Effect of Internal Control System on Fraud Control of Deposit Money Banks in Plateau State

The consistency of fraud and misappropriation of funds in the banking sector is creating fear, anxiety, and also resulted in customer and shareholders loss of confidence. The study examines the effect of internal control system on fraud control in deposit money banks in Plateau State. The study employed a field survey that is cross-sectional. The total population for the study was 285 staff representing 19 drawn each from 15 deposit money banks in Jos metropolis and a sample size of 166 using Taro Yamane sample size determination as well as purposive sampling technique which was adopted. The study employed the use of structured questionnaire as method of data collection and the hypotheses were tested using multiple linear regression as method of data analysis. Findings shows that Control Environment has significant effect on fraud control in DMBs in Plateau State (β = 0.354, t = 4.160, sig.=0.003). Also, control activities have significant effect on fraud control in Deposit Money Banks in Plateau state (β = 0.488, t = 3.375, sig.=0.012) and Control Monitoring has significant effect on fraud control in deposit money banks in Plateau State (β = 0.625, t = 2.405, sig.=0.004). The study recommended that management of banks should always ensure that strong and appropriate control activities are always in place to prevent financial leakages and promote accountability in the banking industry. There should also be appropriate segregation of duties to reduce a person’s opportunity to commit fraud and conceal fraud or errors and an appropriate level of management should approve and authorize all transactions over a specified limit, and authorization should require dual signature. The implication of the study is that an improvement in internal control system will result to an improvement in fraud control.