An examination of internal audit enforcement on mitigating fraud risks in banking: a case study of Guaranty Trust Bank
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Background of the Study
Internal audit functions serve as a critical line of defense against fraud in the banking sector. Guaranty Trust Bank (GTBank) has strengthened its internal audit enforcement mechanisms by incorporating advanced analytics, automated monitoring tools, and rigorous audit protocols. These systems are designed to detect anomalies, assess risk exposures, and ensure that internal controls are strictly adhered to (Oluwaseun, 2023). By enforcing comprehensive internal audits, GTBank aims to mitigate fraud risks, reduce financial losses, and maintain regulatory compliance. The integration of continuous monitoring systems with periodic audits provides a layered approach to fraud prevention, ensuring that any deviations from established policies are quickly identified and addressed (Adebayo, 2024).
This proactive approach not only minimizes the incidence of fraud but also enhances overall operational efficiency and accountability. Furthermore, regular training programs for audit staff and employees ensure that the latest fraud prevention techniques are effectively implemented. However, challenges such as integration with legacy systems, resource constraints, and inconsistencies in audit practices across branches remain. This study examines the role of internal audit enforcement in mitigating fraud risks at GTBank, evaluating both the benefits achieved and the challenges encountered in maintaining a robust anti-fraud framework.
Statement of the Problem
Despite robust internal audit enforcement measures at GTBank, fraudulent activities continue to pose a risk due to several persistent challenges. Integration issues between new audit technologies and legacy systems can result in data gaps and delays in detecting fraudulent activities (Chukwu, 2023). Moreover, inconsistent enforcement of audit protocols across different branches undermines the overall effectiveness of the anti-fraud framework. Limited resources and variations in staff expertise further contribute to these challenges, reducing the bank’s ability to respond promptly to emerging fraud risks. These issues compromise the integrity of internal controls and increase the bank’s vulnerability to fraud, necessitating a closer examination of the internal audit enforcement process and the development of strategies to enhance its effectiveness.
Objectives of the Study
- To assess the impact of internal audit enforcement on mitigating fraud risks at GTBank.
- To identify integration and resource challenges affecting audit effectiveness.
- To propose strategies for improving the uniformity of internal audit practices.
Research Questions
- How does internal audit enforcement affect fraud risk mitigation at GTBank?
- What challenges hinder the effective integration of audit systems with legacy platforms?
- Which strategies can improve the consistency and efficiency of internal audits?
Research Hypotheses
- H₁: Strong internal audit enforcement significantly reduces fraud risks.
- H₂: Integration challenges with legacy systems negatively impact audit effectiveness.
- H₃: Enhanced resource allocation and staff training improve internal audit outcomes.
Scope and Limitations of the Study
This study focuses on GTBank’s internal audit practices over the past three years, using audit reports, fraud incident data, and interviews with audit professionals. Limitations include restricted data access and variability in branch-level practices.
Definitions of Terms
- Internal Audit Enforcement: The application and monitoring of audit procedures to ensure compliance with internal policies.
- Fraud Risks: The potential for fraudulent activities that can lead to financial losses.
- Audit Protocols: Standardized procedures used to evaluate and monitor internal controls.
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