ABSTRACT
This
research work concentrates upon Effective Internal Control System as a Means of
Fraud Prevention and Detection in Hospital Management. It will also review the usefulness of
internal control in the prevention and detection of fraud and irregularities in
business organizations like Hospital.
Chapter one deals with the background of the study, statement of the study,
objective of the study, research questions, significance of the study, scope of
the study, as well as the limitation of the study. Chapter two entails the literature review on
the internal control system, audit supervision and control, internal control
that should be put in place in internal audit, weakness of internal control
system, qualification of an internal auditor, types and essentials of internal
control and limitation of internal control.
Chapter three is the research methodology which contains the source of
data collection, population of the study, sample of the study, design of the
study, validation of instrument, reliability of instrument, instrument for data
collection and method of data analysis.
The chapter four deals with the presentation and analysis of data, while
chapter five contains summary of findings, conclusion and recommendations.
TABLE OF CONTENTS
Abstract
Chapter One – Introduction
1.1 Background of the study 1
1.2 Statement of problem 2
1.3 Objective of the study 2
1.4 Research
Question 3
1.5 Significance of
the study 3
1.6 Scope of the
Study 4
1.7 Limitation of
the Study 4
1.8 Brief History of
Aluta Hospital 4
1.9 Definition of
Terms 5
Chapter Two – Literature Review
2.1 Introduction 7
2.2 Internal Control System 7
2.3 Audit Supervision and Control 9
2.4 Internal Controls that should be put in
Place in Internal Audit 10
2.5 Weakness of Internal Control System 11
2.6 Qualification of an Internal Auditor 11
2.7 Types and Essential of Internal Control 11
2.8 Limitation of Internal Control 13
2.9 Summary of Literature Reviewed 13
2.10 Nature of Fraud 14
2.11 Purpose of Fraud Investigation 14
2.12 Duties to Prevent and Control Fraud (The Role
of Auditor) 16
Chapter Three – Research methodology
3.1 Introduction 18
3.2 Research design 18
3.3 Population of the Study 18
3.4 Sample Size 19
3.5 Sources of Data Collection 19
3.6 Validity of the Instrument 19
3.7 Reliability of the Instrument 20
3.8 Method of Data Collection 20
3.9 Method of Data Analysis 20
Chapter Four – Data Analysis and Presentation
4.1 Introduction 21
4.2 Questionnaire Administered 21
Chapter Five – Summary Conclusion and
Recommendations
5.1 Introduction 33
5.2 Summary of the Study 33
5.3 Conclusion 33
5.4 Recommendation 34
5.5 Suggestions for Further Studies 34
Bibliography 36
Appendix 37
Questionnaire 38
CHAPTER
ONE
INTRODUCTION
1.1
Background of the Study
No economic entity can
progress when there is fraud in the operations of its management. Fraudulent
activities in business organizations are traceable to lapses in the internal
control system operating in their respective department. Internal control is an
essential function of management that deals with measurement and correction of
the performance of the subordinate with a view to achieving organizational
goals with maximum efficiency and at minimum cost. Internal audit is an
independent, objective assurance and consulting activity designed to add value
and improve an organizations operations.
Millichamp (2000) said that the use of
criminal deception to obtain an unjust or illegal advantage is known as fraud.
There could be fraudulent manipulation of figures in accounting information and
forgoing of cheque and other document and using ones approval more than once, which
is not done by the auditor but by the employees of the organization. Effective internal
control system can be said to exist hand in hand with fraud as the controlling
tool in a business in regards to fraudulent act. A weak internal control system
could be a fertile channel for fraud perpetration in any organization. The
importance of solid internal control system in manage of an organization cannot
therefore be over emphasized.
1.2
Statement of the Problem
A good quality internal
control services will make positive contribution to the hospital management.
Some of the problems that actually hinder internal control are problems of
incompetent persons that are engaged by the organization, poor management and
uncooperative attitude of non-audit staff due to ignorance of internal control
objectives. That is lack of skill in the discharge of duties
1.3
Objectives of the Study
Many public organizations of
different sizes have seen the need of internal control as the means for fraud
prevention and detection in hospital management for ensuring effective working
and internal control system.
Some of the objectives of the study includes;
·
To
check the internal audit work of the department of hospital management.
·
To
renew the function of internal control generally in the hospital management
·
To
detect and prevent fraud and irregularities in Aluta Hospital, Oleh
·
To
determine the degree of reliance placed on internal control report and
corrective measures taken in the past.
1.4
Research Questions
1.
What
is the control measure your hospital put in place to prevent fraudulent
practices?
2.
How
does your hospital guide against fraudulent practices?
3.
To
what extent does management actually rely on internal control in hospital
management?
4.
What
factor limits internal control function in fraud detection and prevention in
hospital management.
5.
What
do you understand as internal control?
1.5
Significance of the Study
This research work will be of
great significance to benefit a lot of persons which have been having problems
with internal control system and its accounting meaning in general. It will
enable management of hospitals and other business organizations to detect and
prevent fraud among the employees.
The study will also serve as a guide line
to students and researchers who may which to carry out research work in this
area in the future.
1.6
Scope of the Study
This research study is
mainly on the effective internal control system as a means of fraud prevention
and detection in hospital management with special reference to Aluta Hospital,
Oleh in Isoko South Local Government area delta state.
This research will be on
descriptive research therefore, hypothesis testing will not be required.
1.7
Limitation of the Study
In the cause of this
study, the researcher was faced with a number of problems. Among the short
comings includes, financial constraint, which prevented the researcher from
carrying out his study in details.
Unwillingness to release information
required for the research which were considered confidential to the
organization by the officers concerned. Time factor had also been one of the
greatest constraint.
1.8
Brief History of Aluta Hospital
Aluta Hospital was established
in the year 1993. The owner was Doctor Aluta, the Hospital was later approved
and commissioned by the Delta State Government on July 1996.
This hospital was owned and
directed by Doctor Aluta. It is a
private hospital which is located at Oleh/Emede expressway in Isoko South Local
Government Area, Delta State.
1.9
Definition of Terms
·
Fraud: it is a deliberate act and may require specific procedures in
order to detect. It involves the use of deception to obtain an unjust or
illegal financial advantage
·
Internal Control: this is a whole system of control, financial or otherwise
established by management in other to carry on the business of the enterprise
in an orderly and efficient manner ensure adherence to management policies,
safeguard the asset and secure as far as possible the completeness and accuracy
of the records.
·
Internal audit: this is an independent, objective assurance and consulting
activity designed to add value and improve an organizations operations.
·
Auditing: it is independent examination of books of account and
record of the company with a view to expressing an opinion on the true and
fairness of financial statement by an auditor.
·
Control: this is the monitoring of activities to ensure their
conformity to laid down plans and procedure.