Page 1 of 25

European Journal of Business &

Social Sciences

Available at https://ejbss.org/

ISSN: 2235-767X

Volume 07 Issue 05

May 2019

Available online: https://ejbss.org/ P a g e | 381

Forensic Accounting and Fraud Management: Evidence from Nigeria

ANIEFOR SUNDAY JONES

Lecturer, Department of Accountancy,

Delta State Polytechnic Ozoro,

Delta State. Nigeria

&

ONATUYEH, EDWIN A.

Lecturer, Department of Accountancy,

Delta State Polytechnic Ozoro,

Delta State. Nigeria

ABSTRACT

With an upsurge in financial fraud in the global economy, forensic accounting has

become an emerging topic of great importance for academic, research and industries.

The main objective of the study is to examine forensic accounting and fraud

management in Nigeria. Specifically, the study examined if there is a significant

relationship amongst stakeholders on the effectiveness of forensic accounting in

financial fraud control reporting and internal control quality. The survey design was used

in the study. The requisite data for this data were extracted from the questionnaire

administered to a sample size of 50 respondents consisting of accountants in the public

sector, management staff in selected industries, practicing auditors and shareholders.

The simple random technique was utilized in selecting the sample size. Tables,

percentage and the Chi-square were used in the analysis of the data collected from the

respondents. Other data were collected from books, journals and websites. The

Conbach’s alpha was used to test the reliability of the instrument and a value of 0.535

was derived. The result revealed that there is a significant relationship between fraud

and forensic accounting. We recommend among others that the professional

accountancy bodies and the National Universities Commission should encourage

formalization and specialization in the field of forensic accounting. In addition, the

government should stimulate interest in forensic accounting for monitoring and

investigation of suspected corruption cases by prosecuting offenders.

Key Words: Forensic accounting, financial fraud, stakeholders, fraud

management.

Page 2 of 25

European Journal of Business &

Social Sciences

Available at https://ejbss.org/

ISSN: 2235-767X

Volume 07 Issue 05

May 2019

Available online: https://ejbss.org/ P a g e | 382

1.0 Introduction

Background of the Study

The developing interest for forensic accounting has become imperative for most organizations in

the world over as a result of celebrated cases of fraud in recent times. Forensic accounting

emerged as a result of the failure for the normal audit to reveal monumental fraud. Forensic

accounting is very new in Nigeria as organizations have realized that fraud can be controlled by

administration of a forensic accounting system as revealed from examples from developed

nations.. Forensic accounting is the use of money related aptitudes and insightful attitude to

disrupted issues, directed inside the setting of the standards of proof (Arokiasamy and Cristal,

2009).

Bologna and Lindquistn (1987) affirm that forensic accounting as a control incorporates fraud

learning, money related ability, and a sound information and comprehension of business reality

and the working of the legitimate framework. Forensic accounting might be a standout amongst

the best and productive approach to diminish and checkmate accounting fraud. By and large,

forensic accounting is gaining popularity around the world. It is being studied as a full-fledged

course in various schools across the globe.. Williams (2002) states that forensic accounting is

perceived as having a specific type of professional aptitude and blessed with recognizable traits

among which are sanity, lack of bias, and freedom. Forensic accountants have a specific social

acknowledgment, perception that is basic to the interpretation of monetary issues into

representative showcases of trust. The basic social esteem that forensic accountants have is the

representative limit by which the interpretation is figured out. Forensic accounting gives social

intercession to financial and political rationales (Williams, 2002). It is the setting inside which

the social intervention of legitimate and monetary cases is practiced. The principal decade of the

twenty-first century encountered a wave! or on the other hand blizzardll in the quantity of

corporate outrages, frauds, and disappointments (Ball, 2009). These occasions hastened and

added to the Great Recession and essentially affected the effective working of free market

private enterprise. Some of which were really encouraged by open bookkeepers (cf. Enron and

Page 3 of 25

European Journal of Business &

Social Sciences

Available at https://ejbss.org/

ISSN: 2235-767X

Volume 07 Issue 05

May 2019

Available online: https://ejbss.org/ P a g e | 383

Arthur Andersen). The embarrassments, frauds, and disappointments have added to the loss of

certainty by the budget reports clients in the capacity of open accounting to contribute feasible

answers for the money related issues, and have fuelled the development sought after for forensic

bookkeepers (Huber, 2012).

Be that as it may, substantial organization, for example, Cadbury Nig Plc, Oceanic Bank, Plc

which now called Eco Bank and Afrik Bank, which is now called main street Bank plc. had

been discovered associated with fraud. This is on the grounds that it is constantly feasible for

abnormal state management to get to information and change the data, paper-based framework or

an automated framework alike. Everything relates back to human instinct and abnormal state

management. The conceivable method to unravel this issue is that the open ought to be instructed

and be educated of the utilization and capacity of forensic accounting to counteract fraud events.

At the point when the open is made known about the idea, at that point they could really interest

for the administration in the organization which they put resources into.

Statement of Problem

Accounting generally provides financial stewardship by showcasing the financial status of an

entity, be it private or public sector, but because of fraudulent activities, there is a lacuna in this

fiduciary role .Auditing as it were, is to show whether proper books of accounts have been

properly kept. Auditing does not by virtue of its primary function, investigate fraud except when

it becomes necessary. This has created an expectation gap in the eyes of the users of the

information.

Again, in this information age, fraud has taken a dramatic change in the area of cybercrimes and

in the future, it is likely that the future may bring even more challenges.

As a result of this supposed audit failure and ICT related fraud activities, there has been a

continuous search for fraud control by the accountancy profession. It is this search that has given

birth to forensic accounting.

Therefore, it is against this backdrop that this study being embarked upon to investigate whether

forensic accounting has any influence in fraud control.

Objectives of the study