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EDEH NNEKA ANGELA

MANAGEMENT OF FRAUD AND WASTAGES IN BUSINESS ORGANIZATIONS: IMPLICATIONS FOR INTERNAL AUDITORS

BUSINESSS ADMINISTRATION

Chukwuma Ugwuoke

Digitally Signed by: Content manager’s Name

DN : CN = Webmaster’s name

O= University of Nigeria, Nsukka

OU = Innovation Centre

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TITLE PAGE

MANAGEMENT OF FRAUD AND WASTAGES IN BUSINESS ORGANIZATIONS: IMPLICATIONS FOR INTERNAL

AUDITORS

BY

EDEH NNEKA ANGELA

PG/MBA/09/54128

A PROJECT SUBMITTED TO THE DEPARTMENT OF ACCOUNTANCY, FACULTY OF BUSINESS

ADMINISTRATION, UNIVERSITY OF NIGERIA, ENUGU CAMPUS IN PARTIAL FULFILLMENT OF THE

REQUIREMENTS FOR THE AWARD OF MASTER OF BUSINESS ADMINISTRATION (MBA) IN ACCOUNTING

SUPERVISOR: DR. MRS. R. G. OKAFOR

APRIL, 2012.

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APPROVAL PAGE

This is to certify that this project was approved and undertaken by

Edeh Nneka Angela with registration number PG/MBA/09/54128 In

the department of Accountancy of University of Nigeria Enugu Campus.

……………………………………… ……………………….

Edeh Nneka Angela Date

PG/MBA/09/54128

……………………………………… ……………….

Dr. Mrs. R. G. Okafor Date

Supervisor

…………………………………….. ……………….

Mr. R. O. Ugwuoke Date

H. O. D. Accountancy Dept.

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CERTIFICATION

This is to certify that this project report is original and has not

been submitted in part or in full for any other diploma or degree of this

or any other university.

…………………………………. …………………………………..

Edeh Nneka Angela Date

PG/MBA/09/54128

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DEDICATION

This project is dedicated to Him ‘’that make things that be not as

though they were’’ – The Almighty God. Also, to my lovely Mother Mrs.

Theresa Edeh for her love, care, understanding, supports and sacrifices

– ‘’ Mother you are my heroine’’.

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ACKNOWLEDGEMENTS

With profound happiness I would like to show my gratification to all

and sundry who have contributed in no small measure to the success of

this project.

Paramount in this inexhaustible list is God Almighty. I give thanks and

praises for the lives He spared me to this day and the inspiration

required for the successful completion of this project.

My sincere gratification goes to my project supervisor Dr. Mrs. R. G.

Okafor. She has been wonderful. I appreciate the pains and the time

she took to go through my work and the necessary corrections she

offered.

I would like to say thank you to all my lecturers for knowledge

deposited in me which is the raw material required for this project. I

say thank you all.

My friend and well-wishers are not left out. Those who have

contributed directly and indirectly to the success of this project. I would

like to thank all my brothers and sisters for all they sacrifice to make my

programme a success, I say thank you.

Saving the best for the last, my beloved parents are gratified for giving

me the best legacy ever. MR. and MRS. EDEH, I say thank you for being

part of my history.

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ABSTRACT This study is on management of fraud and wastages in business organizations: implications for internal auditor. Many objectives were set among which are: to identify the nature, types and major causes of fraud and wastages in business organizations. To find out the factors that motivates workers to indulge in fraud and wastages in business organizations. To identify the effects of fraud and wastages in business organizations. To proffer solution on how to minimize fraud and wastage in business organizations using internal control measures and other accounting measures set aside for the detection of fraud and wastages. Hypotheses were also tested to determine if or not the hypotheses might be instrumental in fraud and wastages occurrences in business organizations. In arriving at the data used, both primary and secondary data were used. The primary data includes questionnaires distributed to sampled staffs and management of May and Baker Plc and Drugfield Specialty Product Plc. The secondary data includes materials form published textbooks, internet, articles and newspapers. These were tested using Chi square (x2) distribution. Data were analyzed and some of the findings include inadequate control measures took the most significant causes of fraud and wastages followed by deliberate intent and management ignorance. Finally, I recommended that proper internal control measure should be put in place, and other measures that will help to facilitate it like: inspection, review and observation. Trustworthiness, competence and integrity of employees and their understanding of prescribed policies and procedures.

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LIST OF TABLES

Table 4.1.1 Educational Qualification of respondents.

Table 4.1.2 Status of the Respondents.

Table 4.1.3 Effect of Fraud and wastages on the survival and profitability of business.

Table 4.1.4 The objective of profit making can be hindered through fraud and wastages

Table 4.1.5 Types of Fraud.

Table 4.1.6 Types of Wastages

Table 4.1.7 Causes of Fraud and Wastages

Table 4.1.8 Inadequate management control measures encourages fraud and wastages

Table 4.1.9 Societal factors cause Fraud and Wastages in business organizations.

Table 4.2.0Ways through which societal factors contribute to fraud and Wastages.

Table 4.2.1 Fraud and Wastages could lead to the collapse of business.

Table 4.2.2Means by which Fraud and Wastages could lead to the collapse of business

Table 4.2.3 The uses of proper accounting methods prevent fraud and wastages.

Table 4.2.4 Methods of preventing Fraud and Wastages in business organizations.

BAR CHART

Amount involved in fraud and wastages from 2003

(Source: from staffs and management of sampled organizations)

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TABLE OF CONTENTS

Title page i

Approval page ii

Certification iii

Dedication iv

Acknowledgement v

Abstract vi

List of tables’ vii

Table of content viii

Chapter One

Introduction

1.1 Background of the study 1

1.2 Statement of the problem 2

1.3 Objectives of study 3

1.4 Research questions 4

1.5 Hypotheses of the study 4

1.6 Scope of the study 4

1.7 Significant of the study 5

1.8 Definition of terms 5

References 7

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Chapter Two

Literature Review

2.1 Introduction 8

2.2 Types of fraud in business organization 10

2.3 Causes of fraud and wastages in business organization 11

2.3.1 Internal/management causes 12

2.3.2 Environmental/societal factors 14

2.4 Effects of fraud and wastages in business organization 16

2.5 Wastages in business organization 17

2.6 Basic Internal control methods 18

2.7 The role of internal control in managing fraud and wastages in

Business organization 23

2.8 Fraud and wastage protection and detection 30

References 33

Chapter Three

Research Methodology

3.1 Introduction 34

3.2 Research design 34

3.3 Sources of data 34

3.4 Research instrument 35

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3.5 Population and sample size determination 35

3.6 Data analysis technique 36

3.7 Validity of the research instrument 37

3.8 Reliability of the research instrument 37

3.9 Problems and limitations of study 38

References 39

Chapter Four

4.1 Data presentation and analysis 40

Chapter Five

Findings, Conclusion, and Recommendations

5.1 Findings 58

5.2 Conclusion 59

5.3 Recommendations 60

Bibliography 65

Appendix

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CHAPTER ONE

INTRODUCTION

1.1 Background of the Study:-

Business organizations exist to achieve goals set for them for growth. They exist

also to make profit through provision of various goods and services. This objective of

profit making can be hindered through fraud and wastages. These occur at all levels of

business organization. Fraud and wastages have threatened the survival and

profitability of many business organizations. It is important to realize that the business

owners/manager has the primary responsibility for the success and proper operations of

their business. The business owner/manager must recognize that they have

responsibility for the establishment and maintenance of their own efficient and effective

environment of operations that effectively pursue the goals and objectives of the

organization. Business owners/managers must clearly understand that the solid system

of internal control is a management tool, which is not an end in itself but a means to an

end. Once established the system of control cannot be forgotten. Periodic review and

assessment of the system must be performed by the business owner/manager to

determine if the system is working as designed, accomplishing the intended goals,

efficient given changes in business conditions, changes in business environment,

expansion and addition of new product/services or changes in personnel.

What are fraud, wastages and their effects on business organizations? Fraud definition

depends on the perspective it is seen. Legally fraud is seen in terms of dishonesty

deceit, misappropriation, theft, diversion of funds and conversion. Fraud in the civil

sense means:- That a representation is false, that the defendant has made a

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reputation in regards to a material fact. That it was made with the intent that it should be

acted on. Non-legally, fraud to a layman means stealing intentionally. It is the

withdrawal of fund from an account without the concept of the owner. It is also a criminal

deception done with the intention of gaining an advantage. Dictionary perspective,

according to Oxford English learners’ dictionary, fraud is the crime of cheating

somebody in order to get money or goods illegally. Corporate perspective, fraud is any

act perpetuated by, for or against a business corporation. Management perspective,

fraud is the intentional misrepresentation at corporate or unit performance levels,

perpetuated by employees serving in management roles who seek to benefit from such

fraud in terms of promotion, bonuses or other economic and status symbols.

Wastages as defined by Oxford Advanced Learner’s Dictionary is the act of losing or

destroying something, especially because it has been used or dealt with carelessly, that

is loss by deterioration, wear or destruction.

1.2 STATEMENT OF THE PROBLEM

Fraud and wastages are the major economic crime that leads to liquidation and

distress in business organizations. No business organization operates with the intention

of winding up but instead embraces the going concern. Internal auditing is an

independent appraisal function that is performed in a wide variety of companies,

institutions, and governments. What distinguishes internal auditors from governmental

auditors and public accountants is the fact that they are employees of the same

organizations they audit. Their allegiance is to their organization, not to an external

authority. Because internal auditing has evolved only within the last few decades, the

roles and responsibilities of internal auditors vary greatly from one organization to

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another. Internal audit functions have been structured based on the differing

perceptions and objectives of owners, directors, and managers. Internal control (theory)

is an system of control that is establish by management while internal audit (practical) is

an institution that is established by management to ensure strict compliance with the

internal control measure established. In other words there will be no internal audit if

there is no internal control and no internal auditor if there is no internal audit.

