Risk Management and Accounting Information System Control Mechanisms and Fraud Prevention in Microfinance Banks in Akwa Ibom State

Abstract

This study determines the extent to which risk management and
accounting information systems predict the prevention of fraud
in microfinance banks in Akwa Ibom State. Two specific
objectives were raised, with the corresponding research
questions, and two null hypotheses were formulated and tested
at the .05 level of significance. The study adopted a descriptive
survey research design. The population of the study comprised
151 accountants and internal auditors working in microfinance
banks in Akwa Ibom State. All 151 respondents participated in
the study using a census approach. A research instrument
entitled “Internal Control Mechanisms and Fraud Prevention
in Microfinance Banks Questionnaire (ICMFPMBQ) was used
for data collection. The instrument was face-validated by three
experts. The Cronbach alpha statistical analysis was used to
calculate the reliability of the instrument, and a correlation
coefficient of 0.87 was obtained, which showed the instrument
was reliable. Out of 151 copies of the questionnaire distributed,
147 were retrieved successfully, while 5 copies were not
retrieved, representing a 97 percent rate of return. Data was
analyzed using simple linear regression analysis for answering
both research questions and testing research hypotheses. The
findings from data analysis showed that there is a great extent to
which risk management and accounting information systems
predict fraud prevention. The study also revealed that risk
management and accounting information systems significantly
predict the prevention of fraud in microfinance banks in Akwa
Ibom State. Based on the findings of the study, it is
recommended, among others, that management of microfinance banks should endeavour to develop and implement controls and
other measures that are capable of mitigating the risk of
fraudulent activities in business organizations.