Internal Control System and Fraudulent Practices in the Nigerian Public Sector; A Survey of Nigerian National Petroleum Corporation (NNPC) Nigeria.

ABSTRACT 

The researcher investigated the relationship between ‘internal control system and fraudulent practices in the Nigerian public sector, a survey of Nigerian National petroleum Corporation (NNPC)’. The purpose of the study was to determine the Effect of Internal Control system on fraudulent in the Nigerian National Petroleum Corporation, Nigeria. The specific objectives were to determine the relationship between internal control system components (Control Environment, Risk Assessment, Control Activities, information and communication, and monitoring) and fraudulent practices in the Nigerian public sector. The study adopted a cross sectional research and descriptive research design in which data was collected and analyze using quantitative method. The sample size of 300 was selected from the target population of 1205 using Slovene ‘s formula. Results from the Pearson linear correlation and regression analysis shows that there are statistical significant relationship between the internal control system variables and fraudulent practices in the Nigerian public sector and internal control system have a negative Effect on fraudulent practices. Thus Control Environment was regressed on Fraudulent Practices and the result of linear regression showed that R2=0.961. and significant at P < 0.000; Control Activities was regressed on Fraudulent Practice and the result of linear regression showed that R20.936 and significant at P < 0.000; monitoring was regressed with Fraudulent Practices. The result of linear regression showed R20.936 and significant at P

TABLE OF CONTENTS

DECLARATION z

APPROVAL ii

ACKNOWLEDGEMENT III

TABLE OF CONTENTS iv

LIST OF ABBREVIATIONS AND ACRONYMS VIII

ABSTRACT ix

CHAPTER ONE 1

INTRODLJCTION 1

1.0 INTRODUCTION 1

1.1 BACKGRoUND 1

1.1.1 HISTORICAL PERSPECTIVE 1

1.1.2 THEoRETICAL PERSPECTIVES 3

1.1.3 CoNcEPTuAL PERSPECTIVES 3

1.1.4 CoNTExTuAL PERSPECTIVE 4

1.2 PRoBLEM OF THE STATEMENT 5

1.3 PuRPosE OF THE STUDY 6

1.4 SPECIFIC OBJECTIVES 6

1.5 RESEARCH QUESTIONS 7

1.6 HYPOTHESES 7

1.7 SCOPE 8

1.7.1 GEoGRAPHICAL SCOPE 8

1.7.2 THEORETICAL SCOPE 8

1.7.3 CONTENT SCOPE 8

1.8 SIGNIFICANCE OF THE STUDY 8

1.9 OPERATIONAL DEFINITION OF KEY TERMS 9

CHAPTER TWO .10

LITERATURE REVIEW 10

2.0 INTRODUCTION 10

2.1 THEoRETIcAL REVIEW 10

2.1.1 SocIAL CONTRACT THEORIES 10

2.1.2 JOHN RAWLS THEORY OF JUSTICE 13

2.1.3 THE WHITE COLLAR CRIME THEORY (SUTHERLAND 1939) 13

2.2 CONCEPTUAL FRAMEWORK 16

2.3 EMPIRICAL REVIEW 32

2.4 IDENTIFYING THE GAP 35

CHAPTER THREE 36

METHODOLOGY ... 36

3.0 INTRODUCTION 36

3.1 RESEARCH DESIGN 36

3.2 RESEARCH POPULATION 36

3.3 SAMPLE SIZE 36

3.4 SAMPLING PROCEDURE 37

3.5 SOURCES OF DATA 37

3.6 RESEARCH INSTRUMENT 38

3.7 RELIABILITY AND VALIDITY OF THE INSTRUMENT 38

3.7.1 RELIABILITY 38

3.7.2 VALIDITY 40

3.8 DATA COLLECTION PROCEDURE 40

3.9 DATA ANALYSIS 41

3.10 ETHICAL CONSIDERATIONS 42

CHAPTER FOUR

PRESENTATION, ANALYSIS AND INTERPRETATION OF RESULTS 43

4.0 INTRODUCTION 43

4.1 DEMOGRAPHIC CHARACTERISTICS OF RESPONDENTS 43

4.3 DEsCRipTIvE CHARACTERISTICS OF INTERNAL CONTROL SYSTEM IN NIGERIAN NATIONAL PETROLEUM CORPORATION (NNPC) 45

4.4 DESCRIPTIVE CHARACTERISTICS FRAUDULENT PRACTICES 50

4.5 CORRELATION ANALYSIS OF INTERNAL CONTROL SYSTEM AND FRAUDULENT PRACTICES 51

4.6 TE5TING OF HYPOTHESES 52

4.7 MULTIPLE REGRESSION ANALYSIS OF INTERNAL CONTROL SYSTEM AND FRAUDULENT PRACTICES IN THE NIGERIAN NATIONAL PETROLEUM CORPORATION (NNPC) 57

CHAPTER FIVE 59

DISCUSSIONS, CONCLUSION AND RECOMMENDATION 59

5.0 INTRODUCTION 59

5.1 DISCUSSION 59

5.1.1 OBJECTIVE ONE THE RELATIONSHIP BETWEEN CONTROL ENVIRONMENT AND FRAUDULENT PRACTICES iN NIGERIAN NATIONAL PETROLEUM CORPORATION (NNPC). 59

5.1.2 OBJECTIVE TWO THE RELATIONSHIP BETWEEN RISK ASSESSMENT AND FRAUDULENT PRACTICES iN NIGERIAN NATIONAL PETROLEUM CORPORATION (NNPC) 60

5.1.3 OBJECTIVE THREE THE RELATIONSHIP BETWEEN CONTROL ACTIVITIES AND FRAUDULENT PRACTICES IN NIGERIAN NATIONAL PETROLEUM CORPoRATIoN (NNPC). 61

5.1.4 OBJECTIVE FOUR THE RELATIONSHIP BETWEEN INFoRMATIoN & COMMUNICATION AND FRAUDULENT PRACTICES IN NIGERIAN NATIONAL PETROLEUM CoRPoRATIoN

(NNPC) 62

5.1.5 OBJEcTIvE FIvE THE RELATIONSHIP BETWEEN MoNIToRING AND FRAUDULENT PRACTICES IN NIGERIAN NATIONAL PETROLEUM CORPORATION (NNPC) 62

5.2 CONCLUSIONS 63

5.3. RECOMMENDATIONS 64

5.4 CONTRIBUTION TO KNOWLEDGE 66

5.5 SUGGESTED AREA FOR FURTHER RESEARCH 68

REFERENCES 69

APPENDICES 75

APPENDIX I 75

TRANSMITTAL LETTER 75

APPENDIX I1 76

INTRODUCTION LETTER 76

APPENDIX III 77

INFORMED CONSENT 77

APPENDIX IV 78

RESEARCH INSTRUMENT 78

APPENDIX V 82

SPSS OUTPUT 82