This study will look into how fraud and wastage lead to collapse and closure of

many business organizations. Fraud and wastage impinge upon the accounting

profession. Fraud and wastage result in huge financial losses to business organizations.

It is based on the above that the researcher is carrying out this study. The massive

failure of organization will drastically reduce if managers, accountants, internal auditors

and other officers involved embrace the proper accounting principles or rules that guide

against fraud and wastage perpetuation.

1.3 OBJECTIVES OF STUDY

Many organization both corporate and financial institution have being dealt with

by cankerworm of fraud and wastages. This study is aimed at the role of internal

auditors in managing fraud and wastages in business organizations. The main

objectives of this study are:

i. To identify the nature, types and causes of fraud and wastages in business

organization.

ii. To find out the factors that motivates workers to indulge in fraud and wastages.

iii. To identify the effects of fraud and wastages in business organizations.

iv. To highlight ways of detecting and minimizing fraud and wastages in business

organizations.

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1.4 RESEARCH QUESTIONS

My research questions for this study are as follows:

i. What are the types and causes of fraud and wastages in business organization?

ii. What are the factors that motivate workers to indulge in fraud and wastages?

iii. What are the likely effects of fraud and wastages on business organization?

iv. What are the ways of detecting and minimizing fraud and wastages in business

organizations?

1.5 HYPOTHESES OF THE STUDY

Hypotheses for the study are as follows:

i. The level of fraud and wastages are not caused by improper management

control system put in place by management.

ii. A greater percentage of fraud and wastage in business organization are not

caused by societal factors.

iii. Fraud and wastages cannot lead to the collapse of business at extreme cases.

iv. Fraud and wastages cannot be prevented through the use of proper accounting

methods set aside for fraud and wastages detection.

1.6 SCOPE OF THE STUDY

For this project, some selected manufacturing companies were used and these

Selected manufacturing companies are May & Baker Plc and Drugfield Specialty

Product Ltd. The companies are committed to the manufacture, distribution and delivery

of quality healthcare products and services that constantly meet the needs of their

customers. They were selected because they are manufacturing companies that will

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Enable the researcher to obtain results that will be adequate for making a holistic

statement about the study.

1.7 SIGNIFICANCE OF THE STUDY

The significance of management of fraud and wastages in business

organizations cannot be over emphasized. This study will help identify the various

variables that motivate people into engaging in various fraudulent activities. This study

will also help most business organization to know the great role of internal control and

internal auditing in fraud detection and wastage control or wastage management and

this will enable them to embrace them tightly. This study will also go a long way in

neutralizing the effects. And harm caused by fraud and wastages. Finally, through the

recommendation that the researcher will proffer, business organization will adopt the

best accounting method in order to minimize the incidence of fraud and wastages in

order to maintain sanity and also to maximize profit.

1.8 DEFINITION OF TERMS

Business organization:- It can be define as the form of every human association

for the attainment of a common purpose. Mooney (1939: 1)

Fraud: - Fraud has so many definitions. It can be defined as an act of deception

deliberately practiced to gain unlawful or unfair advantage.

Wastages: - It can be define as a loss, decrease or destruction of something (as by use,

decay, or leakage) British English Dictionary.

Internal control: - internal control is the system, plan of action and philosophy built into

the operating activity of the business to help ensure the actual events and activities that

Occur comply with the owner/manager expectations, intents, and goals.

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Internal auditor: - internal audit is an institution that is being established by management

of organization to ensure that the procedures and rules of the organization are strictly

adheres to ensure that there is compliance with the internal control.

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REFERENCES

Ezeja, E. O. (2010). Project Writing: Research Best Practices. Enugu:

ADELS Foundation Publishers.

Hornby, A. S., (1998). Oxford Advanced Learners Dictionary. London:

Oxford University Press.

Ikeagwu, E. K., (1984). Groundwork of Research Methods and Procedures.

Enugu: Institute of Development Studies.

Eze, J. C., (2008). Principle and Technique of Auditing. Enugu: JTC

Publishers.

Onwumere, J. U. J.,(2009). Business Economic Research Methods. Enugu:

Vogasen Ltd.

Udeze, J. O., (2005). Business Research Methodology. Enugu: Chiezugo

Ventures.

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CHAPTER TWO

LITERATURE REVIEW

2.1 INTRODUCTION: -

Many business organizations are aware of the risk of fraud and wastages. The

effects of fraudulent practices affect the banking industry, business organization and the

nation as a whole both politically, socially, economically, and otherwise. Fagbemi (1980)

defined fraud as an act of depriving person dishonesty of something, which is his, or of

something to which he is or would or might, but for the perpetration of the fraud, be

entitled. Omotosho (1994) defined fraud as any activity that is tainted with criminal

intention to cheat or deceive. The financial Institute Training Centre defined fraud as an

act of deception deliberately practiced to gain unlawful or unfair advantage. Deception

directed to the detriment of another. A. S. Hornsby, Oxford Advanced English Dictionary

defined it as a criminal deception. Oputa described it as an all embracing genetic term

covering multi-furious means by which human ingenuity could demise. British Dictionary

defined wastage as the loss by deterioration, wear or destruction. As a preventive

measure for fraud and wastage in business organization, accounting principles must be

installed. The role of accounting must be well recognized by organization.

Okechukwu Unegbu, president and chairman Council of Chartered Institute of

Bankers of Nigeria, CIBN, noted that Nigeria operating environment makes it imperative

to consider the internal control measures and practices introduced and implemented by

different organizations on continuous basis. He said, it is because internal control

management is a key strategy in the survival and success of all organization. For the

installation and operation, internal control must be well understood. In Nigeria, the

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understood. In Nigeria, the problem being face by business organization are that of

fraud and wastages. Many authors have written about fraud and wastages and also

many articles have also appeared in news media amplifying the need for managing

fraud and wastages in business organization. Fraud and wastages have eaten deep in

so many business organizations in Nigeria, which resulted to either wounding up or

destabilization. The number of new business entrepreneurs is increasing at a fanatic

rate as a result of attractive financial opportunities, corporate downsizing and the large

number of professionals who are opting for early retirement or who are just bored with

the routine of every day corporate life. People start a large number of new businesses in

their second or third career. Those individuals have accumulated many business skills

and talents over their professional years. Even with all these years of experience and

skills there still remain an apparent lack of understanding of accounting controls and the

benefits associated with proper implementation of accounting controls.

Turning on the television or reading the newspaper today, it is common to find a

story relating to fraud or financial manipulation. Stories involving insurance fraud,

medical fraud, securities fraud, governmental fraud, payroll fraud, bank fraud,

telecommunication fraud or credit fraud just to mention but a few. These frauds involve

but are not limited to inflated sales or profits, over stating expenses, overtime abuse,

employee or management misappropriations, related party transactions or currency and

security manipulation. Even though these counterproductive activities will always plague

the economic arena, the well informed and advised entrepreneur can eliminate or

minimize the consequences on their particular business. Clear and accurate statistics

on fraud, wastages and related fraud costs are not available. No organization maintains

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accurate statistics on fraud and irregularities. Actually, there are many disincentives for

organization to disclose or report these types of activities. The best information

available on fraud activity and costs are obtained from surveys. Based on survey

results; a large number of business reports significant instances involving misuse of

resources. It is estimated that hundreds of billions of Naira are mishandled each year

and some experts state that this amount is only a fraction of the true costs. A nineteen

ninety-five (1995) study conducted by the Association of Certified Fraud Examiners

estimated that fraud, wastages and other fraud related crimes is increasing at the rate of

fifteen percent (15%) per year. With the increase in criminal sophistication, increase

reliance on complex information system and the decrease in social morals, the

prevalence and costs of fraud is expected to increase. Many people believe that fraud

only occurs in the large organizations and the external auditors uncover most frauds.

The facts do not support the belief. A nineteen ninety-four (1994) fraud survey by the

forensic and investigation Services revealed that external auditors detect only five

percent (5%) of frauds and the small medium size company is just as likely to be

victimized as the large organization. This survey indicated that the staff or employees of

the organization uncover the majority of misdeeds. The Association of Certified Fraud

Examiners further concluded through their survey that small businesses are most

vulnerable to fraud, wastages and related abuse.

In subsequent subchapters, the forms, nature, causes, of fraud will be discussed.

2.2 TYPES OF FRAUD IN BUSINESS ORGANIZATION

Fraud in business organization can come in the form of: -

The defalcation of cash or money worth by employee of an organization. This can

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Come in two ways: - Act of theft and conversion.

Manipulation of accounts or records which may or may not be accompanied by

actual theft of assets of the organization aiding or labeling same.

Manipulation of income: - this is the commonest type of fraud in business

organization. This can take the following forms. Issuing receipt to customers, making

out the counterfeit for a small sum and misappropriating the difference, misappropriating

of cash receipt from customers or delaying remittance to the firm’s account, converting

the firm’s cash to personal use.

