UTILIZATION OF AUTOMATED INTERNAL CONTROL SYSTEM FOR EFFECTIVE FRAUD PREVENTION IN SMALL AND MEDIUM SCALE ENTERPRISES IN ANAMBRA STATE

Abstract

This study determined the utilization of automated internal control system for effective fraud prevention in small and medium scale enterprises in Anambra State. Two research questions guided the study. Two null hypotheses were tested at .05 level of significance. Descriptive survey research design was adopted for the study. This study was carried out in Anambra State which is one of five states in the south east zone of Nigeria. The population of the study comprised 2,837 SME managers of enterprises in Anambra State who are registered with the State Ministry of Commerce, Industry and Technology. The sample size of 351 SME managers was used for the study. The sample size was derived using the Taro Yamani formula. A structured questionnaire was used for data collection. The face validity of the instrument was established using the opinions of three experts. The application of Cronbach Alpha reliability method on the two clusters of the instrument yielded coefficient values of 0.85 and 0.81 for clusters B1 and B2 respectively. An overall reliability co-efficient value of 0.83 was obtained. From the findings of the study, it was revealed that managers of SMEs in Anambra State utilized accounting control automation to a moderate level and internal audit automation to a low level for effective prevention of fraud. The study further revealed that there is no significant difference in the mean ratings of managers on the level of utilization of accounting control automation and internal audit automation for effective fraud prevention in SMEs in Anambra State. Based on the findings, it was recommended among others that managers of small and medium scale enterprises should be trained in the area of automation in accounting that will empower them to adequately utilize different internal control systems for smooth running of the enterprises.