CHAPTER ONE
1.1 INTRODUCTION
Banks are very important in nation; they are the backbone of the nation’s economy. Functions of the bank according to ezeji (1997), including money creation, acceptance of deposit from the customers, provision of facilities for domestic and foreign remittance, help government in implementing monetary policies etc.

According to Banerjee (2001) define an internal control system in whole system of control, financial and otherwise established by the government in order to carry on business of the enterprises in an orderly manner, ensure adherence to management policies safeguarding the assets and ensure as far as possible the completeness and accuracy of accounting records.
The function of internal control system include, the detection or safeguarding of business asset but despite the fact a that all bank have internal control system, there have been a lot of problem in the banking sector.

Ranging from bank liquidating to defrauding the banks, many bank have been liquidated example of such bank include savannah bank plc, national bank plc ( although it is now being resuscitated) merchant bank Nigeria limited Nigeria internal bank limited mention few
According to central bank of Nigeria (CBN) annual report over (N16 billion) sixteen billion naira was defrauded from the banking sector, also recently a bank was suspended from the clearing system by the central bank of Nigeria (CBN) because of mismanagement of banks resources expert have given reason as to what causes banks distress.

According to ezeudiji (1997) one of the causes of bank distress is the internal control system problems include poor or lack of proper authorization of loan and contract, poor loan recovery, failure to collect proper collateral security, management override the control e.t.c.
1.2 STATEMENT OF PROBLEMS
Internal control system many organization, including bank is very important because it ensure orderliness, in the organization, advance to management polices, early detection of error and fraud, protection of assets e.t.c.
Internal control system problem have led to closure of many banks in Nigeria, ezudiji (1997) thereby making depositors customer to shareholder of such bank to loss his or her shares.

It is inimical to nations economy because provide 90% of the capital employed in Nigeria.

Due to the following problem it leads to the following question.
Does bank operation carried out in any orderly manner and follow the procedure laid down. Does transaction recorded accurately and correctly.
1.3 RESEARCH QUESTION
This project has been able to provide answers to the following research questions.
1. What is internal system?
2. How does banks operations can be carried out in internal control system?
3. What are the functions of the internal control system?
4. What are the benefits of internal control system to the government, public, students and researchers?
5. Does transactions recorded accurately and correctly?
6. What cause banks distress?
7. What are the problems facing by internal control system?
8. What are the aims and objectives of internal control system to banks?
9. What is a bank and functions of a bank?
10. What is a fraud?
11. How to control fraud in banking sector
1.4 OBJECTIVES OF THE STUDY
The objectives of the study are:
I. To find out if there is internal control in union bank plc.
II. To investigate the effectiveness of internal control system in union bank plc.
III. To find out factors that affects internal control system in union bank plc.
IV. To suggest way to improve internal control system effectiveness in union bank plc.
1.5 RESEARCH HYPOTHESIS
Ho: The internal control system is not significantly effective on deposit money bank
H1: The internal control system is significantly effective on deposit money bank.
1.6 SIGNIFICANCE /JUSTIFICATION OF THE STUDY
The study is very importance nowadays were federal government have hard to invest of in Nigeria.

Since foreign investor will not invest in any country where there is no good banking sector.

The study will be of immense benefit to banks determine the extent to which internal control system is effective.

In addition the study would determine the factor problem militating against the to it.

The study will be of immense help because most of the founds requires by Nigerian are provided by bank also that affect banking sector also affect many others sectors such as agriculture and economy sector of the nations.