The Effect of Internal Control System in Banking Industry (Guarantee Trust Bank)

TABLE OF CONTENTS

Title page                                                                                                         i

Certification                                                                                          ii

Dedication                                                                                            iii

Acknowledgements                                                                               iv

Table of contents                                                                                  v

CHAPTER ONE: INTRODUCTION                                                  1

1.1             Background of the Study                                                           1

1.2             Statement of the Study

1.3             Research Questions                                                                   4

1.4             Purpose of the Study                                                                 5

1.5             Scope and Limitation                                                    7

1.6             The Significant of the Study                                          8

1.7             Organization and Plan of the Study                                9

1.8             Definition of Terms                                                                   11

CHAPTER TWO: LITERATURE REVIEW                          15

2.1             Literature review                                                                       15

2.2             Review of Related Control                                                        16

2.3             Objective of internal Control system in

Banking Industry                                                                      18

2.4             Causes and Prevention of Banking Industry Failure.                                                                                           

2.5             The Principle of Effective and Reliability of Internal control in banking Industry.                                               23

CHAPTER THREE: RESEARCH METHODOLOGY           25

3.1             Introduction                                                                             26

3.2             Historical background of Guarantee Trust Bank  27

3.3             Modification of the Research Question and Hypothesis                                                                           29

3.4             Research Design                                                                       30

3.5             Population Study                                                                      31

3.6             Sampling design and procedures                                    32

3.7             Pilot study validity and reliability                                   32

3.8             Procedure for processing and analyzing

collection data                                                                          33

3.9             Administration of the data collection schedule  34

3.10          Limitation of Methodology                                            35

CHAPTER FOUR: PRESENTATION AND ANALYSIS OF DATA

4.1             Respondents, characteristics and classification    36

4.2.1        Occupational table Data                                                37

4.2.2        Sample sex Table data                                                   38

4.2.3        Sample Age Table data                                                  39

4.2.4        Sample Department data                                                           40

4.2.5        Sample level of education table data                   43

4.2.6        Comparism of statement reflecting whether internal controls are in place and how can the be improved. 46

4.2.7        Comparism of statement reflecting whether effective and reliable internal control can help to prevent business failure                                                              48

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1             Summary,                                                                                 50

5.2             Conclusion                                                                               52

5.3             Recommendations                                                                     53

Bibliography                                                                             55

CHAPTER ONE

1.0             INTRODUCTION

1.1                BACKGROUNDS OF THE STUDY

The term audit is derived from the Latin word “Audire which means to hear in the holding days. The origin of an audit dates back to the ancient times when the land owners allows tenants farmers to work on the land whilst the land owners themselves did not become involved to the business of farming. The Landlords relied upon an overseer who listened to the report of stewardship given by the tenants. The account of the parties responsible for non financial transaction is used to be called and hear the explanation needed by the person who held the account know as an auditor. Originally, the function of an auditor is to ascertain the fact, whether the accounting party has properly received the receipts and payment of cash on behalf of his principal and whether the financial statement prepared before him show true and fair view but the scope of audits today has been wide, because the modern auditing is a complex operation calling on a wide variety of skills varying from auditing and financial accounting knowledge to statistics, computing and communication skills. This therefore become the most important part of the auditors duties owning the enlargement of size and complexity of business enterprises. Today, the concept and scope of auditing has changed a comprehensive definition of auditing given has Roberts Eschlessors as quoted by Jagdish Drakash in his book. Adding, principle practice and problem (1990) says auditing is an examination of financial statements, records and related operation to determine adherence is generally accepted accounting principle, management policies restated requirement. In this definition, emphasis laid on auditing being related to operations and how far the adhere to management policies or stated requirements, in other words we find out that we needs to introduce the effectiveness and breakable control of the system. What then is this internal control system? Internal control system is the while system of control, financial or otherwise established by the management in order to carry on the business of the enterprise in an orderly and efficient manner ensuring adherence to management policies, safe guarding the assets and securing as far as possible the completeness and accuracy of records.