– Application of Forensic Accounting Skills and Detection of Financial Crimes in Nigeria –
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ABSTRACT
The study examined the application of and prevention in quoted manufacturing firms in and equally determine whether forensic accounting skills aid the detection of financial crimes. The study sample was made up of four (4) manufacturing selected firms in Awka.
Structured questionnaire designed by researchers was used to collect data from accounting /finance, top chief executives, and management personnel in each firms respectively in Awka, totaling forty- two (42) respondents.
The Statistical Package for Social Sciences (SPSS) version 23 was used to analyze the data collected.
The result revealed Forensic accounting skills has significant effect on the activities of manufacturing firms in Nigeria.
Also the application of aid the detection of financial crimes in manufacturing firms in Nigeria then the application of forensic accounting skills strengthen corporate governance of manufacturing firms in Nigeria.
TABLE OF CONTENT
Declaration i
Certification ii
Dedication iii
Acknowledgement iv
Abstract v
CHAPTER ONE: INTRODUCTION
1.1 Background of the study 1
1.2 Statement of the problem 3
1.3 Objectives of the study 4
1.4 Research questions 5
1.5 Research hypotheses 5
1.6 Significance of the study 6
1.7 Scope of the study 7
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1 Conceptual framework 8
2.1.1 Concept of forensic accounting 8
2.1.2 Forensic accounting skills 10
2.1.3 Relevance of forensic accounting skills in detecting financial crimes 12
2.1.4 Differences between forensic accountant and traditional accountant 17
2.1.5 Challenges of forensic accounting application in Nigeria 19
2.1.6 The nature of forensic accounting assignments 20
2.2 Theoretical framework 22
2.2.1 Fraud triangle theory 22
2.3 Empirical studies 26
2.4 Summary of literature review 29
CHAPTER THREE: RESEARCH METHODOLOGY
3.0 Introduction 31
3.1 Research design 31
3.2 Area of the study 31
3.3 Population of the study 32
3.4 Sample size of the study 32
3.5 Source of data 33
3.6 Instrument of data collection 33
3.7 Validity of instrument 34
3.8 Reliability of instrument 34
3.9 Method of data analysis 35
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.1 Introduction 36
4.2 Descriptive statistics 37
4.3 Test of hypotheses 38
4.3.1 Test of hypothesis one 38
4.3.2 Test of hypothesis two 39
4.3.3 Test of hypothesis three 41
4.4 Discussion of findings 43
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1 Summary of findings 45
5.2 Conclusion 45
5.3 Contribution of knowledge 46
5.4 Recommendations 46
REFERENCES
APPENDIX
INTRODUCTION
Background of the Study
The first decade of the twenty-first century experienced a tsunami or blizzard in the number of reported corporate scandals, frauds, and failures (Ball, 2009).
According to Oseni (2017) the nature of such fraud rendered traditional auditing and investigation inefficient and ineffective in fraud detection and prevention.
Statutory audit appears to have shown a lack of concern and reflective attitude towards fraud fighting, thereby failing to offer the public desirable assurance to handle corruption and fraud (Akhidime & Ugbale-Ekatah, 2014).
The scandals contributed to loss of confidence by financial statements users on the ability of traditional auditing and investigation to contribute viable solutions (Huber, 2012).
Fraud includes all the multifarious means human ingenuity can devise, that are resorted to by individuals to get an advantage over another by false suggestions or suppression of the truth.
It includes surprises, tricks, cunning or dissembling, and any unfair way by which another is cheated (Black’s Law Dictionary, 2016).
According to Mukoro, Yamusa, and Faboyede (2013) the first and most sophisticated way of carrying out the fraudulent activities in many organizations is through the accounting and financial records, as witnessed in the cases of Enron, WorldCom, Global Crossing, Tyco, Cadbury Nig. Plc., Oceanic Bank Plc., Afri Bank, among others.
Thus, the need to counter, stop and prevent the perpetration of frauds in modern organization led to the development of forensic accounting (Mazunder, 2011).
One of the modern approaches that can be used from the prevention to detection is called forensic accounting. It touches almost all disciplines especially, accounting, auditing, investigation, law and psychology (Enofe, Agbonkpolor & Edebiri, 2015).
is that branch of accounting that deals with recovering , money laundering and other related corrupt practices that may occur in an organization. Forensic accounting utilizes accounting, auditing and investigative skills (Zysman, 2004).
The phase ‘Forensic Accounting’ was first coined by Peloubet in 1946. Peloubet was the first man to publish in his book the phase ‘Forensic Accounting’.
The first form of forensic accounting can be traced to an 1817 court decision. Joshi (2003) traced the history of forensic accounting to Kutilya, the first economist to openly recognize the need for the forensic accountants.
Globally, the in corporate organisations is becoming rampant and this can be shown in the large number of reported cases of bribery, corruption, embezzlement, money laundering, racketeering, fraudulent financial reporting, tax evasion, forgery and other means through which both financial and economic dishonesty are being perpetrated (Ofiafoh & Otalor, 2013).
Onodi, Okafor, and Onyali (2015) posit that forensic investigative skills are required to uncover and establish the occurrence of financial crimes.
Forensic accounting helped determine that many of Enron’s recorded assets and profits were inflated, and in some cases, completely fraudulent and nonexistent.
REFERENCES
Adeniyi, A.A. (2016). Forensic auditing and financial fraud in Nigerian deposit money banks (DMBs). European Journal of Accounting, Auditing and Finance Research, 4(8), 1-19.
Coppolla, D.R. (2006). Demystifying financial fraud: Forensic accountants gain in popularity. Alaska Business Monthly, 22(5), 79.
Crumbley, D.L. (2005).Qualifying as an expert witness. In Walter J. Pagano and Thomas A. Buckhoff, eds., Expert Witnessing in Forensic Accounting, Philadelphia: Edwards.
Dada, S.O., Owolabi, S.A., & Okwu, A. (2013). Forensic accounting a panacea to alleviation of fraudulent practices in Nigeria. International Journal of Business Management and Economic Research, 4(5), 787-792.
Dhar, P., & Sarkar, A. (2010). Forensic accounting: An accountant’s vision. Vidyasagar University J. Commerce, 15(3), 93-104.
DiGabriele, J.A. (2009). Fishbowl the Forensic Accountant: A Closer Look at the Skills Forensic Accounting Education Should Emphasize. The Forensic Examiner, 18(2), 77-79.
Hopwood, W.S., Leiner, J.J., & Young, G.R. (2008). Forensic Accounting. New York: McGraw-Hill/Irwin.
Nwaze, C. (2012). Due process and accountability: Advance fee fraud. Zenith Economic Quarterly, 8(2), 24-28.