THE EFFECT OF ACCOUNTING SYSTEM IN PREVENTING FRAUD IN THE BANKING SECTOR IN NIGERIA

Abstract

The study was conducted to investigate the relationship between accounting control system in ameliorating fraud in the banking sector. The objectives of this study were to determine the influence of accounting standards in preventing misappropriation in the banking sector. To find out the effect of accounting standards on prevention of falsification of records. To determine the relationship between adequate documentation and misappropriation prevention of funds in the banking sector. To find out the influence of adequate documentation in preventing falsification of records. The study used questionnaire instrument and data were analyzed using Statistical Package for Social Sciences (SPSS) version 21. The research questions were analyzed using mean and standard deviation and hypothesis were tested using Simple Bivariate correlation Analysis at a significant level of 0.05. The results of the findings showed that there was a very strong positive significant relationship between accounting standards and fraud prevention measures of banks in Nigeria. Hypothesis one and two tested showed that accounting standards has a very strong positive significance on prevention of misappropriation and a very strong positive significance on accuracy of prevention of falsification of banks in Nigeria. Testing of hypothesis three and four reveal that adequate documentation has a strong positive significant relationship on prevention of misappropriation and accuracy of prevention of falsification. Based on the findings, the following recommendations were made: Banks should comply with accounting standards in their records keeping and transaction in order to enhance them in yielding higher profitability and effective audit performance. Banks should make effort to keep and prepares adequate documentation in order to avoid statutory sanction and enhance profitability. The record keeping of the banks should not only be financially sided but should include all information useful for decision making as statutorily required.