CHAPTER ONE

INTRODUCTION

2efficiency of operations, reliability of financial reporting, compliance with applicable laws and regulations. (COSO, ICIF, 1994).Fraud, on the other hand, can be defined as an act of deliberate deception with the aim of securing a personal benefit by taking advantages of other. Also, it could simply be put as the misappropriation, theft or embezzlement of corporate assets in a particular economic environment in the simplest thinking” it is also known as “stealing by tricks” (Achibong, 2013). It is the trusted and valued employee who generally commits business fraud. When frauds are discovered,there is often shock and disbelief that they could have committed such an act. The perpetrator of business fraud could be “the person next door.” This person is likely to be a married male with a family, religious affiliation, and above average education (Russell and Norvig, 2013).In most cases, offenders do not view stealing from companies as harmful; they may think that the crime was victimless; and they do not view their theft as being devastating or costly to the business. Many frauds occur because the opportunity exists and the perpetrator does not believe he/she will be caught. In many cases the offender has “little or no criminal self-concept and offenders view violations as part of their work” Further; they usually minimize their crime since it results in minor losses for a large volume of clients; no one client is usually targeted for the crime.It has been an ongoing issue for thousands of years and continues to be a problem today. There are several definitions for fraud as a legal (or criminal) concept. According to the Encyclopedia Britannica, (2012), it is “the deliberate misrepresentation of fact for the purpose of depriving someone of a valuable possession. Although fraud is sometimes a crime in itself, more often it is an element of crimes such as obtaining money by false pretense or by impersonation” To 3understand the components of fraud, a systematic approach is in order. As a system, fraud involves victims and perpetrators, and as a structure, it involves a fraud scheme. It can be evaluatedas an open system, and the challenge is to evaluate the weaknesses of this system in order to impact it (detect, prevent, or deter).It can be seen as the intention, deception, misrepresentation, omission or concealment of the truth for the purpose of obtaining unlawfully the assets of the bank, which is the major reason for setting up on internal control system, has become a great pain in the neck of many Nigerian bank managers. It has also become an unfortunate staple in Nigeria’s international reputation. It is really eating deep into the Nigerian banking system and that any bank with a weak internal control system is dangerously exposed to bank fraud (Adeduro, 2014).The cost of fraud to a business is difficult to estimate because not all fraud and abuse is discovered, not all uncovered fraud is reported, and civil or criminal action is not always pursued. Therefore, the main thrust of this study is to examine whether the internal control system in banking sector in Nigeria is effective in fraud detection or not, and also to appraise effectiveness of employee training within the context of internal control system as fraud detector.The menace of financial fraud as certainly emerged as one of the hindrances to bank performance in Nigeria. Although fraud isa worldwide phenomenon, it is the single most important financial problem in Nigeria. The nation has suffered severe losses financially.

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