Manipulation of payment: - this type is mainly seen or practiced in Government

parastatals and requires the co-operation of people holding position of trust. They come

in forms like creation of files supplied and contractors followed by payment for goods

and services not supplied and rendered, over payment of creditors deliberately with

intention to personal enrichment, misappropriation unclaimed wastage and converting it

for personal use, inflation of purchase invoice contracts, creating ghost workers on

payroll and pocketing their payments, pay rolling employees twice and conversion of the

addition to personal use, misuse of organization’s property e.g stationeries, telephone

services, destruction of financial records and creation of fictitious account, forgeries on

negotiable instruments, creating fictitious credit

2.3 CAUSES OF FRAUD AND WASTAGES IN BUSINESS ORGANIZATION

Fraud and wastages have become daily newspaper captions. These are

perpetrated either by staffs, outsiders or between both. It will be wise to highlight the

causes of fraud and wastages to enable us proffer possible solution as it affects our

business organizations. The causes of fraud and wastages in business organizations

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are in various forms. They include: -

Internal or management causes

Environmental/societal factors

Both internal and external factors of fraud and wastage perpetration would not be

effective without the presence of these three factors. They are: -

Willingness: - the perpetrator is willing to defraud and ready to face the consequences

no matter the outcome of the action.

Opportunity: - the perpetrator will be looking for lapses from any angle in the

organization to enable him execute his willingness.

Exit: - the perpetrator must involve an interested and eager colleague in order for exit.

E.g a cashier in the bank with a treasury custodian can carry out a fraud.

2.3.1 INTERNAL/MANAGEMENT CAUSES

These are factors that can be traced to the internal environment of the firm. The

major organizational factors that sustain fraud include: -

Fraud and wastages caused by management

Fraud and wastages caused by employees

FRAUD AND WASTAGES CAUSED BY MANAGEMENT

1. Lack of adequate training and re-training of staffs on both the technical and

theoretical aspect of the job leads to poor performances and results will be

affected which will lead to fraudulent acts and wastages.

2. When management of various business organization fails to adhere to the laid

down accounting policies and principles.

3. Inadequate job rotation makes the internal control system of an organization to

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Be porous. Poorly organizational structure, poor delegation and undefined

organizational structures.

4. Poor security arrangement for documents and files especially organizations

where the filling system is poor and where the file arrangements are poorly

designed.

5. Lapses and inadequacies of management control systems: - when there are

lapses in the management control system of an organization, it serves as an

easy exit for the perpetration of fraud and wastages either by management or

staffs.

6. Lack of adequate motivation for staffs: if staffs of an organization are not

adequately motivated, they could decide to motivate themselves through doing

away with the organization’s properties in ways more convenient for them.

7. Staffs with dubious character or questionable character should be suspended but

instead because of God fatherism, they are transferred to another branch of the

organization then expelled.

8. Management can facilitate fraud and wastage when they fail to live by example.

The handling of fraud and wastage cases by management will determine

whether more would be perpetrated or not.

FRAUD AND WASTAGES CAUSED BY EMPLOYEES

Staff negligence and indiscipline: these can give rise to fraud and wastage perpetration

in business organization. Indiscipline, which might result to lateness, poor attitude to

work can lead to poor performances which give way for fraud and wastages to occur.

When sophisticated accounting machines are used by inexperienced employees, a lot

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of errors could arise and lead to the production of unreliable records. Training should be

given to staffs when such machines are introduced to the company. On – the – job

training is also very important as it will reduce mistakes and errors which can be forms

of fraud and wastages.

2.3.2 ENVIRONMENTAL/SOCIETAL FACTORS

These are factors in the external environment of the business, which sustains

fraud. These factors are beyond the active manipulation of the management. Causes of

fraud and wastages in business organizations in Nigeria are traceable to the general

dishonesty in the society where morality is thrown to the dogs. There are cases of fraud

and wastages that come about as a result of absence of inadequate, appropriate legal

frame work coupled with the inordinate delay experiences in prosecuting fraud cases.

Societal values, insatiable lust for wealth by workers and the society at large. In Nigeria,

the more you labour, the less you get in return. People that do less work but because

they are influential misappropriate funds and abuses the seat that the poor masses

elected them into. Both young and old want money by all means either by work or

crook.

Ineffective and inefficient law enforcement mechanism necessary for detecting or

prosecuting fraudsters with minimum delay. Delays in the prosecution of fraud cases

have been encouraging other potential fraudsters to try their luck. They (fraudsters)

believe that after initial judgment, they will be released on bail while investigation goes

on. In Nigeria, many commissions have been set up to fight fraud. The Oputa panel,

EFCC to mention but a few. All the perpetrators that the Oputa panel exposed, What

happened to them all? Nothing, because they are the bed rock of the society. All the

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money that was got from General Sani Abacha and his family, where did the president

Chief Olusegun Obasanjo meaningfully put them into. He neither created job

opportunities to reduce the outrageous number of graduates rooming the streets of all

the states in Nigeria nor reduced the amount of families that are paying in order to

educate their children. He has made education to be for the rich only.

Wastages are being experienced in our organizations especially in the production

sector. There are some products that can be recycled and used in the production of

other goods but due to selfishness, these by-products are hoarded and sold by

management or staffs. Some wastage experienced in our organization is deliberate.

Delibrate wastage reduces the raw materials and the quantity of output produced. This

will automatically reduce sale, profit will decline and liquidation of the company can set

in. When fraudsters are not adequately prosecuted, it gives a solid ground for others to

trample on. Can a criminal investigate a criminal? Of course, no. Lack of effective

deterrent punishment has contributed immensely to the growth of fraud and wastages in

Nigerian business sectors. The police authorities acknowledged that they are ill

equipped to handle frauds in Nigeria. In the view of summers (op cit: 576-77) he

provided the answers to the cause of fraud and wastages under three headings namely:

Deliberate intent

Management ignorance

Inadequate financial control

Deliberate intent: - dissatisfied employees who feel that they have put in their best for

the realization of the organizations goals but the organization in return fails to motivate

them. Dissatisfaction of work can also come inform of

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Poor working conditions: when the environment lacks necessary facilities that will boost

the morale of staff, it makes them never to put in their best. Management should provide

good working conditions like canteens, air conditioned rooms, modern technologies to

fasten their jobs etc., these will make them happy thereby all hands will be on deck to

move the company forward.

Untimely and relatively poor salaries: when salaries of staffs are paid on time it

demoralizes them a lot because most of them have children at home that need the

money for their upkeep. Money is one 0f the most motivating factors in any

organization, when it is poor, the staffs will have their eyes outside making them not to

be consistent in their jobs which on the other hand will definitely reduce the production

of the company and there will be high staff turnover will also kills an organization. These

employees feel that they can compensate themselves through defrauding the

organization.

Managerial ignorance: - The attitude of management can encourage fraud. This comes

to light when management fails to live competent personnel’s especially in the

computer/accounts sections. These failures only serve to encourage employee

indifference. An organization that fails to properly reward computer competence has set

the stage for lapses, which will undoubtedly hurt the organization. A criminal opportunist

will not hesitate to exploit such weakness for his selfishness.

Inadequate control: This happens when there is lack of sufficient deterrent in the control

system. It introduces laxity, which easily prompts an individual to carry out crimes.

2.4 EFFECT OF FRAUD AND WASTAGES IN BUSINESS ORGANIZATION

Fraud has caused a lot of erosion in business organization in Nigeria. Many

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business organizations are suffering from the cankerworm of fraud and wastages. Musa

(1986) said that many business organizations are dragged into the valley of distress,

which has resulted, to poor customer services, complete erosion of confidence on the

part of partners, especially international partnership or foreign investors. This unhealthy

practices does not in any way bring a turnaround impact on the growth of the economy

especially Nigeria that is under the clutches of third world syndrome. Fraud and

wastage by customers and clients come in various forms. Increase in operational costs,

loss of trained staffs and high staff turnover, liquidation of the business at an extreme

case, business failure arising from the insolvency of the business, fraud and wastages

lead to reduction in the quality and quantity of goods and services provided. Fraud and

wastages constrain the liquidity of the firm especially where it involves defalcation of

cash, fraud and wastages also constrain the capital adequacy of various firms.

2.5 WASTAGES IN BUSINESS ORGANIZATIONS

Wastage as defined earlier is the loss, destruction or decrease of something (by

use, decay or leakage). Wastages occur in firms that are inefficient and are poorly

managed. Wastages sustain cost escalation and inefficiency in resource use. It

particularly sustains higher inputs in the productive process (higher labour costs, higher

raw material usage, idle capacity, capital resources etc). Wastages lead to cost

escalation, cost over runs, poor stock management and generally financial

mismanagement. Wastages could also occur as these inputs pass through the

transformation process. The transformation process consists of designing, processing,

treating, fabricating, refining, assembling, shipping and results to output which could be

physical products or services (Longneck et al 1994). Generally, wastages result to lower

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profit margins for the firm, low quality products and various inefficiencies.

2.6 BASIC INTERNAL CONTROL METHODS

Internal control is a system, plan of action and philosophy built into the

operating activity of the business to help ensure the actual events and activities that

occur comply with the owner/managers expectations, intents and goals. In

accomplishing this task, internal control must meet the following:

1 Physical assets and information are properly accounted for and safe guarded

against waste, fraud and irregularities.

2 Ensure resulting financial and operating data is useful, competent, accurate,

reliable and timely.

3 Ensure efficient operations.

4 Periodic evaluation and appraisal of employees and management performance.

5 To ensure maximum productivity and coordination of business resources with

established goals.

6 Compliance with federal, state and local laws and ordinances.

Internal control is not just fraud prevention oriented. Adequate internal control is

desperately needed to add creditability to the summary performance data. Investigation

resembles gambling without adequate, competent and verifiable data and information.

