Effect of Internal Control Systems on Fraud Management in Nigerian Public Sector

Abstract

This study examined the effect of the internal control systems on fraud management in Nigeria's public sector. Data relating to fraudulent practices, control environment, risk assessment, control activities, and top management compliance were obtained primarily from a random sample of 222 Heads of Units in the Account and Audit Departments in the Accountant General Office of the federation. These participants were directly involved in the management, financial planning, and controls. Survey design was adopted, the population of the study was one thousand two hundred and five (1205) with the sample size was two hundred and twenty-two respondents. The 184 fully completed and returned questionnaires which were coded and analyzed using descriptive regression techniques with the aid of SPSS 23 software. The results of the study revealed that control environment, risk assessment and control activities had a significant effect on fraud management in Nigeria public sector, and top management compliance has no significant effect on fraud management in Nigeria public sector. Therefore, the study concluded that the internal control system put in place in the public sector is well established and adequate for effective and efficient fraud management with adequate use of all channels of communication and information flow for proper fraud management. The study recommends among others that the internal control unit should be encouraged to maintain its independent role, such that the internal auditor should be adequately independent of those responsible for the financial operation, as well as be able to provide additional assurance on cost efficiency and effectiveness of the internal control system.