal
auditors and external auditors. Make recommendations for improvement or a
complete change of the system in operation so that the new improved
methods can be introduced to replace the old system.
The researcher is of the option that the stakeholders of
the research work will be beneficial to all stakeholders in the banking
If the recommendation put forward in adopted, it will
surely go a long way to reduce cases of fraud. Misappropriation
inefficient use of assets and availability.
1.4 LIMITATION OF THE STUDY
Many people believe internal auditor can never be
independent. This is largely true. Since the scope of any internal
department is determined by the management of the organization
concerned. The management also dictates low for the audit department can
carry out its duties and the types expended from them.
1.5 RESEARCH QUESTIONS
It is assumed that lack of adequate and lack of organized
internal audit system creates an avenue for fraudulent practices.
Unreliable accounting data, lack of good and proper maintenance culture,
wasteful spending as well as lack of strict adherence to prescribed
management policies and financial regulations.
Answers to the following questions will be important
1. Does the existing internal audit in the institutions provide safety for their moveable and immovable assets?
2. Is the adoption of good internal audit procedure the
appropriate measure used to eradicate or minimize the occurrence of
fraud and other malpractices in tertiary institutions?
3. To whom should internal audit report to?
4. To what extent should the management take action on the internal audits reports?
1.6 DEFINITION OF TERMS
This can be defined as an independent appraisal function
established by the management of an organization as services to the
This auditing guideline on internal control defines
internal control thus: internal control system is the whole system of
controlling financial and otherwise, established by the management in
order to carry on the business manner, ensure adherence to management
policies safeguard the assets and score as far as possible the
completeness and accuracy of the records.
Internal check is meant on the day activities or
transaction which operates continuously as part of the routine system
whereby the work of one person is proved independently to work of
another, the prevention of error, all transaction independent of each
other. Internal check involve the distribution of duties of accounting
staff in such a way the work of each employee will be subject to
continuous and automatic check by the other members of the company’s
Auditing can be defined as the independent examination of
and expression on the financial statement of an enterprise by an
appointed in pursuance of the appointment and in compliance with any
relevant statutory obligation.
This is an enquiry into the advisability of any of the
policies of the direction in furthering the objects of the company as
defined in the memorandum and into efficiency which they secure the
execution of these policies.
This is audit conducted into organization affairs by
independent auditor. Because the owners (usually) sole proprietors when
the audit to take place not because the law requires it.
These are audits carried out because the law requires
that the accounts be audited at specific intervals. The company and
Allied Matters Act (CAMA ’90) make the audit to limited liability
Company to be compulsory on annual.