The Impact of Internal Audit Functions on Fraud Prevention in Nigerian Banks: A Study of Access Bank Plc
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Background of the Study
Fraud prevention is a critical concern in the Nigerian banking sector, which has experienced significant financial losses due to fraudulent activities. Internal audit functions play a pivotal role in identifying and mitigating fraud risks by implementing robust control mechanisms and ensuring compliance with regulatory standards (CBN, 2024). Access Bank Plc, a leading financial institution in Nigeria, has consistently emphasized the importance of its internal audit functions in safeguarding assets and maintaining stakeholder trust.
The increasing sophistication of fraud schemes necessitates a proactive approach to fraud detection and prevention. Internal auditors are expected to employ advanced analytical tools, forensic auditing techniques, and real-time monitoring systems to combat fraud effectively (PwC, 2025). However, despite these expectations, reports of fraudulent activities continue to emerge in Nigerian banks, highlighting gaps in internal audit practices.
This study seeks to examine the impact of internal audit functions on fraud prevention in Access Bank Plc, focusing on their effectiveness, challenges, and contributions to organizational integrity.
Statement of the Problem
Fraudulent activities remain a persistent challenge in the Nigerian banking sector, undermining public confidence and eroding financial stability. Although internal audit functions are designed to detect and prevent fraud, their effectiveness is often constrained by inadequate resources, lack of independence, and limited adoption of technological tools (Oluwaseun et al., 2023). Access Bank Plc, despite its robust reputation, is not immune to these challenges.
Recent studies (Adewale & Abiola, 2024) suggest that the internal audit functions in Nigerian banks may lack the capacity to address emerging fraud risks effectively. This raises concerns about their role in fraud prevention and the need for targeted interventions to enhance their effectiveness.
Objectives of the Study
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To examine the role of internal audit functions in fraud prevention at Access Bank Plc.
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To identify challenges affecting the efficiency of internal auditors in fraud detection.
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To propose strategies for strengthening fraud prevention mechanisms in Nigerian banks.
Research Questions
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How do internal audit functions contribute to fraud prevention in Access Bank Plc?
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What challenges affect the effectiveness of internal auditors in fraud prevention?
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What strategies can improve fraud prevention mechanisms in Nigerian banks?
Research Hypotheses
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Internal audit functions significantly reduce fraud risks in Nigerian banks.
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Challenges in internal audit practices negatively affect fraud prevention in Access Bank Plc.
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Enhanced internal audit mechanisms will improve fraud prevention outcomes in Nigerian banks.
Scope and Limitations of the Study
The study focuses on the internal audit functions of Access Bank Plc, particularly their role in fraud prevention. It will analyze the effectiveness of existing practices, challenges faced, and potential solutions. Limitations include restricted access to sensitive data and potential bias in self-reported information.
Definitions of Terms
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Fraud Prevention: Measures and processes aimed at identifying and mitigating fraudulent activities.
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Internal Audit Function: The organizational unit responsible for evaluating and improving risk management and control processes.
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Forensic Auditing: Specialized auditing focused on investigating and preventing financial fraud.
