FRAUD DETECTION AND CONTROL IN THE PAYROLL DEPARTMENT OF TAI LOCAL GOVERNMENT
CHAPTER 1
INTRODUCTION
Fraud is defined as an act of deception meant to benefit oneself at the expense of others. Fraud as a felony encompasses all of the various methods that human ingenuity might devise for one person to gain an advantage over another through false representation. This means that fraud can occur in the context of personal interactions in religious organisations, social clubs, and other settings. Seetharaman, Sentivelmurugan, and Periyananyagam (2024). Fraud produces enormous losses in the business world and creates morale issues in the workplace. When we are defrauded of our money, the effects can be severe. Fraud losses are major issues for organisations that must be managed, controlled, and monitored (Association of Certified Fraud Examiners [ACFE], 2022).
1.1 Background of the Study
The Association of Certified Fraud Examiners (ACFE) defines three major types of fraud that harm organisations. The first is asset misappropriation, which involves the theft or misuse of an organisation's asset. Examples include inventory or cash theft, fake invoicing, accounts receivable fraud, and payroll fraud. The second type of fraud is fake financial statements, which are the most expensive, with a median loss of $593,000 (ACFE, 2022). Corruption is the final and most common of the three fraud categories, accounting for 50% of all fraud instances (ACFE, 2022). Bribery or acceptance of "kickbacks" are examples of corruption, as are improper use of secret information, conflicts of interest, and collusive tendering. Fraud has been identified as Nigeria's most serious single problem, both in the public and commercial sectors. It has not only shattered public trust in government, but it has also cost the government and the people of Nigeria billions of dollars owing to corrupt management of public firms, unfinished public projects, and deteriorating infrastructure caused by a plundered maintenance budget. Against this backdrop, the researcher seeks to examine the issue of fraud and solutions for managing it. As a result, the research aims to look at fraud detection and control in TAI LGA's payroll department.
1.2 Statement of the Problem
Fraud has been identified as Nigeria's most serious single problem, both in the public and commercial sectors. It has not only shattered public trust in government, but it has also cost the government and the people of Nigeria billions of dollars as a result of corrupt management of public firms, unrealised public projects, and deteriorating infrastructure caused by a looted maintenance budget. Against this backdrop, Seetharaman et al. (2024) note that "billions of naira are lost in the public sector every year through fraudulent means", which he claims only includes the amount discovered and made public. Indeed, far larger sums are lost in undetected frauds or those that are kept quiet for other reasons. Fraud is defined as any purposeful false conduct intended to deceive or injure any party, individual, or corporate body in any way. As a result, the difficulty confronting this research is to look into fraud detection and control in TAI LGA's payroll department.
1.3 Objective of the Study
To determine the nature of fraud To determine the methods of fraud detection and control To determine the nature of fraud detection and control in the payroll department in Tai LGA
1.4 Research Questions
1. What is the nature of fraud
2. What is the methods of fraud detection and control
3. What is the nature of fraud detection and control in the payroll department in TAI LGA
1.4 Significance of the Study
The study shall appraise the nature of fraud detection and control, which will serve as a framework for the eradication of fraud in public and private sector organization.
The study shall also provide essential information on issues of fraud detection and control.
1.5 Statement of Hypothesis
1 Ho Fraud in the payroll department in TAI LGA is Low
Hi Fraud in the payroll department in TAI LGA is high
2 Ho Fraud detection in the payroll department in TAI LGA is low
Hi Fraud detection in the payroll department in TAI LGA is high
3 Ho Fraud control in the payroll department in TAI LGA is low
Hi Fraud control in the payroll department in TAI LGA is high
1.7 Scope of the Study
The study focuses on the appraisal of fraud detection and control in the payroll department of TAI LGA
1.8 Definition of Terms
Corporate image: This refers to the goodwill and public image created by an entity. It could be as a result of making good quality products, offering efficient services, and maintaining a satisfied workforce.
Internal control: the plan of an organization and all the coordinated methods and means adopted within a business to safeguard its assets, check the accuracy of data, promote operational efficiency, and encourage adherence to prescribed managerial policies.
Liquidation: The winding up of a business is usually a result of insufficient funds.
Forgery: Forgery is the act of falsely making or receiving any writing for the purpose of doing to another person. Any alteration of writing made with the intent to defraud is a forgery. For instance, the forgery of a staff signature.
Dummy names: This type of fraud is a way of including non-existent names in the wage sheets.
Falsification of account: These types of fraud are usually committed by the pay rollers who are either acting ignorantly, innocently, or with proven criminal intent. final-year project topics
Forged cheque: A Forged cheque with a forged signature remains one of the commonest sources of fraud; in this case, chequebooks are stolen, the customer's signature is perfectly forged, and many successfully withdraw from the bank.
References
Association of Certified Fraud Examiners. (2022). Report to the nations: 2022 global study on occupational fraud and abuse. https://www.acfe.com/reports
Association of Certified Fraud Examiners. (2024). Report to the nations: 2024 global study on occupational fraud. https://www.acfe.com/reports2024
Seetharaman, P., Sentivelmurugan, A., & Periyananyagam, R. (2024). Occupational fraud: Expanding the fraud triangle. Journal of Financial Crime, 31(2), 469–482. https://doi.org/10.1108/JFC‑06‑2023‑0095
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