FRAUD AND CORRUPTION: THE ROLE OF INTERNAL CONTROLS AND ACCOUNTANTS IN GHANA'S PUBLIC SECTOR

Studies have shown that fraud has long been a part of our society and will continue to be. In recent times, corporate fraud results in shareholder lawsuits, the implosion of companies, executive prison sentences, and an... [ view full abstract ]

Studies have shown that fraud has long been a part of our society and will continue to be. In recent times, corporate fraud results in shareholder lawsuits, the implosion of companies, executive prison sentences, and an investor outcry for reform. This outcry has led to increased focus on internal controls within corporate organisations. This shift in attention can be attributed to globalisation of world economies, technological advancements, complex nature of business activities, the allegations of fraudulent financial reporting and corruption. Some of the major corporate failures were as a result of weak or the neglect of internal control policies of these organisations, notable among them are the case of Enron and WorldCom. The Treadway Commission report in 1987 revealed that, the absence and/or weak internal control systems are the cause of many fraudulent financial reporting. Accountants have the responsibility of ensuring proper financial records which are easily accessible with its accompanying documentations. In line with the above the objectives of the study included understanding the role of the internal controls and accountants in fighting fraud and corruption. Also, to ascertain the effect these roles play to the fight of fraud and corruption. The study adopted qualitative approach to research where respondents were sampled from government institutions in Ghana. All the respondents were accountants and auditors with more than five years of experience within the accounting field. The respondents were interviewed to ascertain the roles played by the accountants in fighting fraud and corruption in their various institutions or organisations. It was also found that in almost all the institutions although controls exist, these controls appears not to be adequate to meet the operational needs or demands of the organisation. The study also found that non-compliance to established systems of control are reinforced by the absence of adequate punitive measures for non-compliance. The study found that to a  large  extent  management  monitors  the  activities  of workers  in  an  attempt  to  ensure  that  rules  and  procedure  are  adhered  to. Also, accountants’ role within these institutions helps to reduce fraud and corruption. It is important to note that although the accountants play crucial role in fighting fraud and corruption, it was revealed that there are instances where some accountants were actually involved in series of fraud and corruption. In conclusion, it is therefore not surprising that today's anti-corruption groups often see accounting and accountants as obvious parts of the reform activity, and as more or less inevitably helping to produce better governance in the public sector. It is recommended that there should be institution of regular workshops, seminars and educative programmes for not only senior staff but also junior staff aimed at increasing their level of awareness of  internal  controls  to  impact  positively  on  the  achievement  of  organizational goals.  Also, the accountancy regulatory body should be strict on revoking licenses of practising accountants to serve as a deterrent to others who intend to perpetuate fraud and corruption. Also, the attorney general should be interested in prosecuting such personalities on time.