Management Responsibility In Fraud Detection
(A Case Study Of Bergel Cosmetics Industry Nigeria Limited Aba)
Management responsibility in fraud detection encompasses a dynamic and intricate set of tasks aimed at identifying, preventing, and addressing deceptive practices within an organization. At its core, this role involves the establishment and enforcement of robust internal controls, fostering a culture of ethics and compliance, and deploying proactive monitoring mechanisms. Managers play a central role in implementing a comprehensive fraud detection strategy, integrating technological solutions and human expertise to scrutinize financial transactions, operational processes, and employee behavior. Moreover, they need to continually adapt and enhance these measures to stay ahead of evolving fraudulent tactics. Effectively managing responsibility in fraud detection requires a combination of strategic foresight, vigilant oversight, and a commitment to instilling integrity across all levels of the organization, thereby safeguarding its financial well-being and reputation.
Fraud involves willful misrepresentation, the deliberate concealment of a material fact5 for the purpose of inducing another person to do something unethical or the failure to disclose of a material fact.
Therefore any material alteration, erasure, removal which is done to deserve and to cheat an unsuspecting victim, constitutes fraud.
Against this background, it is easy to observe that frauds are umbrella crime concept covering a wide range of criminal behaviour. Most frauds are rooted in the destroy by some individuals to get to confer some advantages
(mainly financial) which the fraudster does not desire. No wonder the federal government of Nigeria has declared this cancer worm a national issue and has constituted anti-corruption commission to deal with it.
Title page
Approval
Dedication
Acknowledgement
Abstract
Table
CHAPTER ONE
1.0 Introduction
1.1 Background of the study
1.2 Statement of the problem
1.3 Objective of the study
1.4 The relevance of the study
1.5 Research questions
1.6 The scope of the study
1.8 Limitation of the study
1.9 Definition of the terms
CHAPTER TWO
2.0 Literature review
2.1 Definition of fraud
2.2 Causes of fraud in business organization
2.3 Prevention of fraud in business organization
2.4 Identification of fraud in business
2.5 Ways to detect fraud in business
2.6 Protection of identity
CHAPTER THREE
3.0 Research methodology
3.1 Research design
3.2 Questionnaire design
3.3 Population and sample size selection
3.4 Source of data
3.5 Data collection
3.5.1 Survey method
3.5.2 Observation method
3.6 Method of data analysis
CHAPTER FOUR
4.0 Presentation and analysis of data
4.1 Presentation of data
4.2 Analysis of data
4.3 Testing of hypothesis
4.4 Discussions of major findings
CHAPTER FIVE
5.0 Summary, conclusion and recommendation
5.1 Summary of finding
5.2 Recommendation
5.3 Conclusion
Bibliography
BACKGROUND OF THE STUDY
The management of business risk is one of the important issues facing business. Any risk may be a serious threat to an organizations well being. Fraud is a real threat to the financial health of an organization and to its image and reputation. Therefore management has to understand the potential consequences of fraud on their business and then the need to reduce risk through developing an anti-fraud culture across their business by introducing appropriate policies, controls and procedures on how to deal with fraud in an organization.
Fraud can be described as cancerous premeditated action of a person or group with the intention of altering the truth of fact for selfish personal monetary gain. In involves the use of decent and trick and sometimes highly intelligent cunning and know how. The action usually takes the form of forgery, falsification of documents and forgery of signature in and out right theft.
Fraud also involves will fill misrepresentation, the deliberate concealment of a material fact for the purpose of inducing another person to do something unethical or the failure to do disclose a material fact. Therefore any material alteration, whether by addition, insertion obliteration, erasure, removal which is done to deceive and cheat an unsuspecting victim, constitutes a fraud. Against this background, it is easy to observe that fraud is an umbrella crime concept covering a wide range of criminal behaviour. Most frauds are routed in the desire by some individuals to get rich quick, while virtually all frauds are perpetrated with intent to confer some advantage mainly financially which the fraudster does not desire.
The fraudster government of Nigeria seems that this cancer worm (fraud) has increased constituted anti-corruption commission to deal with it.
1.2 STATEMENT OF PROBLEM
For the past years, the risk of fraud has been a barrier to all business both small and medium size business.
Is spite of all attempts been made by the fraud advisory panel that was established 1998, unfortunately such efforts have not been fruitful due to lack of internal controls and resources internal auditors or human resource departments which can help during the course of their other work in the fight against fraud.
The risk of fraud in Bergel Cosmetics Industry has increased due to the fact that new employees are not provided with the business fraud policy statement and prevention and detection matters are not included in the induction programmes and continuous carrier training.
Besides this has led to poor turnover as invest fear of being defrauded.
1.3 OBJECTIVE OF THE STUDY
The objective of this study is thus:
To identify the risk of fraud in business
To examine the various ways of fraud detection
To consider productive steeps to prevent fraud in business
To examine the factors that is responsive for the ineffective implementation of antifraud policies.
In the light of the above to make necessary recommendations
To identify the loopholes for funds siphoning in the system.
1.4 THE RELEVANCE OF THE STUDY
The relevance of this study derives from its usefulness to the following;-
1. Organizations; – The management at business organization will be to detect the risk of fraud and to adopt anti-fraud measures that will help to reduce the risk of fraud in business organization. By so doing it will enable them to carry out business transactions with so many people without lost of reputation.
