Bank Statement Reconciliation in the Nigerian Private Sector: Implications of Non- Adherence to Procedures

Abstract

This research investigated the business attitude of Nigerian private sector businesses towards formal preparation of bank reconciliation in the course of their business operations. The specific objectives of the research included investigations as to whether businesses keep formal and standardized accounts, also whether they employ services of internal and external auditors and the impact of losses resulting from not conducting periodic bank reconciliation. The methodology uses involved data collection through questionnaires and interviews and analyzed statistically using SPSS statistical package. It was evident that most businesses did not embark on periodic bank reconciliation hence lost a lot of money to fraud and professional negligence. For the few who actually did reconcile bank statements many outsourced the bank reconciliation duties to consultants and even then many businesses where only compelled to embark on bank reconciliation to make their businesses eligible to benefit from bank loans or attract investments and contracts. The conclusions of this study includes that many small businesses are reluctant to incur costs of hiring qualified accountants and services of auditors hence the dearth in the practical applications to bank reconciliation procedure in many businesses. Secondly, Nigerian businesses have lost billion?s to fraud and professional negligence. Policy recommendations include emphasis on teaching and training of students and accounting personnel on theoretical and practical aspects of book keeping, financial reporting and bank reconciliation. Secondly, businesses should employ qualified accountants and auditors for enhanced quality of internal control.

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