Firm characteristics and fraud detection in the Nigerian first banks using Beneish model

It has described the connection amidst firm characteristics and Deposit Money Banks fraud detection in First Bank Plc through the use of Beneish model approach. Fraudsters keep developing new strategies of taking advantage of the gaps in the current detection mechanisms, and it is difficult to keep pace with new risks that DMBs face. The financial system is so intertwined that any fraudulent activity that takes place at First Bank may spread to the rest of the banking firm and the whole economy. Objectives of this study included the investigation of the association between firm size and fraud detection in first bank, the investigation of the association between financial performance and fraud detection in first bank as well as to determine the association between financial structure and fraud detection in first bank. The annual financial statement of the Nigerian First Bank Plc was used as the source of data. The result indicated that correlation coefficient has a strong positive relationship and insignificant among the group of independent variables (loan-to- asset ratio, and returns-on- assets, total-assets, equity ratio, total deposits, debt-to-equity ratio, total loans, and returns on equity) and the dependent variable (Fraud Detection). This research suggests that Nigerian First Bank Plc needs to improve its internal control processes, especially in bigger companies where the fraud may be so hidden by the complexity of the operations. To facilitate the detection of fraud, the bank needs to come up with more advanced financial performance monitoring systems. An optimized financial structure deserves to be kept with balanced leverage and equity ratios as it is more likely to lower the exposure to fraudulent activities.