The business owner/manager needs to adopt clear and professional standards for the

preparation and communication of consistent and reasonable information. We are in the

information, global and electronic commerce age. Success in business is dependent

upon timely, accurate and reliable information and is information driven. As business

becomes more electronically connected and globally focused, the information mix

30

changes with less dependence on the paper trail. With these changes the system of

internal control becomes more relevant and must adapt to this new environment.

Electronic commerce and internet technology has forever changed the way business

information is exchanged and business is conducted. Internal control must satisfy the

basic goals already identified in the internal control definition and ensure that:

information security and confidentiality, information is kept secure from hackers, privacy

of sender and receiver. Experience has shown that many business owners/managers

have a limited understanding of safeguarding assets from waste and fraud. Where they

have the greatest difficulties is with providing reasonable assurance that the goals of

accurate, relevant and timely accounting and financial information are achieved

encouraging employees’ compliance with company policies and procedures.

BASIC PRINCIPLES OF ACHIEVING A PROPER SYSTEM OF CONTROL

The intent is to set a foundation upon which the business owner/manager can

build their specific system of control.

All properly designed control system is based on six principles:

1 Segregation of duties: duties must be adequately segregated among staffs to

ensure proper internal control. Each staff to a particular responsibility which

he/she can be accountable for and be held for in case of any misuse.

2 Establishment of responsibility and accountability: responsibility goes with

accountability. Once a staff is responsible for a particular department, he is

accountable for any mismanagement that arise from such department. A

staff should be assigned to the department which he/she is able to handle

properly and to which he/she is a professional.

31

3 Proper documentation of transactions: this should be properly observed in

every company. Documentation is information and any company that lacks

information is not a going concern. All documents should be properly

documented for easy references.

4 Physical and mechanical security devices: all organizations should provide

both physical and mechanical security devices for the safety of their staffs.

this is also providing a good working condition for the staffs, which gives

them a relaxed mind in carrying out their various duties.

5 Independent internal verification: there should be an independent internal

verification in all organizations for proper internal control system. This can be

matched alongside with the verification of external auditors.

6 Other controls: The two most important and essential principles of every

effective control system are proper segregation or separation of duties and clear

establishment of responsibilities. Work responsibilities should be divided among

several employees. One employee having complete control over the entire

transaction could result in intentional errors.

An effort should be made to separate the different phases of the transaction into

at least three parts and the responsibility for carrying out these parts should be

assigned to three qualified individuals.

1 Authorization: a qualified individual should have the responsibility to authorize

and approve specific transactions.

2 Recording transactions: one or more qualified employees should be assigned

the responsibility for proper recording of all authorized transactions.

32

3 Custody of assets: the responsibility for custody, safeguarding and limiting

access to franchise assets should be assigned to an appropriate employee or

employees.

The objective is to design the system to ensure adequate checks and balances.

assuming most employees are honest, it may be difficult for them to recognize their own

mistakes. The proper division and understanding of responsibilities will allow one

employee, without duplication of effort, to review the work of others for propriety.

Basically, knowing that actions will be reviewed should encourage employees to

perform their responsibilities more carefully and when mistakes are made they should

be identified before they result in harmful consequences. When problems are noted the

owner/manager will be in a better position to identify where and what corrective action is

appropriate.

Proper documentation of transaction involves preparing adequate support trails for all

actual transactions and events. Simply using and accounting for all pre numbered

documents will improve the effectiveness of the internal control system. For example

using pre numbered checks when paying invoices and accounting for all check numbers

will minimize duplicate payments and unauthorized payments or purchase goods and

services should be pre numbered, proper secured and accounted for periodically.

Physical and mechanical devices include simple and expensive as well as complex and

expensive protective mechanical devices. A few of the more common mechanical

devices include door locks, restrictive counters, locked safes, fencing, burglar alarms,

computer with safeguard passwords, check protectors and employee identification

badges. Mechanical and electronic controls such as garments sensor, video monitors,

33

and scanners enhance accuracy and reliability of the total system. Also, effective

internal controls incorporate the customer’s observation of the scanning or entering of

prices serves as an excellent check and balances and strengthens the total system.

Independent internal verification is a critical element in effective systems of control. In

large business settings the position of internal auditors can be established. In smaller

firms, where internal auditors would prove cost prohibitive, the owner/manager must

take responsibility for this internal review. The owner/manager must take a proactive

role in all aspects of the design and implementation of a solid system of control. The

owner/manager, on a surprise basis must periodically test and review the system for

effectiveness, efficiency and appropriateness. All noted discrepancies and exceptions

should be immediately addressed.

The ‘’other controls’’ include topics and items not addressed in the other five principles.

The ‘’other controls’’ include risk reducing steps like bonding of employees who handle

cash, mandatory vacations and the requirement that another employee perform the

duties regularly performed by the person on vacation. This principle also includes the

periodic rotation of employee’s duties.

The business owner/manager must clearly understand that there is not a one-size

system of internal control that fits all situations. Each organization must have policies,

procedures, attitudes and an environment that is specific for the needs and conditions,

product lines and the size of the business change the specific check and balances in

the system of internal control may also have to be changed.

34

2.7 THE ROLE OF INTERNAL CONTROL IN MANAGING FRAUD AND WASTAGE

IN BUSINESS ORGANISATION

Internal control has an important role to play in the management of fraud and

wastages in business organizations. Any business organization that embraces the basic

accounting principles or policies set aside for fraud and wastage detection will never

experience liquidation or winding up of any kind. The researcher believes that

accounting tools are the basic strategies that can be used to fight fraud and wastage if

properly installed. The prevention of fraud and wastages in business organization is

very important for the success and profitability of an organization. The question is what

accounting measures are put in place to ensure that the effects of fraud and wastages

do not threaten the survival of an organization. The accounting measures that should be

put in place to fight fraud and wastages are as follows:

1. Management Control System: This is the basic strategy that should be

installed. Management control system involves the means evolved by

management to foster organizational efficiency and growth. It involves the

process set up by manager to plan and control the activities of the business. It

calls for good control process and also a feed back mechanism such that the

manager is able to monitor all aspect of the business and thus ensure

achievement of the organizational goals. This also involves measuring and

evaluating of the departmental performances and efficiency both in terms of

resources use, output and productivity. Management control system essentially

leads to cost controls, effectiveness in the programming of activities and in the

utilization of human and material resources.

35

2 Auditing and Investigation: Auditing as defined by Aguolu O. (2002). Is the

Independent examination of the financial statement of an organization with a view

to expressing an option as to whether these statements give a true and fair view

and comply with the relevant status. Auditing involves three distinct procedures:

1 Ascertaining the validity of the original transactions.

2 Confirming the completeness and accuracy of the recording of these

transactions.

3 Ensuring that the financial statements have been prepared from and are in

agreement with the records.

An auditor to be able to carry out a meaningful examination as required for the

purpose of his report, he does not only examine the financial statements, he of

necessity, goes beyond the financial statement and also carries out a skillful and careful

examination of the records of the organization in order to ensure that the financial

statement are a reflection of the affairs of the organization as appear in their records.

The primary object of an audit is to examine the financial statements prepared by the

officers of the company and to members:- whether the financial statements shows a

true and fair view and comply with the relevant status, whether proper records have

been kept, whether the financial statements are in agreement with the records.

When an organization engages an auditor that possesses the qualities required of him,

the organization is in the best position to reap the benefits of auditing. An auditor must

possess the following qualities:

1 Independence: independence in relation to the auditor is a state of mind. The

auditor has no inhibitions. He should be free to think the way he chooses, to ask

36

whatever questions or make any observations he consider appropriate without

the underlying fear of being misunderstood.

2 Technical competence: the auditor should have a perfect understanding of the

activities of the organization that is the subject of the audit. He must be

conversant with both current accounting theory and practice. He must possess

the natural skill and experience for sound judgment over matters that are

relevant to the work.

3 Honesty: the honesty does not end with his telling the truth regarding his finding

or honesty to other people. It includes honesty to him self. He must be honest in

recognizing the shortcomings and never presenting himself as knowing all when

in fact he would have benefited from the superior knowledge of his client.

Benefits of a thorough and skillful audit:

1 An audit is a strong moral check on the directors and other officers not to

Engage in any fraud or manipulation in relation to the affairs of the company.

2 Investors may resort to the audited financial statements of organizations for

Deciding in which establishment to invest.

4 Auditing can be an aid to management as to the presence of areas of

Weaknesses in the system of controls or even the actual existence of errors or

Fraud, thereby enabling them to take corrective measures.

From the above, internal audit serves as a proper control measure in the

Management of fraud and wastages in business organizations. The International

Federation of Accountants defined internal audit as an element of the internal control

system set up by the management of an enterprise to examine, evaluate and report an

37

Accounting and other controls and operatives of the organization. Internal auditing is an

aspect of managerial control function, which measures and evaluates the effectiveness

of other controls. Internal audit reviews operations and ensures the maintenance of

internal check and the prevalence of a good accounting system. The essence being to

make sure that they are effective in their design and operation. The overall objective of

internal audit is to assist members of management in the effective discharge of their

duties and furnishing them with objective analysis, appraisal, recommendations and

pertinent comments concerning the activities of the objectives.

1 Investigation: According to Aguolu, an investigation is the examination of the

accounts and records of an organization on behalf of a client for a special purpose. An

investigation is carried out to obtain a particular piece of information. An accountant

carries out investigation. It may be required in circumstances where facts are in doubt or

in dispute or where knowledge is required for a special purpose.

2 Internal Control System: This is an important aspect of the management control

System. It is all inclusive in nature and embraces both internal check and internal audit.

