CHAPTER ONE
INTRODUCTION
The term fraud, refer to
an international misrepresentation of financial information by one of more
individual among management employees or third parties. The issue of fraud has
become a serious food for times. Consevently more time is spent on board
meeting in an attempt to find section to the presitent fraudulent practice
among management and non management staffs. The issue of standard transaction
practice in any organization should not be left lying occurs in any
establishment will determine the long term survival and growth of the company.
If not handled with care it can lead to corporate failure. The resporability
for the prevention and detection of fraud rests within management through
effective implementation and continues operation of an adequate system of
internal control. The internal control system is defied in the audit standard and
guideline approved by the council that the association of certified accountant
(ACA as the whole system of control, financial and otherwise established by the
management in order to carry on the business of the enterprises in orderly and
efficient management and also adherence to policies of the management.
The internal control of
an organization can be in following
i.
organization control (source) (Ayeni A.P, 2007)
ii.
physical control
iii.
segregation of duties
iv.
personnel control
v.
supervision control
vi.
Arithmetic and accounting control.
SCOPE OF THE STUDY
The small scale industry
covers a relation scope and in a project of this nature a large representations
sample of banky government or private institution and compare should have been
studied. In order to get an under knowledge of the management procedure and
techniques employed in the industries to prevent and detect fraud,
The study has however
been confirmed to the small industries in Oyo state and its environment. While a
descriptive and theoretical approach have been adopted in the analysis of
office field work approach have been adopted. It is the intention of the twitter
to focus on internal control system in the small scale industries.
PROBLEM OF THE STUDY
In carry out the study
the following problems were encountered.
i.
For effective manipulation: the topic was restricted to small scale
industries organization. These industries are both governmentally and privately
owned because of this and the secretive nature of most of the private and
government industries, certain factual information reaccured were considered
very sensitive.
ii.
In choosing the industries, effort were made to secure industries with
those product on hand which will reflect their organization techniques few met
up with this reeavirement where this is possible. However very little corporate
was received from the officer notwithstanding with all these problems it was
possible to highlight the performance of the industries.
THE BACKGROUND OF THE STUDY
The advance learners
dictionary defined fraud as criminal reception an act of a particular person or
things that receives. According to the international auditing guidelines, fraud
is defined as irregularities involving the use of people to obtain an illegal
or unjest advantage which may involve the following.
1.
Supposing or transactions from records of document.
2.
Misapplication of accounting policies, if this is intentional and
deceive full.
The issue of fraud ahs
become a serious food for through for many corporate bodies in the recent
times. Consequently more time is spent on toward meeting in an attempts to find
solution to the persistent fraudulent practice among management and non
management staffs.
The issue of standard
transaction practice in any organization should be left lying low. The
freavency with which it be rears is highly leads in any growth of the company
and if not handed with care can lead to corporate failure. In the recent years,
the general and of the essential product is increasing fairly in and
this will mentally continue. Both the federal, state and local government
carrot fold their arms then resulted into various measures like the
introduction of small scale industries in Nigeria.
Also, in order to meet
such unprecedented demand of a reasonable cost and efficiently here is need to employ
fraud prevention and reflection techniques in organization so as to prevent
them from dying off.
THE PROBLEM OF THE STUDY
In carryout of the study
the following problems were encountered.
1.
For effective manipulation, the topic was restricted to small scale
industries organizations. These industries are both government and private
owned. Because of this and the secretive nature of most of the private and
government industries, certain factual information required were considered
very sensitive and confidential started that there was no adequate structured
or ground to be developed to improve performance in the industries.
2.
In choosing the industries, effort were made to secure industries which
new product on hand which will reflect their organization techniques, few met
this requirement, where this was possible very little co-operation was received
from the officers. Not withstanding with all these problems, it was possible to
highlight the performance of the industries. The study was conducted and a set
of recommendations to help in minimizing fraud in the small scale industries.
THE PROBLEM OF THE STUDY
In carryout the study,
the following problem were encountered.
1.
for effective coverage, the topic was restricted to small scale
organization. These industries are both government and private owned. Because
of this and the secretaries nature of most of the private and government industries,
certain factual information received were considered very creative and
confidential issue that could not be obtained factual information received were
considered very sanative and confidential issue that could not be obtained. The
industries stated that there was no adequate structure on ground to be
developed to improve performance in the or industries.
2.
in choosing the industries, effort were made to secure industries with
new products on hand which will relect their organization techniques few me it
this requirement, where this was possible very little cooperation was recleved
from the officers. Not withstanding all these problem, it was possible to
highlight the performance of the industries. The study was conducted a set of
recommendations to help in minimizing fraud in the small scale industries.
SIGNIFICANCE OF THE STUDY
All organizations whether
profit oriented or not operate within conditions of resources constrafic. As a
result, various steps are taken and procedures established to ensure that fraud
in a small scale industries are prevented and detected in achieving and
maximizing the organization goals. Primarily among the steps. Taken to the
setting up a structure of internal control within which on orderly operation
can take place.
LIMITATION OF THE STUDY
The limitations
to the study are the factor impending the researchers work and such factors
include time duration of the semester, financial constraint and inaccessibility
of relevant and sufficient data. These factors militated against the researches
in such a way that this resulted in the researchers inability to do the work
efficiently. The lack of adequate financial support also delayed researchers to
do with within a reasonable time.
Lastly, the doing
distance of the company has caused the inability or the researchers to travel
down to the companies in order to get data on how to detect and prevent fraud
in small scale industries. The researchers will limit the study to Adegoke grove
companies in .
SCOPE OF THE STUDY
The small scale
industries covers a national scope and in a project of these nature a large
representatives sample of bank, government or private institution and compare
should have been studied. In order to get an under knowledge of the management
procedure and techniques employed in the industries. The study has however been
confirmed to the small industries in Oyo state and its environment.
While a descriptive and
theoretical approach been adopted in the analysis of office organization and
management procedures a more practical field work approach have been adopted.
It is the intention of the writer to focus on internal control system in the
small scale industries.
An in-depth was not
possible for the following reasons.
1.
The shortness of time available for the project.
2.
Lacking detailed information from the industries
RESEARCH HYPOTHESIS
Hypothesis simply means a
conjunction or tentative statement or an assertion or an ideal which is thought
suitable to explain the fact about something or preposition of what can be seen
in the world of reality and this production is made from the world of theory
and natural phenomerials.
The essence of hypothesis
in this study is to conduct test into the validity of the following found where
internal control system is faulty and proper internal checks is lacking.
Hi: that fraud is
basically due to complex nature of accounting system.
Hi: have been taken as
the probability that the will hypothesis Ho is true or valid.
Ho: this is to test
whether detection and prevention of fraud will not help the industry to safe it
resources from pilferage as a result of weak internal control system.