Institutionalization of Internal Control System of Fraud and Detection of Fraud in Service Companies in Lagos State, Nigeria

Abstract

This paper investigated on the institutionalization of the internal control system in service companies in Lagos State. The objective is to understanding if organization wide processes put in place to guide against regulatory infractions are monitored; to determine the effect of the control environment in safeguarding organizational unit operation; effectiveness of control activities in mitigating against financial irregularities in the organization; to determine the effectiveness of information and communication to safeguard the organization against fraud, and evaluate if the risk assessment system implemented in the processes of the organization is not sufficient according to the regulatory requirement to checkmate and prevent financial irregularities. The primary data were questionnaire administered to two hundred and fifty (250) respondents selected service companies in Lagos State while secondary data were from the internet, journals and textbooks. Self-designed questionnaires were used to collect data and were analyzed using simple percentage, and bar chart. Therefore, the findings recorded that the performance of any organization cannot do without internal control as true and fair presentation of financial statement may never be possible if the board and senior management are not committed to providing a well-planned internal control system. It was Recommended that management should ensure that there are adequate organizational controls and that each staff knows his duties and equally ensures effective segregation of duties to reduce interference in terms of funds, assets management and controls and the auditor's work is to make a critical review of the internal control in order to decide the extent of examination of the available evidence which is necessary.