Forward (1983) defined internal control as not only internal check and internal audit but

whole system of control function and otherwise established by the management in order

to carry on the business of the enterprise in an orderly and efficient way and as well as

to ensure adherence to management policies, safeguard assess and secure as far as

possible the accuracy and reliability of its records. Internal check has been defined by

Millichamp (1978) as the check on the day to day transactions which operate

continuous as part of the routine system whereby the work of one person is proved

dependent or is complementary to the work of another, the object being the prevention

38

or early detection of errors and fraud, it includes matters such as the delegation and

allocation of authority and the division of work, the method of recording transactions,

and the use of independently ascertained totals against which a large number of items

can be proved. Furthermore, he said that an important aspect of internal check and

internal audit would include independent proving.

3 The Budgetary Control: According to the Association of Cost and Work

Accountants, Budgetary control is the establishment of budgets relating the

responsibilities of executives to the requirements of a policy, and the continuous

comparison of actual with the budgeted results either to secure by individual

action the objective of that policy or to provide a basis for its revision. The

fundamental principles of budgetary control are as follows:

1 To establish plan or performance targets for the entire department and it will

Help to co-ordinate all the activities of the firm as a whole. The actual

Performance should be compared with the established targets.

2 Determine the variance and analyse the reason for any observed variances.

3 To put in motion necessary remedial action.

Budgetary control benefits business organizations in so many ways like:

1 It coordinates all the activities of the supervisors and managers of the firm

towards the achievement of the goals.

2 It combines the energies of all levels of management in the preparation of the

Budget.

3 It centralizes control towards group’s goals.

4 It decentralizes responsibilities to various managers at the different levels of the

39

oganization.

5 It guides management decision.

6 It plans and controls the firm’s income and expenditure so as to minimize profit.

7 It ensures that all capital expenditure of the firm is channeled to profitable

ventures.

8 It points to all top management where urgent remedial action is needed in the

firm operations bases on the deviation observed.

Budgetary control helps in a great way in the prevention of fraud and reduction of

wastages in the aspect of (a) cash control (b) cost control (c) stock etc.

1 Quality Control: One major strategy for controlling wastage is through the

establishment of quality control in the firm. Quality control enhances customer

satisfaction and that survival of the organization. Quality control cannot be

inspected into a product. Quality control begins with the design of the production

process, the product feature, setting the standard to support level of

performance and establishing the technique for quality control. Inspection

standards can be used to scrutinize a part of product to determine whether it is

good or bad.

2 Efficient Supervision and Operation: Lack of adequate supervision and control

has been identified as a key factor that leads to fraud and wastage. Supervision goes

beyond sitting down in an air conditioned office and checking on reports sent in by

subordinates. It should involve crosschecking all the facts sent for approval, physical

inspection at regular intervals and being present at the store department or other

departments to crosscheck the data and statistics sent in.

This involves monitoring resources use and setting standards and using these as

40

a basis for measuring performance. It also involves asking question as to the cause of

any variance observed and satisfying yourself with the reasons for any lapses observed.

It also involves putting measures in place to correct any observed deviations.

3 Job Rotation: This is another accounting strategy that can be used to prevent

fraud and wastage. Job rotation amongst staffs should be constantly in order to avoid a

staff being too long on a position and thus manifest inefficiencies. He could also master

the operation so perfectly that he is able to exploit the top holds in the operational

procedures to perfect fraudulent practices. When a staff refuses to go on casual or

annual leave for a long period of time, it points out that he is deeply rooted in a

fraudulent activity. Staff rotation o a large extent reduces inefficiency and the ability to

cover up fraud. Job rotation is an important element in the prevention of fraud and

wastages.

4 Rules and Regulations: To enhance the control process, there is need for well

articulated and document procedures, rules, and regulations. They must be articulated

in the form of manuals, which specify the course of action, and the guides to decision

making. This manual must be updated constantly based on new exigencies, new

developments in the industry, and changes in environmental factors and so on. The

manual provides an effective framework for the examination of the different operations

of the organization.

It yield ground for an assessment of the performance of the staff, assessing deviation

from the prescribed standard and areas for normalization in the operation of the staff.

Moreover, it assists in the training and retraining of the staffs. Thus, all staff members

must be well educated on the procedures of the organization in force especially those

41

relating to the use of cash resources of the organization and the company assets.

2.8 FRAUD AND WASTAGE PROTECTION AND DECTECTION

The business owner/manager has primary responsibility for the design,

implementation and monitoring of a sound and proper system of control. The internal

control system involves the entire process of monitoring the total operations including:

3 Changing markets and business environments,

4 Changing and adjusting the right people in the right positions,

5 Making the most of existing skills and talents,

6 Production of superior or non-hazardous goods or services,

7 Preventing fraud and irregularities.

In fulfilling this responsibility, the owner/manager should be especially concerned

and alert about the possibility of fraud. The owner/manager must establish counter

measures to minimize the occurrence and impact of fraud. As indicated earlier through

survey result, owner/managers should understand that the risk of impropriety is not

satisfied by an external financial audit. External auditors rely heavily on sampling and

sampling may not detect the fraud. Experts have identified the following top methods for

uncovering frauds:

1 Specific management investigation

2 Internal audits

3 Chance occurrence

4 Customer letters

No system is immune to the occurrence or hazards of fraud and waste, and to

42

ignore the existence of fraud and waste may make the difference between profitable

operations and total failure. In attention to internal controls and ignoring clear warning

signs of fraud can prove fatal to any organization. It is important for management to be

cautious in pursuing all situations that seem questionable. Management should be

reluctant to accuse anyone of fraudulent activities and give the person the benefits of

doubt until the facts and circumstances warrant otherwise. While it is wise to be

cautious the owner/manager has a duty to review all situations that seem unusual.

Typically, fraud warning signs are evident and the owner/manager must be alert for

them. John J. Hall, a fraud expert, identifies several signs that may indicate that fraud is

occurring. They are:

1 Multiple endorsements on commercial checks

2 He use of common or repetitive names on refund documents

3 Line items in standard reconciliation that do not go away

4 Customer complaint about records and customer account

5 Vendor address that are that same as employee address

6 No proceeds from the disposition of used assets.

While this list is not all inclusive it does indicate the type of events or evidence

available to indicate the possible existence of fraud. This list should be viewed as a

starting point and it is important to remember that each environment and situation is

unique and constantly changing. Knowledge of the types of fraud and wastages, the

condition under which fraud and wastage occurs and who commits the fraud may assist

the business owner/manager achieve reasonable assurance that the occurrence and

consequences of fraud are minimized. A recent Association of Fraud Examinations

43

survey identified the following five categories of fraud and percentages of the total fraud

each represented;

1 Customer 33.8%

2 Employees 32.7%

3 Managers 17.7%

4 Vendors 7.7%

5 Others 8.1%

100.0%

The business owner/manager should recognize that the incidence of fraud is not just

a domestic phenomenon. The trend towards globalization and the information revolution

has multiplied the risk of fraud and decrease the time available o identify and neutralize

it. Our society is becoming more electronic dependent. Electronic shopping, banking,

education, financial investing and even dating and marriage are becoming the norm.

Almost any business transactions can be handled without a hard copy paper trail.

This electronic age increases the risk of transmission errors as well as unauthorized

access resulting in the review use of confidential and proprietary information. Again, the

business owner/manager must rely on the proper designed and implemented internal

control system to ensure these transactions are safe and secure.

44

REFERENCES

Hornby, A. S., (1998). Oxford Advanced Learner’ Dictionary. London: Oxford University Press.

Eze, J. C.,(2008). Principle and Technique of Auditing. Enugu: JTC Publishers.

Adeyemi, A. A., (1993). Corporate Frauds in Nigeria. Lagos: FIIB

Horace, R. B., E. P Charles and E. P., John, (1990). Accounting Principles and Applications. 6th Edition. Manchester: Macmillan/McGraw Hill.

Aguolu, O., 2002. Fundamentals of Auditing. Enugu: Meridian Associates.

Association of Certified Fraud Examinators, (2001). ‘’Fraud Survey’’. Fraud Information , Volume 3, No. 21.

David, R., (1998). Auditing and Assurance Services. 5th Edition. South Western: University Press.

John, J. H., (1996). ‘’ How to spot fraud’’ Vol. 43. No 3.

Wells, J. T., (2001). ‘’Follow fraud to the likely Perp’’. The Journal of Accountancy, 191 (6) 19-24 March.

Osuala, E. C., (2005). Introduction to Research Methodology. Mlllennium Edition. Lagos: Cheston Books.

Elliot, R. K., and J. J., Willingham, (1980). Management fraud, Detection And Deterrence. New York: Petrocelli Books.

45

CHAPTER THREE

RESEARCH METHODOLOGY

3.1 INTRODUCTION

This chapter examines in detail the procedures used in collecting the relevant

data for the study, the research design, source of data, identifying the study population,

sample and sampling determination, the methods of data collected and presentation,

and research instrument.

3.2 RESEARCH DESIGN

The research design adopted by the researcher to carry out the study is the

survey research method. According to Osuala (1982), the survey research methods

studies both large and small populations by selecting and studying samples chosen

from the populations, to discover the relative incidence, distribution and interpretations

of sociological and psychological variables. In addition, this type of research focuses on

people the vital facts of people and their beliefs, opinions, attitude, invitations and

behaviors. They are also known to be versatile and practical in that they identify present

condition. The design is chosen because it gives a picture of a situation with a full

understanding of the phenomena for making a wide range of decisions.

3.3 SOURCES OF DATA

The sources of data for this research are sourced from various ways:

• Primary Data: This includes distributed questionnaires and personal interviews

• Secondary Data: The secondary data materials were gotten from various

sources, which include published textbooks, journals, internet articles,

magazines, lecture notes and newspapers.

