1.1 BACKGROUND OF THE STUDY
It is a known fact today that most companies functioning
effectively as fail to do so has their glory ordeal tested on the management
acumen (ability to understand and judge clearly). This mean s that the
financing and management of any organization is the prerequisite for the
success of such organization be it bottling company manufacturing or services
In view of the above, the need for effective company or
organization and operation of good internal control arises.
Internal systems are designed to ensure that the business
concern is carried out in line with well-defined objectives and goals. The
system of internal control is important in any organization which statutory
responsibility is to ensure that proper accounting records are kept and annual
accounts are presented to the members.
This responsibility can be effectively discharge by the
management of this organization by installing a system of internal control to
ensure that the Nigeria breweries plc, the employees of the company properly
carry out operation. The management can then rely on this system for the
production of reliable management information, adequate
financial reports, prevention of errors and detection of fraud and loss of
1.2 STATEMENT OF THE STUDY
Companies and organization have taken a lot of measures to
detect, prevent and to curb fraud, some level of success have been recorded,
yet they have never attain the height that would have been reached if they have
employed the internal control system methods. Without an internal control
system it would be difficult to check and prevent fraud since fraud usually
originated from within an organization. Therefore the need for internal control
system in an organization to preventing fraud cannot be over emphasized.
1.3 AIMS AND OBJECTIVES OF THE STUDY.
Apart from satisfying the requirement for the award of
Higher National Diploma in accountancy department, the study is carried out to
show how internal control system can be adopted in preventing, detecting and to
check fraud in an organization. Internal control system is triggered to tackle
the following fraud related cases in an organization.
To ensure compliances with procedures i.e (the internal
control policies and procedures) adopted by the management must be complied
To minimize, if not eliminate fraudulent act, the regular
compliance with polices and procedure of the organization, which safeguard the
assets, and accounting records of the organization must minimize.
To correct errors in the records. The aims of internal
control in an organization to sort out many things while it is the guideline
principle for the management and the correction of error in the accounting
To identify the important of internal control system of
organization. The rate of internal system in the organization must be
identified which means the effective and efficient of internal control system
in the organization.
1.4 SIGNIFICANCE OF THE JURISDICTION.
Most business organization, had been handling the internal
control system with levity’s hand, hence fraud is easily committed. This
project would give basis knowledge and clear understanding of internal control
system and how fraud can be detected and prevented or minimize in Nigeria
The internal control system would also identified the
various methods and use to defraud co-operate entities.
1.5 SCOPE AND LIMITATION OF THE STUDY
Internal control system, detection and prevention of fraud
in a business is a very wide topic which requires time if one want to writes
exhaustively on the topic. As a result of this , the study is centered mostly
on the use of internal control system as a medium of checking and preventing
any form of fraud in an organization.
The study is specifically carried out with a particular
reference to the Nigeria breweries plc, Ijora Lagos.
Time and other factors, such as inadequate of materials
affected the research work; also there is a difficulty in collecting all the required
information for the study. On the other hand, I faced some difficulties in
convincing the staff of the organization that the study was purely for academic
purposes. This constrains arose from the nature of the organization where such
information is guided in utmost secrecy. It therefore was not an easy task
collecting and coordinating such detail information for the organization.
1.5 ORGANIZATION AND PLAN OF THE STUDY
This research work is made up of five chapters. Chapter one
serve as the introductory chapter and it took a general look into the
background of the study, statement of the problems, aims and objective of the
study, significance of the jurisdiction, scope and limitation of the study and
as well the definition of unfamiliar terms.
Chapter two looks into the literature review, definition of
internal control system, the features of internal control system, objectives of
internal control system, the efficiency and effectiveness of internal control,
definition and causes of fraud, detection and prevention of fraud, common
fraudulent practice, fraud prevention measures, definition of investigation,
mode of investigation, objectives of investigation, internal check and audit,
function of internal audit, reliance and evaluation of internal audit.
Chapter three serve as the research methodology. Here the
different methods of data collecting in the cause of doing the study were
considered, the sample designers and procedures for the analysis of data also
Chapter for is the chapter for data presentations analysis
and finding of the study.
Chapter five which is the lat chapter dealt with the summary
conclusion and recommendation.
1.6 DEFINITION OF UNFAMILIAR TERMS