2. Government: since the risk of fraud affects investors and the society at large, it will be seen in this study the need to formulate and implement anti-fraud measur5es that will help to create conducive business environment for investors so that investors will invest without having the fear of being defrauded.
3. Individuals: despite all of the modern technologies, stealing someone’s identity may be easier than ever imagines using a stolen cheque of deposit slip, blank or filled, all these are risk of fraud an individual can face. This study will enable an individual to know ow how to protect him/her from falling victim of this loss.
4. Students and researchers: the study will also be useful for academic purpose. It will serve a data bank for anybody who will carry out a related study in the future; furthermore, the research finding can provide the basis of further studies.
1.5 Research questions:
The following questions were postulated owing to the
importance of the study and the need for a more
comprehensive research work.
Is fraud the only criminal practices in the management responsibility?
What are the causes of financial fraud in the system?
Does fraud exist only in the top management
level?
Is there effective internal control system in checking management responsibilities in fraud?
Is there success or failure in measuring the internal control machinery?
What are those loopholes for fund siphoning in the system?
1.6 HYPOTHESIS
HO: most fraud are not caused by poor condition of service.
Hi: Most frauds are caused be poor condition of service.
Ho: Without effective control measure management cannot reduce fraud.
Hi: without effective control measure management can reduce fraud.
1.7 THE SCOPE OF THE STUDY
This study focused on the management responsibility in fraud detection in budget cosmetics industry Nigeria limited Aba.
This study will also investigate how fraud affects the reputation and image of any business organization.
The study will identify the measures to be taken to prevent the risk of fraud in business organization.
The study should have been wider but the choice of one state is however considered because of time and financial constraints.
1.8 LIMITATION OF THE STUDY
The limitations of the study are as follows:
i. UNCOOPERATIVE ATTITUDE OF SOME INDIVIDUAL:
Some of those who where asked to complete the questionnaires declined. This affected the amount of information available to the study.
ii. FINANCIAL CONSTRAINT: the study should have been extended beyond Bergel cosmetics industry Nigeria limited Aba to include other towns if the researcher had adequate financial the study was limited to Aba.
iii. TIME CONSTRAINT: the study was carried out at a time other academic work placed much demand on the researcher, consequently the researcher did not have ample time to complete the study.
1.9 DEFINITION OF TERMS
i FRAUD: this is misrepresentation made knowingly with
the intention to deceive.
ii FRAUD BOOSTER: it refers to a person professionally
training and equipped to detect fraud and fraud men.
iii FRAUD MEN: it refers to those who are professionally habited to defrauding people of their legally acquired property or money.
IV IMPERSONATION: this is the assuming of another person identity in computer processing environment.
V FALSE DOCUMENT: A document that contains fictitious information but made to look real.
VI DATA DIDDLING: this involves the changing of data before or during input to computer.
Vii TOKEN: as it is used in this work, it means customers possessions such as credit card etc.
Management Responsibility In Fraud Detection:
Management plays a crucial role in fraud detection and prevention within an organization. Effective management responsibility in fraud detection involves several key aspects:
Establishing a Fraud Prevention Culture: Management must set the tone for the organization by fostering a culture of ethics and integrity. This includes promoting honesty, transparency, and accountability at all levels of the organization.
Risk Assessment: Management should regularly assess the organization’s vulnerability to fraud by identifying potential risks and weaknesses in internal controls. This includes evaluating processes, systems, and personnel that may be susceptible to fraudulent activities.
Implementing Internal Controls: Management is responsible for designing and implementing internal controls to mitigate the identified risks. These controls can include segregation of duties, access controls, approval processes, and monitoring mechanisms.
Monitoring and Oversight: Management should establish ongoing monitoring processes to detect and prevent fraud. This involves regularly reviewing financial transactions, employee behavior, and other relevant data for any suspicious activities or anomalies.
Whistleblower Programs: Management should encourage and support the use of whistleblower programs that allow employees, vendors, and other stakeholders to report suspected fraud or unethical behavior confidentially and without fear of retaliation.
Training and Awareness: Management should ensure that employees receive adequate training and education on fraud prevention and detection. This includes understanding common fraud schemes, recognizing red flags, and knowing how to report concerns.
Auditing and Investigation: Management should work closely with internal and external auditors to conduct regular audits and investigations to identify potential fraud. This includes following up on any irregularities discovered during audits.
Reporting and Communication: Management has a responsibility to communicate fraud prevention efforts and results to relevant stakeholders, including the board of directors, shareholders, and regulatory authorities when necessary.
Response and Remediation: In the event that fraud is detected, management must take swift and appropriate action. This may involve initiating an internal investigation, involving law enforcement if necessary, and implementing corrective measures to prevent future occurrences.
Continuous Improvement: Management should continuously evaluate and improve the organization’s fraud prevention and detection processes. This includes learning from past incidents and adapting to new and evolving fraud schemes.
Legal and Regulatory Compliance: Management must ensure that the organization complies with all relevant laws and regulations related to fraud prevention and detection, including reporting requirements.
Resource Allocation: Management should allocate the necessary resources, including budget and personnel, to effectively address fraud prevention and detection efforts.
In summary, management responsibility in fraud detection involves creating a culture of integrity, assessing risks, implementing controls, monitoring activities, responding to incidents, and continuously improving fraud prevention efforts. It requires a proactive and vigilant approach to protect the organization from financial losses and reputational damage associated with fraud.