Comptabilité et marketing

The Role of Internal Control System in Mitigating Embezzlement and Payroll Fraud in Small and Medium Enterprises (SMES) in Obio/Akpor Local Government Area of Rivers State

Abstract

Edori Daniel Simeon and Ogaluzor Odinakachukwu Ifeanyichukwu

Fraud and fraudulent activities has affected many privately and publicly owned entities and in most causes the effect is felt more by the SMEs. So, this study attempted to investigate the role of internal control system in mitigating embezzlement and payroll fraud in SMEs. Four departments in ten different SMEs in Obio/Akpor Local Government Area of Rivers State, Nigeria were selected and structured questionnaires were distributed. Six null hypotheses were formulated and tested using regression at 5% level of significance using SPSS. Based on the regression analysis results all the six null hypotheses were rejected and the alternative hypotheses of significant relationship were accepted. The study also revealed that increase in segregation of duty; internal check and proper procedure for authorization will cause a reduction in embezzlement and payroll fraud in SMEs. We then recommended that internal control system should be installed and strengthened in all SMEs.