Alertness to Red Flags and fraud detection in Micro finance banks in Awka Metropolis

Abstract

This study evaluates the effect of red flags on fraud detection in Micro finance banks in Awka Metropolis. Hypotheses were raised to determine the significance of the effect.  Red flags were measured using: Structural red flags, Personnel red flags financial red flags and internal control/operational red flags. The study adopted a descriptive as well as survey research design. A well-structured self-administered questionnaire was used as the main tool for data collection and was administered  to  180 respondents  out  of  which  165  were  retrieved  and  appropriately  filled. Reliability of the research instrument was calculated and the Cronbach’s alpha coefficient was 0.76.  Data were analyzed using multiple regression analysis. Preliminary analysis such as descriptive statistics and correlation analysis were also conducted to ascertain the normality and check for the presence of multi-colinearity among the variables used. From the hypotheses tested, the results indicated that structural red flag, financial red flag and internal control/operational red flag characteristics have positive and significant effect on fraud detection in Micro Finance Banks in Awka Metropolis. While Personnel red flag characteristics have statistical inverse effect on fraud detection. The study recommended among others that a whistle blower equivalent should be established to provide secrete information on any shady dealings or any false records in the accounts.

Citation: Nonye  Stella Agubata (2021)  Alertness to Red Flags and Fraud Detection in Micro Finance Banks in Awka Metropolis, European Journal of Accounting, Auditing and Finance Research, Vol.9, No. 9, pp.41-54

Keywords: Fraud, red flags and fraud detection

Article Review Status: Published

Pages: 41-54 (Download PDF)

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