Ican 2026 Advanced Audit Assurance And Forensics Question 2

During the routine supervisory visit of staff of Central Bank of Nigeria (CBN) to Ninalowo Microfinance Bank Limited, many internal control deficiencies, including the following, were discovered: i. not meeting capital adequacy and regulatory ratios; ii. non-deactivation of former employees from access to financial systems; iii. title documents to property, plant and equipment were not in the name of the company, but in name of certain directors; iv. non-retirement of staff advances; v. the same individual has been responsible for both the preparation and approval of vendor payments; vi. no rigid procedures around insider-related credits; vii. performance bonuses were paid to staff without structured procedures for allocation; and viii. procurement procedures were not followed. In addition to the above, the bank’s financial statements revealed consistent losses for the last five years. The Board of Directors of Ninalowo is concerned that the internal audit function may not be operating as intended.