Menu

Fraud is one of the numerous enemies of the business world today

February 15, 2019 0 Comment

Fraud is one of the numerous enemies of the business world today. It is in all works of life in government, the export trade, shipping transactions, banking, insurance and everywhere. Special organizations have been formed to combat it and Interpol deals with it at the international level but it has not and cannot be eradicated (JOYCE, 2013).
Fraud is a universal phenomenon which has been in existence for so long. Its magnitude cannot be known for sure because much of it is undiscovered or undetected and not all that is detected is published. It is known facts that no area of banking system is immune to fraudsters not even the security team designed to prevent it. Its management has become a central point in banking like the management of risk because of the above facts.
Fraud is a major challenge to the entire business world no company is immune to it and it is in all part of life. The banking public expects accountability, fairness, transparency and effective intermediation from banks. The banks are expected to ensure that they carry out their responsibilities with sincerity of purpose which is devoid of fraudulent practices. This is relevant if the banking sector is to gain public trust and goodwill (RAO, SUKANYA KUNDU & NAGARAJA, Jun 2014).
Fraud in the commercial banking industry before recapitalization efforts was at an alarming rate. It has caused many banks to loss and many investors and depositors funds were trapped in and indeed many banks are still suffering as a result of these fraudulent activities. Infact it has prevented many banks from achieving their goals and many businesses has gone into liquidation as a result. Honestly speaking it has become cankerworm that has eaten deep into the financial sector of the country’s economy and millions of money has been lost to fraudsters through these activities (JOYCE, 2013).
In the prevailing situation in Ethiopia following the fast expansion of the banking industry and adoption of new technologies the internal fraud practice is emerging and observed.Hence, it is these problems that have been necessitated the conduction of this research. Even though various researches were conducted in this topic in other countries, to the best of the researcher knowledge, the absence of such study exploring the general insight of such fraud related matters in Ethiopia inspired the researcher.