Abstract:
This research was conducted to bridge the gap in the scarcity of academic studies on internal audit proactive function in fraud risk controls. The study applied four internal audit proactive explanatory variables: (Integrated Risk Management Database IRMD; Systematic Error Signal SES; Modern Fraud Detection Networks MFDN; and Continuous Financial Transaction Review CFTR). The Methodology applied primary data on 15 banks with a staff population of 668 that was reduced to 400 sample size that formed the respondents, after applying Taro Yamane's formulae. The valid responses from the returned instrument used were 213 respondents. The study employed Likert Scale rating, Descriptive statistics and ANOVA analyses. The overall P value is 0.733 and this is significant at 5% level that made us to reject the null hypotheses. The adjusted F-Statistic shows that 0.84 (84%) of the four independent variables (IRMD, SES, MFDN and CFTR) combined, actively controls fraud risk in banks. Our study concludes that the four independent variables of internal audit proactive function control fraud risk in the sampled banks in Nigeria. We recommend that firms should apply the four variables in fraud risk control. The implications for entities are to translate the findings into business practice with care, because these are only academic research findings.
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