CHAPTER THREE

RESEARCH METHODOLOGY

3.0 Introduction

Research methodology defines what the activity of research is, how to proceed,’
measure progress and what constitutes success. It forms the framework which
specifies the type of information to be collected and the source of data and data
collection.

According to Baridam (2001), research methodology is operationally defined as an

activity of investigating the phenomenon experience which leads to new
knowledge, using methods of enquiring, which are currently accepted as adequate
by scholars in the field.

The various areas that were examined in this chapter are as follows:

 Research design
 Population of the study
 Sample technique
 Sample size determination
 Validity and Reliability of the Research Instrument
 Operational Measures of the Variables
 Data collection technique
 Data analysis technique
 3.1 Research Design

The research design is the method and plan used to collect data and test
relationship between the variable hypothesized (Baridam, 2001). In other words, it
has, been considered as a “blue print” for research, da1ing with at list four
problems: what question to study, what data are relevant, what data to collect and
how to analyze the result.

For the purpose of this study, a cross sectional survey design, a sub set of quasi
experimental research field survey of some selected insurance companies in Rivers
state.

3.2 Population of the Study

A population is the summation or totality of elements in a given location of

interest. According to Okafor (2002), research population is a complete set of
items, that is of interest to a researcher or investigator.

Basically the population of this work encompasses the top managers, HODs and
employees of this selected insurances companies in Nigeria. These insurance
companies and their branches were chosen because of their closeness to the
researchers location.

Name of Insurance companies Address Number of employees

Anchor insurance co. ltd 62 olu obasanjo way, 24

portharcourt, Rivers state.
Ark insurance brokers 20 Daniel kalio street, 16
D/line portharcourt,
Rivers state
Fin insurance c. ltd 180 Aba road 21
portharcourt, Rivers state
Great Nigeria insurance Plot 19 stadium road, Riz 23
 plaza, Rivers state

Industrial & General insurance 2 ikwerre road, 19

portharcourt, Rivers state.
(IGI) plc

Therefore the total population of the study is 103

3.3 Sampling Technique

Sampling technique arise as a. result of which type of sampling technique can be

used in carrying out our research, from the perspective of target population. At this
junction, simple random sampling is employed for this study: the reason is that it
will allow every members of the population to have an equal chance to the
selected. It will also allow the researcher to draw conclusions for the entire
population. Furthermore, if the sample is not a representative of the population,
conclusion can’t be drawn since the results that the researcher obtained from the
sample will be different from the target population.

3.4 Sample Size Determination

This research study is limited to selected insurance companies in River state, in

order to determine the sample size of this research work, the Taro Yamane’s
formu-la was used in determining the sample size with a significant level of 5%.

The formula is given as:

N
n = 1+ N ¿ ¿

where,

n = sample size soughed

e = level of significance = 0.05

N = population size

The sampling size is:

N
n = 1+ N ¿ ¿

103
n = 1+ ¿ ¿

103
n = 1+(103 x 0.0025)

103
n = 1+ 0.2575

103
n = 1.2575

n = 81

Therefore the sample size of the study is 81 which consist of managers, HODs and
employees

3.5 Methods of Data Collection

The research used two sources of data in carrying out this research namely: the
primary source and the secondary source.

The primary source includes:

 Questionnaires
 Personal observation
 Interview

The secondary source of data used in order to support findings includes textbooks,
journals, internet, newspapers etc.
3.6 Instrument for Data Collection

The instrument for data collection was a questionnaire. The questionnaire was
divided into two sections, A & B. Section A was used to gather demographic
information of the respondents, while section B was further divided into parts, 1,
2 ,3,4 & 5 Each sections was assigned a five response options of strongly agree
(SA), agree (A), Neutral (N), strongly disagreed (SD), and disagree (D) with a
corresponding value of 5,4, 3, 2 and 1.

3.7 Validation of the Instrument

To validate the instrument used, it was first presented to two experts in

measurement and evaluation unit who carried out face validation to check for
adequacy. After which it was later presented to one expert in Management for
content validity. Their comments and corrections were used to prepare the final
draft of the questionnaire used for data collection.

3.8 Reliability of the Instrument

To ascertain that the instrument was reliable, that is, able to consistently elicit the
same information from the respondents, the researcher adopted the test re-test
technique. 15 copies of the questionnaire were administered to 15 respondents not
participating in the study. The instrument was re-administered to the same
respondents within an interval of two weeks. The responses (results) of the first
and second tests were collated and subjected to a reliability test using the Pearson
Product Moment Correlation Analysis. The result obtained yielded a reliability
index of 0.8, using a cronbach alpha indicating high reliability of the research
instruments.

3.9 Operational Measures of the Variables

A variable is a measurable characteristic of a person, object, place or events.

According to Joe (2005), variables are conditions or characteristics that a
researcher observes, manipulates, control and measure in order to obtain relevant
data that will address his research question and research variables.

The major variables for the study are internal audit techniques measured by size of
the internal audit, qualification of the internal audit and quality of audit work.
While fraud management is measured by fraud prevention and fraud investigation.

3.10 Data Analysis Technique

The data obtained from a study may or may not be in numerical or quantitative
form, that is, in the form of numbers. If they are not in numerical form, then we
can still carry out qualitative analysis based on experience of the individual. On the
other hand, if they arc in numerical form, we start, by working out some
descriptive statistics to summarize the pattern of findings.

The data analysis techniques used in this study includes the Pearson correlation
method coefficient (rho) was used to test the stated hypotheses at a 95% (0.05)
level of significance. The rationale for this decision was due to the fact that the
researcher seeks to examine the relationship between internal audit techniques and
fraud management.

The r- Pearson correlation coefficient formula:

r= N∑ xy – (∑ x ¿( ∑ y )
[N∑x2 – (∑x)2][N∑y2 – (∑y)2]
Where
N = number of pairs of scores
∑ xy = Sum of the products of paired scores
∑ x = Sum of x scores
∑y = Sum of y scores
∑x2 = sum of squared x scores
∑y2 = sum of squared y scores
The statistical package for social sciences (SPSS) was also used in analyzing the
data.