THE CAUSES AND EVENTS OF FRAUD IN THE NATIONAL INSURANCE CORPORATION OF NIGERIA
1.1 BACKGROUND OF THE STUDY
It is no exaggeration to conclude that the worst enemies of our society id the present time are fraudsters forgenis errors and other financial irregularities. In all their aspects frauds forgeries errors corruption and there fraudulent practices which are the product of dishonesty, greed, deception distortion and alteration are today pervasive failure of Nigeria insurance company in particular.
Fraud causes huge financial losses to the Nigerian insurance company and their customers. The lapses to the internal control system in most organizations is as a result of the existence of poor control environment which could in extreme causes leac to the closure of some parastatals and organization is some part of the words.
Fraud and error have been identified as one of the most destructive factors that could easily lend to failure in insurance corporation. It’s influence has been primarily attributed to work or valuable internal control system. In recent times, the dimensions and scope of fraud have become so complex and rampant especially with the advancement in information technology.
Nevertheless, the object of this research work is to suggest sufficient control that can be employed by the insurance sector to regulate the aid of fraud and forgery on the profitability of financial institution in respect of National Insurance Corporation of Nigeria.
1.2 STATEMENT OF THE STUDY
Fraud, forgery, error and other financial irregularities are financial cankerioors, which are eating deep into the publics or financial institutions.
Can one exclude the eril of frauds, forgeries and error from the factors responsible for the decadence and distress in Nigerian Insurance Company?
Are fraud and forgery not the factors responsible for the lost of confidence in Nigeria Insurance Company.
The issue of frauds and forgeries effect many interests in the insurance company. Depositors anticipate maximum liquidity and highest compensation in the capital invested as premium.
1.3 JUSTIFICATION OF THE STUDY
This research work provides adequate prevention controls to checkmate the impact of fraud and forgery on the profitability of national insurance corporations of Nigeria. In the same view, this research exercise is based not specifically in the diligent research of the researchers who have worked in the same held on frauds in national insurance corporation of Nigeria but to venture into some areas that are yet to be completely expired by the formers, such as benefits to be derived from National Insurance Corporation of Nigeria.
However, a substantial reduction in these obnoxious activities will aid and promote economic growth development, guarantee stability and conducive investment climate. It is important to note that, investment is built on mutual trust and understanding. And that is why, it is important to put adequate measure in place to control frauds, forgeries, errors in the economy which will encourage the desire investment capital in flow into the economy through the creation of goodwill, mutual trust and confidence necessary for a stable and sustainable investment climate.
1.4 OBJECTIVES OF THE STUDY
The general objectives of the study is to suggest the measures to create and maintain a fraud fire atmosphere the insurance sectors request so as to inculate in local and foreign investors interest towards injecting financial resources into the alling economy.
In view of this, the specific objectives are:
i. To develop a framework for the management in their responsibility for the prevention and detection of fraud through implementation and continous operations of adequate system of internal control system.
ii. To examine various types of fraud and forgery and the effects of these two vices on the profitability of National insurance corporation of Nigeria.
iii. To examine and highlight various consequences and dangers associated with fraud, error and other irregularities and National Insurance Corporation of Nigeria. Finally, the study made recommendations and conclusion on based on the analysis of data obtained in the course of the research study.
1.5 STATEMENT OF HYPOTHESIS
For the purpose of this research work, the following hypotheses test. These are stated below:
Ho: There is no significant relationship between frauds and forgeries on the profitability of national insurance corporation of Nigeria
Hi: There is significant relationship between frauds and forgeries on the profitability of national insurance corporation of Nigeria.
1.6 SCOPE OF THE STUDY
This inquiry strictly on the following: The causes and event of fraud in National Insurance Corporation of Nigeria.
The nature and types of frauds in Nigerian Insurance Company, The study attempt to look at the implication of frauds on the national insurance corporation of Nigeria and their customers and try to provide solution to cubs this neferrous activities.
1.7 LIMITATION OF THE STUDY
The limitation of this study were associated with survey research methodology and the project also limits itself to the impact of fraud and forgery on the profitability of financial institution. It would be very unrealistic to assume that all necessary fact have been gathered in the process of this study.
2.0 LITERATURE REVIEW
2.1 FRAUD IN NIGERIA FINANCIAL INSTITUTION
The word “fraud” has been variously defined in many literatures by scholars and financial expects. It is defined in the followings ways by different financial experts.
Francis (2000) defines frauds as an act of dishonest deceit, falsifications and manipulation perpetuated to gain undue monetary and Non-monetary benefits. He went further to say that fraudulent practices include frauds and all other illegal means of acquiring possessing of asset to the disadvantages of another person.
Fagbemi (2001) defines fraud as an act of dishonesty depriving of person of something which is of something to which is entitled to through deceitful means on conducts inferentially; fraud is an act of deception deliberately practice to gain unlawful advantages.
International Auditing Guidelines (IAG) is described the team fraud as the international mis-representation of financial statements by one or more individuals among management employee on fraud parties.
2.2 MEANING OF FRAUD
Fraud has been defined by many scholars in their various works
Hormby and Benment (1996) defined fraud as criminal deception and as well as all acts that involves dishonesty on deceitful one object that involve dishonesty appropriation of assets belonging to another person.
Yekini (1999) classified fraud together with white colour crime and this defines the term fraud as illegal acts characterized by gutt deceit and cannot depend upon the application of physical force on violence or threat thereof.
2.3 CAUSES AND EXTENT OF FRAUD
In order to propose remedies for eliminating fraud in Nigeria insurance corporation, it is important to identify the most common causes of fraud in National Insurance corporation of Nigeria. This is necessary in order to put insurance company in the alert as they are prone to fraud.
The major causes of frauds are usually grouped into the following group.
A Institution Factors
B Environment Social Factors
The institutional are those traceable to the internal environment of the corporation while the social factor are those which result from the influence on the society on the insurance industry..