46

3.4 RESEARCH INSTRUMENT

Questionnaires were designed which contained series of questions relevant to

our subject of enquiry. The questionnaires were administered to staffs to get their

opinion on the operation of the system on how fraud and wastages could be minimized

using accounting principles. Key staffs of the organization were interviewed orally, and

the responses from the interview were used to complement the questionnaire.

Existing literature by authors had contributed to this topic.

3.5 POPULATION AND SAMPLE SIZE DETERMINATION

The survey of ‘’MANAGEMENT OF FRAUD AND WASTAGES IN BUSINESS

ORGANIZATION: THE IMPLICATION FOR INTERNAL AUDITORS’’ was nationwide in

Scope but for the purpose of this research, the scope is limited to business organization

in Lagos and Ogun metropolis. The study population refers to the total elements under

study. Okeke (1995) defined population as the collection element units or individual of

which information is sought. The population was drawn from the management and staff

of May & Baker Nigeria Plc and Drugfield Speciality Product Ltd with staff strength of

one hundred and eighty (180).

May & Baker Nigeria Plc 75 people

Drugfield Specialty Product Plc 65 people

140 people

In drawing a sample for this study, the researcher has considered the entire

study. What is required, the objective of the study and what precision is required in the

objective of the study and what group of people is the sample to be drawn. Because

precision is required in this study sampling becomes imperative in this study. Data

47

obtained for this study is applied both mathematically and statistically. The sample size

is determined at 5% error tolerance and 95% degree of confidence using the Yamani

formular:

n = N 1 + (Ne2)

Where n = appropriate sample size

N = population size

e = desired margin or error 5% (0.05)

Substituting figures:

N = 140 1 + 140 (0.05)

= 104

3.6 DATA ANALYSIS TECHNIQUE

The data collected for this study were properly arranged, grouped in their

respective places and analysed using tables, bar charts and percentages. Also, Chi-

square X2 statistical test method was used to test the hypotheses. The formular for chi-

square is given as

X2 = ∑(O – E)2 E

Where :- O = Observed Frequency

E = Expected Frequency

Note: The degree of freedom will be used to determine the value of the critical point

Value on the chi – square table

Degree of freedom

• Df = (r-1) (c-1)

48

Where r = number of rows

C = number of columns

Level of significance is 5% or 0.05

DECISION RULE

Reject Ho if X2 ≥ X2α

Accept Ho if X2 ≤ X2α

3.7 VALIDITY OF THE RESEARCH INSTRUMENT

To ensure that the research instruments applied in the work are valid, the

research ensured that the instruments measure the concepts they supposed to

measure. The questionnaire was properly structured and a pre-test was conducted on

every question contained in the questionnaire to ensure that they are valid. Also, the

design of the questionnaire was made easy for the respondents to tick their preferred

choice from the options provided. Response validity was obtained by re-contacting the

individuals whose responses appeared unusual or inconsistent.

3.8 RELIABILITY OF THE RESEARCH INSTRUMENT

A reliability test was also conducted on the instrument to determine how

consistent the responses are. Reliability is defined as the degree to which similar

outcomes are produced by a measuring instrument when used in different situations.

Onwumere (2009:68). The researcher utilized the test/retest method of reliability testing

whereby the questionnaire was administered at two different times to the same group of

respondents. A time lag of three weeks was allowed to ensure that the respondents do

not have their earlier responses in memory. A correlation of the two sets of observations

was conducted and it reveals a high degree of association which indicates that the

49

measure is very reliable.

3.9 PROBLEMS AND LIMITATIONS OF STUDY

The conduct of research in Nigeria and of course, indeed, all developing

countries is imbued with a lot of problems. However, in this particular research, the

researcher encountered some limitations which are as follows:

• Delays in filling and resulting questionnaires by respondents.

• The unwillingness of some officers to release accurate information due to

security reasons.

• Smallness of sample due partly to limited financial resources.

50

REFERENCES

Ikeagwu, E. K., (1998). Groundwork of Research Methods and Procedures. Enugu: Institute of Development Studies.

Onwumere, J. U. J., (2009). Business and Economic Research Methods.

Enugu: Vongasen Ltd.

51

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

In this chapter, the analyses carried out on the data obtained are presented. The

analysis will be based on the responses obtained from the questionnaires and data from

oral interview.

In analyzing the data collected, out of the one hundred and four (104)

questionnaires distributed, one hundred and four (104) were collected which are

analysed below:

TABLE 4.1.1: EDUCATIONAL QUALIFICATION OF RESPONDENTS

VARIABLE RESPONSE PERCENTAGE

WAEC/ND/Others 30 28.8

HND/B.Sc 50 48.1

Professional 12 11.5

Master/Ph.D 12 11.5

Total 104 100%

Source: from survey data

From the above table 28.8% represented WAEC/ND/Other certificate holders, 48.1%

represented HND/B.Sc holders, 11.5 represented staffs with professional qualification

while 11.5% represented masters/Ph.D holders.

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TABLE 4.1.2: STATES OF THE RESPONDENTS

CATEGORIES OF STAFF RESPONSE PERCENTAGE

Management 9 8.7

Accounts/Internal Control 20 19.2

Productions 60 57.7

Purchases/supplies (store) 7 6.7

Security 8 7.7

Total 104 100

Source: from survey data

From the above table 8.7 represented management staffs, 19.2% represented

accounts/internal control staffs, 57.7% represented production staffs, 6.7% represented

purchased/supplies staffs, while 7.7% represented security staffs.

TABLE 4. 1. 3: ‘’ Effect of fraud and wastages on the survival and profitability of

business organization’’?

OPTIONS RESPONSE PERCENTAGE

Agreed 100 96.2

Disagreed - -

Not quite sure 4 3.8

Total 104 100

Source: from the questionnaire

Of the 104 questionnaires returned 96.2% can definitely state that fraud and

wastages threaten the survival and profitability of business organizations, while 3.8%

are not quite sure.

53

TABLE 4. 1. 4: ‘’ this objective of profit making can be hindered through fraud and

wastages’’.

OPTIONS RESPONSE PERCENTAGE

Agreed 100 96.2

Disagreed - -

Not quite sure 4 3.8

Total 104 100

Source: from the questionnaire

Out of the 104 questionnaires returned 96.2% stated that the objective of profit making

can be hindered through fraud and wastages, while 3.8% are not quite sure.

TABLE 4. 1. 5: ‘’ Of the following which is/are type (s) of fraud’’?

OPTIONS RESPONSE PERFENTAGE

Manipulation of income 9 8.7

Manipulation of payments 5 4.8

Manipulation of accounts or

records

15 14.4

Defalcation of cash by

employees

5 4.8

All of the above 70 67

Total 104 100

Source: from the questionnaire

Out of the 104 questionnaires returned 8.7% agreed that manipulation of income is a

type of fraud, 4.8 agreed that manipulation of payment is another type, 14.4% accepted

54

that accounts and record manipulation is another type, 4.8% accepted that accounts

and record manipulation is another type, while 67%% agreed that all are types of fraud.

TABLE 4. 1. 6: ‘’of the following which is/are type(s) of wastages’’?

OPTIONS RESPONSE PERCENTAGE

Cost escalation and

inefficiency in resource use

30 28.8

Higher inputs in the

productive processes

10 9.6

Poor stock management 27 26

All the above 37 35.6

Total 104 100

Source: from the questionnaire

Out of the 104 questionnaires returned 28.8% accepted that cost escalation and

inefficiency in resource use is a type of wastage,9.6 agreed that higher inputs in the

productive processes is another of wastages, 26% accepted that poor stock

management is a type of wastage, while 35.6% agreed that all the above are types of

wastages.

55

TABLE 4. 1. 7: ‘’Cause(s) of fraud and wastages in business organizations could

be any or all of the following’’.

OPTIONS RESPONSE PERCENTAGE

Staff negligence 10 9.6

Lack of motivation/training 15 14.4

Managerial ignorance 18 17.3

Deliberate intents 20 19.2

Inadequate control measure 36 34.6

Others 5 4.8

Total 104 100

Source: from the questionnaire

Out of the 104 questionnaires returned 9.6% said staff negligence is a cause of fraud

and wastage,14.4% said lack of motivation/training,17.3 said managerial ignorance,

19.2% said deliberate intent, 34.6% said inadequate control measure while 4.8% said

others.

TABLE 4. 1. 8: ‘’Can inadequate management control measures put in place

encourage fraud and wastages in business organisation’’?

OPTIONS RESPONSE PERCENTAGE

Yes 94 90.4

No 10 9.6

Not quite sure - -

Total 104 100

Source: from the questionnaire

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Out of the 104 questionnaires returned 90.4% accepted that inadequate management

control measures causes fraud and wastages, while 9.6% disagreed.

TABLE 4. 1. 9: ‘’Can societal factors cause fraud and wastages in business

organisations’’?

OPTIONS RESPONSE PERCENTAGE

Yes 100 96.2

No 4

-

Total 104 100

Source: from the questionnaire

Out of the 104 questionnaires 96.2% agreed that societal factor causes fraud and

wastages while 3.8 disagreed.

TABLE 4. 2. 0 ‘’which of the following is/are ways by which societal factors

contribute to fraud and wastages in business organisation’’?

