Banks, SDIs directed to ensure independence of internal audit functions to reduce fraud

Banks and Specialized Deposit-Taking Institutions (SDIs) have been directed by the Bank of Ghana (BoG) to continuously train their staff to help identify and fight fraud. 

This comes after the year 2022 recorded 2998 cases of attempted fraud cases for the banking and SDIs sectors, as compared to 2347 cases in 2021, representing a 27.74% increase.

The Fraud Report, published by the Bank of Ghana (BoG) indicated that a total loss value recorded in 2022 stood at approximately GH¢56million as compared to approximately GH¢61million in 2021.

This shows a 7.88% decrease from 2021.

The major drivers (top five) fraud typologies that impacted most of the institutions in the sector included forgery and manipulation of documents, fraudulent withdrawals, cheque fraud, cyber/email and cash theft (cash suppression), the report said.

Forgery and manipulation of documents emerged as the prominent fraud typology. This type of fraud recorded the highest loss of GH¢33million.

Another fraud typology that was also on the increase is fraudulent withdrawal. This typology involved money fraudulently withdrawn from customers’ account resulting in losses totalling GH¢7million. Most of the cases recorded in this fraud type had the involvement of staff of banks and SDIs. Cheque fraud also accounted for a loss value of GH¢5million. The most common modus operandi in cheque fraud was cloned cheques.

The reported said that “Banks and SDIs are directed to ensure the independence of the internal audit functions to provide independent assurance to the Board on the effectiveness of the risk management, internal controls and corporate governance structures of the institutions.

“Banks and SDIs are directed to strengthen their ethical codes of conduct by improving the tone at the top and ensuring compliance with the requirements of the ethical values of the institutions.”