THE EFFECT OF POST COVID-19 ON THE INTERNAL CONTROL SYSTEM IN BANKING INDUSTRY (GUARANTEE TRUST BANK)

THE EFFECT OF POST COVID-19 ON THE INTERNAL CONTROL SYSTEM IN BANKING INDUSTRY (GUARANTEE TRUST BANK)

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BACKGROUND OF THE STUDY

The word "audit" originates from the Latin word "audire," which literally translates to "to hear in the holding days." The practice of conducting an audit can be traced all the way back to ancient times, when landowners would work their land out to tenant farmers so that they wouldn't have to get involved in the day-to-day operations of farming. At that time, audits were used to ensure that the rent paid by tenants was being used appropriately. The Landlords depended on an overseer who listened to the tenants' stewardship report and provided feedback to the Landlords.

It was common practice for the person who held the account, sometimes known as an auditor, to contact the parties whose accounts were responsible for a non-financial transaction in order to inquire about and get any necessary explanations.

Originally, the role of an auditor was to ascertain whether or not the accounting party had correctly received the receipts and payments of cash on behalf of his principal, as well as whether or not the financial statement that was prepared and presented to him showed a true and fair view of the situation. The modern audit is a complex operation that requires a wide variety of skills ranging from knowledge of auditing and financial accounting to statistics, computing, and communication skills. However, the scope of audits today has been broad due to the fact that modern auditing is a complex operation.

As a result of the increase in the size and complexity of commercial operations, this has become the most significant aspect of the auditor's responsibilities.

A complete description of auditing offered by Roberts Eschlessors is included in a book written by Jagdish Drakash, who is mentioned in the book. In today's world, both the idea and the scope of auditing have evolved. Auditing, according to Adding, Principle Practice and Problem (1990), is the inspection of financial statements, records, and associated operations to evaluate whether or not they correspond to generally accepted accounting principle, management policies, and legal requirements.

In this definition, the emphasis is placed on auditing being related to operations and how closely they adhere to management policies or stated requirements. To put it another way, we discover that we need to introduce the system's ability to effectively control breakables as well as effective controls.

Therefore, what exactly is this internal control system? Internal control system is the entire system of control, whether 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 of the assets, and securing as far as possible the completeness and accuracy of records.

Millicham (1990), in his institution manual for accounting, also stated that the auditor operational standard required that of an audit to be reliable on any internals control, he should ascertain and evaluate those control and perform compliance test on their control. We can therefore see that to have a sound, reliable, and effective control system in an organization, we minimize the possibility of an enterprise failing. Millicham's manual can be found here.

1.2   THE STATEMENT OF THE STUDY

In light of the information presented in the introduction, which states that an inefficient and unreliable controls system in an organization may lead to the collapse of a firm, it is important to note the following: (Janu 2013). This research work will therefore investigate ineffective and unreliable control systems in the banking industry. In the present day, this poses a problem because it brings so many associated problems, some of which could be determinate of working capital, high debt equity ratio decline, profit decline, high labor turnover, law capital utilization, low quality service, and finally focused, which could be either sales fraud, purchases, wages, or petty cash fraud.

1.3   OBJECTIVES OF THE STUDY

The main purpose of the study is to critically look at the effect of post covid-19 on the internal control system in banking industry (guarantee trust bank). Other purposes of this study are:

1. To Find out whether post Covid-19 had an effect on the internal control activities of guarantee trust bank.
2. To determine whether post Covid-19 had an effect on the ability of the internal control system unit to control the working environment of guarantee trust bank.
3. To examine if post Covid-19 had an effect on the effectiveness of information and communication regulation by the internal control unit of guarantee trust bank.
4. To find out if post Covid-19 had an effect on the operation monitoring by the internal control system of guarantee trust bank.

1.4 RESEARCH QUESTIONS

The following questions will be answered in this study:

1. Did post Covid-19 pandemic had an effect on the internal control activities of guarantee trust bank?
2. Did post Covid-19 pandemic had an effect on the ability of the internal control system unit to control the working environment of guarantee trust bank?
3. Did post Covid-19 pandemic had an effect on the effectiveness of information and communication regulation by the internal control unit of guarantee trust bank?
4. Did post Covid-19 had an effect on the operations monitoring by the internal control system of guarantee trust bank?

1.5 RESEARCH HYPOTHESES

The following statements will be tested in the course of this study;

H01: Post Covid-19 pandemic did not have an effect on the internal control activities of guarantee trust bank.

H02:  Post Covid-19 pandemic did not have a negative impact on the internal control system of guarantee trust bank.

1.6 THE SIGNIFICANCE OF THE STUDY

The financial services sectors such as banking building society, consumer credit, purchase leading, factory business ventures e.t.c bank represent probably the most important sector, this is not just in term of turnover profit and employment of labour but also in its paramount impact on the other sphere of the economy. Any problem on the banking system would invariable have strong effect on the economy and that is why the research work tries in study the internal control on the banking sector with respect to guarantee trust bank and see how its effectiveness and reliability would be uses to prevent business failures.

This work will serve as a basis of broadening the research knowledge on internal control, it the research knowledge on internal control, the customer audits investors, their would be confidence control in place that can be relied upon for safeguarding their depositor.

Management on the other hand will be able to reduce losses and improve on internal control system finally, the academic world will use this work as a basis for further study for the student.

1.7 SCOPE OF THE STUDY

This study focuses on effect of post covid-19 internal control system in banking industry (guarantee trust bank). Specifically, this study is focused on finding out whether post Covid-19 had an effect on the internal control activities of guarantee trust bank, determining whether post Covid-19 had an effect on the ability of the internal control system unit to control the working environment of guarantee trust bank, examining if post Covid-19 had an effect on the effectiveness of information and communication regulation by the internal control unit of guarantee trust bank, and finding out if post Covid-19 had an effect on the operation monitoring by the internal control system of guarantee trust bank. The study will be carried out in some selected branches of Guarantee trust bank in Ikeja, Lagos State.

1.8 LIMITATIONS OF THE STUDY

In the course of carrying out this study, the researcher experienced some constraints, which included time constraints, financial constraints, language barriers, and the attitude of the respondents. However, the researcher were able to manage these just to ensure the success of this study.

Moreover, the case study method utilized in the study posed some challenges to the investigator including the possibility of biases and poor judgment of issues. However, the investigator relied on respect for the general principles of procedures, justice, fairness, objectivity in observation and recording, and weighing of evidence to overcome the challenges.

1.9 DEFINITION OF TERMS

COVID 19: of the genus Beta coronavirus), is transmitted chiefly by contact with infectious material (such as respiratory droplets) or with objects or surfaces contaminated by the causative virus, and is characterized especially by fever, cough, and shortness of breath and may progress to pneumonia and respiratory failure.

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