SOURCE:

Faculty: Management Sciences
Department: Accountancy

CONTRIBUTORS:

Ugwu, I. V.
Osisioma, B. C

ABSTRACT:

This study investigates the extent to which the application of internal audit function combats fraud risk in banks. The main focus of the study is to broadly test the perceptions of fraud auditors, internal auditors and accountants on whether the application of data mining tool, proactive function, ongoing function and interactive function in internal audit combat fraud risk in banks. A survey research design was applied for this study. Data was obtained through a survey in which questionnaire was administered on a sample of 400: fraud auditors, internal auditors and accountants, using Taro Yamane’s formulae of sample size determination on a population record of 668 from 15 banks. Four research questions and four hypotheses tested at 0.05 levels of significance guided the study. Parametric analyses were adapted for the study. Within this, Likert Scale rating was applied to answer the research questions and descriptive statistics were used to analyze them, while Analyses of Variance ANOVA was used to test the hypotheses formulated. The major findings of this study indicate that data mining tool, proactive function, ongoing function and interactive function of internal audit are significant tools in combating fraud. Therefore, the aggregate application of these four found variable tools of interest by internal audit function proved significant in combating fraud in Nigeria banking sector. The major recommendations were that various corporations in their daily activity should ensure that an effective internal audit function is established in their daily business operations. This should also include the application of the above four variables of internal audit function in fraud risk management.