OPTIONS RESPONSE PERCENTAGE

Insatiable lust for wealth 22 21.2

Misappropriation of frauds 13 12.5

Inadequate prosecution 20 19.2

Selfishness 15 14.4

All the above 34 32.7

Total 104 100

Source: from the questionnaire

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Out of the 104 questionnaires returned 21.2% said ways by which societal factors

contribute to fraud and wastages is through insatiable institution for wealth, 12.5 said

misappropriation of funds, 19.2% said inadequate prosecution, 14.4% said selfishness,

while 32.7% said all the above.

TABLE 4. 2. 1: ‘’ The effect of fraud and wastages could be the collapse of

business’’.

OPTIONS RESPONSE PERCENTAGE

Agreed 98 94.2

Disagreed 6 5.8

Total 104 100

Source: from the questionnaire

Out of the 104 questionnaires returned 94.2% agreed that fraud and wastages can lead

to the collapse of businesses, while 5.8% disagreed.

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TABLE 4. 2. 2: ‘’which of the following could lead to collapse of business’’?

OPTIONS RESPONSE PERCENTAGE

Increase in optional cost 14 13.5

Lost of trained staff and

high staff turnover

9 8.7

Reduction in quality and

quantity of goods and

services

20 19.2

Decline in

demand/Business failure

26 25

Capital

inadequate/liquidation

32 30.8

Others 3 2.9

Total 104 100

Source: from the questionnaire

Out of the 104 questionnaires returned 13.5% said increase in operational cost could

lead to collapse of business, 8.7% said lost of trained staff and high staff turnover,

19.2% said reduction in quality and quantity of goods and services, 25% said decline in

demand/business failure, 30.8% said capital inadequacy/liquidation and 3% said others

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TABLE 4. 2. 3: ‘’The uses of proper accounting methods prevent fraud and

wastages’’.

OPTIONS RESPONSE PERCENTAGE

Agreed 96 92.3

Disagreed 8 7.7

Total 104 100

Source: from the questionnaire

Out of the 104 questionnaires returned 92.3% agreed that the use of proper accounting

method prevents fraud and wastages, while 7.7% disagreed

TABLE 4. 2. 4: ‘’All or any of the following could be method (s) of preventing fraud and

wastages in business organisations’’?

OPTIONS RESPONSE PERCENTAGE

Management control

system

12 11.5

Auditing and investigation 20 19.2

Internal control system and

management information

system

24 23.1

Budgetary control 14 13.5

Job rotation 15 14.4

Efficient supervision of

operations

10 9.6

Rules and Regulations 9 8.7

Total 104 100

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Source: from the questionnaire

From the above table, internal control system and management information system

(MIS) as a preventive measure gave 23.1% of the total, auditing and investigation gave

19.2% job rotation gave 14.4%, management control system gave 11.5%, budgetary

control gave 13.5%, efficient supervision 9.6, and rules and regulations 8.7%

4.3 BAR CHART

AMOUNT INVOLVE IN FRAUD AND WASTAGES FROM YEAR 2003

Source: from sampled staffs

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4. 4. 0 TESTING OF HYPOTHESIS

Hypothesis 1

Ho: The level of fraud and wastages are not caused by inadequate control system.

H1: The level of fraud and wastages are caused by inadequate control system

The statistical tool of X2 distribution will be used in testing the hypothesis

X2 = ∑(O – E)2 E

Where: O = observed frequency

E = Expected frequency

Using the table below we test hypothesis 1

RESPONSES AGREED DISAGREED TOTAL

STAFF 94 1 95

MANAGEMENT 4 5 9

TOTAL 98 6 104

TO CALCULATE EXPECTED VALUES

∑1 = 95 × 98 = 89.52 104

∑2 = 95 × 6 = 5.48 104

∑3 = 9 × 98 = 8.48 104

∑4 = 9 × 6 = 0.52 104

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O (Observed) ∑(Expected) O - ∑ (O - ∑)2 (0 - ∑)2

∑

94

89.52 4.48 20.O7 0.22

1

5.48 -4.48 20.07 3.66

4

8.48 -4.48 20.07 2.37

5

0.52 4.48 20.07 38.6

44.85

Degree of frequency = (α = 1) (C – 1)

= (2 – 1) (2 – 1)

= 1

Test at (0.05) significant level

Tabular x2 = 3.841

Calculated x2 = 44.85

INTERPRETATION OF RESULT

From the working of the table above, X2 cal = 44.85 while X2 tab = 3.841

. . . X2 cal ≥ X2 tab

We then reject the null hypothesis and accept the alternative, that is, the level of

fraud and wastages are caused by improper management control system.

Hypothesis II

Ho: A great percentage of fraud and wastage in business organization are not

caused by societal factors

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H1: A greater percentage of fraud and wastage in business organization are caused

by societal factors.

Using the table below we test hypothesis II

RESPONSES AGREED DISAGREED TOTAL

STAFF 93 2 95

MANAGEMENT 7 2 9

TOTAL 100 6 104

TO CALCULATE EXPECTED VALUES

∑1 = 95 × 100 = 91.35 104

∑2 = 95 × 4 = 3.65 104

∑3 = 9 × 100 = 8.65 104

∑4 = 9 × 4 = 0.35 104 O (Observed) ∑(Expected) O - ∑ (O - ∑)2 (0 - ∑)2

∑

93

91.35 1.65 2.72 0.03

2

3.65 -1.65 2.72 0.75

7

8.65 -1.65 2.72 0.31

2

0.35 1.65 2.72 7.78

8.87

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Test at (0.05) significant level

Tabular x2 = 3.841

Calculated x2 = 8.87

INTERPRETATION OF RESULT

From the working of the table above, X2 cal = 8.87 while X2 tab = 3.841

. . . X2 cal ≥ X2 tab

We then reject the null hypothesis and accept the alternative, that is, a greater

percentage of fraud and wastages in business organization are caused by societal

factors.

Hypothesis III

Ho: Fraud and wastages cannot lead to the collapse of business at extreme cases.

H1: Fraud and wastages lead to the collapse of business at extreme cases.

Using the table below we test hypothesis III

RESPONSES AGREED DISAGREED TOTAL

STAFF 94 1 95

MANAGEMENT 4 5 9

TOTAL 98 6 104

TO CALCULATE EXPECTED VALUES

∑1 = 95 × 98 = 89.52 104

∑2 = 95 × 6 = 5.48 104

65

∑3 = 9 × 98 = 8.48 104

∑4 = 9 × 6 = 0.52 104 O (Observed) ∑(Expected) O - ∑ (O - ∑)2 (0 - ∑)2

∑

94

89.52 4.48 20.O7 0.22

1

5.48 -4.48 20.07 3.66

4

8.48 -4.48 20.07 2.37

5

0.52 4.48 20.07 38.6

44.85

Test at (0.05) significant level

Tabular x2 = 3.841

Calculated x2 = 44.85

INTERPRETATION OF RESULT

From the working of the table above, X2 cal = 44.85 while X2 tab = 3.841

. . . X2 cal ≥ X2 tab

We then reject the null hypothesis and accept the alternative, that is, a greater

percentage of fraud and wastages can lead to collapse of business at extreme cases.

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Hypothesis IV

Ho: Fraud and wastages cannot be prevented through the use of proper accounting

methods set aside for fraud and wastages detection.

H1: Fraud and wastages can be prevented through the proper use of accounting

methods set aside for fraud and wastages detection.

Using the table below we test hypothesis IV

RESPONSES AGREED DISAGREED TOTAL

STAFF 94 1 95

MANAGEMENT 2 7 9

TOTAL 96 8 104

TO CALCULATE EXPECTED VALUES

∑1 = 95 × 96 = 87.7 104

∑2 = 95 × 8 = 7.31 104

∑3 = 9 × 96 = 8.31 104

∑4 = 9 × 7 = 0.69 104

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O (Observed) ∑(Expected) O - ∑ (O - ∑)2 (0 - ∑)2

∑

94

87.7 6.3 39.69 0.45

1

7.31 -6.3 39.82 5.45

2

8.31 -6.3 39.82 4.79

7

0.69 6.3 39.82 57.7

68.39

Test at (0.05) significant level

Tabular x2 = 3.841

Calculated x2 = 68.39

INTERPRETATION OF RESULT

From the working of the table above, X2 cal = 68.39 while X2 tab = 3.841

. . . X2 cal ≥ X2 tab

We then reject the null hypothesis and accept the alternative, that is, fraud and

wastages can be prevented through the proper use of accounting methods set aside for

fraud and wastage detection.

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CHAPTER FIVE

FINDINGS, CONCLUSION AND RECOMMENDATIONS.

5.1 FINDINGS: -

From the analysis of the data collected from oral interview, articles and newspaper and

response on questionnaires distributed to sampled business organizations, I conclude

that there is slight increase in the incidence of fraud and wastages in business

organizations.

• From 2005, huge sum of money were lost by these organizations through fraud

and wastages.

• The year with the highest fraud and wastages was year 2008

• Inadequate control measures took the most significant causes of fraud and

wastages followed by deliberate intent and management ignorance.

• Another significant cause of fraud and wastages is lack of motivation and training

of staffs.

• Internal control system and introduction of management information system in an

organization ranked high in the preventive measure of fraud and wastages in an

organization

• Auditing and investigation, budgetary control, job rotation was ranked high as a

preventive measure to be adopted by business organizations.

From the four hypothesis tested, it was seen that improper management control system

causes fraud and wastages in business organizations. Secondly, a greater percentage

of fraud and wastages in business organization are caused by societal factors. Thirdly,

fraud and wastages can lead to the collapse of business. Finally fraud and wastages

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can be prevented through the proper use of accounting methods set aside by

management.

