Assessing fraud control practices in Centenary Bank.

Abstract

World over, fraudulent activities are on the increase in both public and private organizations, irrespective of size and type, of which the banking sector is no exception. This study attempted to assess fraud control practices in Centenary Bank. The objectives of the study were; to examine the existing fraud control practices in Centenary Bank, to identify the lapses related to fraud control practices in Centenary Bank; to determine the strategies that can be utilized to improve the adoption of fraud control practices in Centenary bank.

The fraud control practices that were relevant to this study include; whistle blowing; Internal control practices; code of conduct and ethical considerations; firewall and password protection; fraud risk assessment. A cross sectional survey design was adopted and quantitative data was collected with the with aid of the structured self-administered questionnaires from a sample of 338 employees of the various departments in Centenary Bank using stratified simple random sampling. Of these, 270 questionnaires were usable, giving an 80% response rate. Thereafter, data collected was captured and analyzed for descriptive statistics using SPSS.

The findings of the study revealed that existing the existing fraud control practices in Centenary bank include; internal control practices, code of conduct and ethical considerations, fraud risk assessment, forensic accounting and firewall and password protection. However, the study also revealed lapses especially in regard to whistle blowing. For instance; employees feared that if they report the wrong doing, the employer will retaliate. Also, employees feared that if they reported the wrong doing, they would be prepared to resign or be dismissed by the employer. In addition, the perception was that a loyal employee would not report the wrong doing in any circumstances. Furthermore, there was a perception among the employees that reporting wrong doing would lead to unfavorable consequences to the employer such as bad publicity to the organization.

The study recommends that Centenary bank puts in place strategies such as; putting in place a conducive environment for whistleblowing so that employees are comfortable reporting wrongdoing without fear of retaliation such as resignation or dismissal from the organization.