5.2 CONCLUSION

The business owner/manager has the responsibility to periodically review and evaluate

the system of internal control. In evaluating the propriety of the system of internal

control, one extremely useful technique involves trend analysis or the evaluation of

financial information over a several year period. Valuation information concerning

operations and internal control effectiveness can be obtained through this analysis

procedure. Using another example will highlight how trend analysis can be a valuable

tool in the evaluation of the internal control system.

The business owner/manager must take the initiative and responsibility for

learning and understanding the basic golas and reasons for establishing and

maintaining a proper and specific system of internal control, certainly, the business

owner/manager should consult and consider outside professional sources for advice,

experience and knowledge when developing and evaluating the internal control checks

and balances. The business owner/manager can obtain professional advice for

designing a proper system of controls and fraud prevention form a variety of sources.

There are countless high quality books and articles on this topic. Also there are many

professional and professional organizations available to assist in fraud prevention such

as certified public accountants, better business bureaus, consumer groups and white-

collar crime unit of a local police department.

70

Recently a world E –commerce fraud prevention network has been established.

There are many valuable fraud prevention and detection sources available to the

business owner/manager.

Fraud and wastages is not only experienced by business sector but also found in other

sectors of the economy.

Whatever affects the business industry directly or indirectly affects the economy at large

for the economy is part and parcel of the industry.

The effect of fraudulent practices affects business and nation as a whole both politically,

socially, economically and otherwise. This has ruined us both internationally and within.

Fraud and wastage had caused so many damages to the business sector. Some

experienced liquidation, complete closure of business, high staff turnover, increase in

operational cost and so on.

The regulatory authorities should try and strengthen their mechanism towards

fight against fraud and wastage in business sector because it has caused much

erosion’’ effect on the integrity of the country and business organizations should try as

much as possible to embrace the accounting principles set aside for the combat of fraud

and wastages for the effective discharge of their duties and furnishing them with

objective analysis, appraisal, recommendations and patient comments concerning the

activities of the organization.

5.3 RECOMMENDATION

It is often thought that only small businesses suffer from fraud because the

opportunities for fraud are greater in small businesses. This is absolutely not the case, it

is just that large business frauds are more difficult to detct, and when detected are less

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likely to be made public. All business organizations, regardless of form, size or nature

face internal and external risks and these risks must be managed. The evaluation and

monitoring of these risks should be an on going process. The system of internal control

is designed to provide reasonable assurance that assets are safeguarded, accounting

records are reliable and the compliance with laws and regulations.

There are no absolute guarantees or proof system. In addition, small business

owner/manager may have difficulty implementing many of the recommended principles

of internal control because of limited number of employees or because of related high

expenses.

The owner/manager needs to consider the type of errors and fraud that could

occur and then establish the appropriate preventive controls. The owner/manager can

detect inconsistencies through constant and careful supervision and monitoring of

operations. The owner/manager can identify breakdowns in internal control through

inquires, inspection, review and observation.

Internal control effectiveness depends on the trustworthiness, competence and

integrity of employees and their understanding of prescribed policies and procedures. A

motivated thief can render most preventive control procedures ineffective. Smaller

business operations can counter balance-limited resources and limited numbers of

employees by having a proactive and concerned owner/manager. In smaller setting the

owner/manager does not need a sophisticated system to recognize the propriety of

purchases, receipt of goods or proper billings for goods and services. If actively involved

and alert, the owner/manager should prevent or minimize the consequences of fraud,

wastage, and related crimes.

72

The business owner/manager should understand internal control systems could

be rendered ineffective because of fatigue, carelessness, distractions, indifference,

collusion and mistakes of judgment. It is imperative that the owner/manager realize the

appropriate cost justified system of control must be reviewed regularly for effectiveness

and appropriateness. The business owner/manager must be alert and aware of the

change and respond accordingly, In their decision process the owner/manager must

consider the internal control impact of downsizing, restructuring, outsourcing,

computerization and globalization. The owner/manager should realize that criminals are

becoming more sophisticated, social norms and constraints more relaxed and with the

use of the computer fraud and wastage can be invisibly implemented with electronic

sped.

Integrity of our business sector should be highly put into consideration. The

society norms on honesty and accountability are currently low.

A lot can be done by our business sector to curb the incidence of fraud and wastages.

• Firstly, business sector should understand the causes, methods and motivation

of fraud because the causes, method and motivation of fraud vary with time. It is

suggested that research on fraud and wastage should be carried out regularly (2

years) to help keep track of the development in the field. This will enable the

business sector to monitor the effectiveness of their internal control measures in

order to minimize fraudulent practices.

• Adequate organizational structure. A satisfactory organizational plan, which

includes sectionalization of operations, appointment of people to assume

responsibilities, specification of line of authority between organizational staff.

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• The management must evolve a sound employment policy to ensure that the

right caliber of staffs is employed into the organization. Reference of staffs

should be obtained both from their previous employers and other responsible

citizens where reputations are not indent.

• Management should put the right person at the right job. Right staffs should

handle their specific areas of specification to avoid creating lapses or loopholes

for fraud and wastages to be perpetuated.

• Adequate training and retraining of staffs should be carried out regularly. Such

training should emphasize their responsibilities and loyalty to their employees

since it has been uncovered that ignorance or incompetence sometimes lead

staffs to commit fraud. The personal department of an organization must not fail

to dismiss any defaulter involved in fraudulent practices because inadequate

prosecution of fraudster has made them to indulge in the crime and also

inadequate prosecution of fraudsters by law enforcement agency has made

business organizations to be reluctant in reporting fraud cases to the police.

• Adequate / proper job rotation. Allowing a staff to stay for long on a particular

position is an avenue for fraud and wastages to take place. Management should

employ a rotation system that each staff must take his/her annual leave as at

when due.

Finally, the best way to prevent or uncover these fraud and wastage problems is

through better education and greater awareness on the part of he owners, managers

and employees, of accounting controls and how to implement them. The owners and

managers must take the initiative to train them and direct their employees to recognize

74

symptoms of fraud and wastage and inappropriate actions and to ask the right

questions. Owner/managers must encourage and increase employees control

awareness. Employees are in the best position to recognize suspicions and improper

activities.

Owners/managers should establish policies and an environment that encourages

employees to recognize and report unusual conditions and events. Through its actions

and policies the owner/manager should encourage employees to fulfill their social and

employment responsibilities by communicating within a reasonable time period, to

appropriate levels of management, all issues of concern from quality control to proper

use of resources.

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BIBLIOGRAPHY

Aguolu, O., (2002). Fundamentals of Auditing. Enugu: Meridian Associates.

Adeyemi, A. A., (1993). Corporate Frauds in Nigeria. Lagos: FIIB

Association of Certified Fraud Examinators, (2001). Fraud Survey. Fraud information Newsletter, Volume 3, No 21.

Boynton, Johnson, and Kell, W., (2001). Modern Auditing. 7th Edition. London: Procters.

David, R., (1998). Auditing and Assurance Services. 5th Edition. South Western: University Press.

Donald, H. T., Gleze, G. W., and Kell, W., Auditing Integrated Concepts and Procedures. 7th Edition. South Western: University Press.

Hornby, A. S., (1998). Oxford Advanced Learners’ Dictionary. London: Oxford University Press.

Horace R. B.; Charles E. P.; and John E. P., (1990). Accounting Principles and Applications. 6th Edition. Manchester: Macmillan/McGraw Hill.

John J. H., (1996). ‘’How to spot fraud’’ Journal of Accountancy 43(3) 85-88.

Wells, J. T., (2001). ‘’Follow fraud to the likely Perp’’. The Journal of Accountancy, 191 (6) 19-24 March.

Osuala, E. C., (2005). Introduction to Research Methodology. Millennium Edition. Lagos: Cheston Books.

Elliot, R. K., and J. J., Willingham, (1980). Management fraud, Detection And Deterrence. New York: Petrocelli Books.

Koletar, J. W., (2003). Fraud Exposed. New Jersey: John Wiley & sons inc.

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International Federation of Accountant (IFAC), (1998). IFAC Handbook Technical Pronouncements. New York: International Federation of Accountants.

Silver G., (2008). Business Research Methods. New York: Oxford University Press.

Helm J., (2002). Auditors and their responsibility to fraud: The secured Lender. 58(5), 60-66 Sept/Oct.

Other online magazine

Fraud Encyclopadia Britannica retrieved August 20 2011 from Http: www.britannica.com/eb/article.

Interviews

Samagbeyi, T., (2011). Financial Accountant: Oral Interview. KPMG LLP Nigeria.

Alale A. ACA., (2011). Internal Auditor: Oral Interview. Drugfield Speciality Products Ltd.

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APPENDIX

QUESTIONNAIRE

Faculty of Business Administration,

University of Nigeria,

Enugu Campus.

23 May, 2011.

Dear Respondent,

This questionnaire, being presented for your completion is purely for academic research

purpose in partial fulfillment of the requirements for an award of MBA degree in

accounting of the University of Nigeria.

It is designed to gather information relating to ‘’management of fraud and wastages in

business organizations: implications for Internal Auditor’’ with your organization as one

of the case studies.

Thank you.

Yours Sincerely,

NNEKA ANGELA, EDEH.

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GUIDE FOR ANSWERING THE QUESTIONS

SECTION A PERSONAL DATA

INSTRUCTIONS:

A. Please tick which ever that applies to you. B. For open-ended question, please write your answer. I. SEX: Male Female

II. Name of organization III. The type of organization sector you belong IV. State your department/position in the organization V. Which category below do you belong to in your organization?

Junior Staff Senior Staff Management staff VI What is your highest academic/professional qualification SECTION B QUESTIONNAIRE

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80