Page 1 of 11
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
ISSN: 2395-0463
Volume 04 Issue 05
April 2018
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 179
Fraud Management and Forensic Accounting Issues, Problems and Prospects.
Ipigansi Pretoria
mounpretoria@yahoo.com
Department of Banking, Finance and Insurance,
Niger Delta University, Wilberforce Isiland Bayelsa State
Dr Ezeamama Martin C.
ezeamamamartin@gmail.com
Department of Banking and Finance
Enugu State University of Science and Technology ESUT, Enugu
Orji Stephen Anayo
stevennorj2020@gmail.com
Department of Banking and Finance
Enugu State University of Science and Technology ESUT, Enugu
ABSTRACT
With an upsurge in financial accounting fraud in the global economy, forensic
accounting has become an emerging topic of great importance for academic,
research and industries. The objective of the study is to examine forensic
accounting and fraud management in Nigeria. Specifically, the study examined
if there is significant agreement amongst stakeholders on the effectiveness of
forensic accounting in financial fraud control, financial reporting and internal
control quality. The survey design was used in the study with a sample size of
50 consisting of accountants, management staffs, practicing auditors and
shareholders. The simple random technique was utilized in selecting the sample
size; Tables and percentage were used in the analysis of the data collected from
the respondents. The statistical tool used for testing of hypothesis one and two is
the Chi-Square (X2
) method.. The findings of the study indicate that there is
significant agreement amongst stakeholders on the effectiveness of forensic
accounting in fraud management, financial reporting and internal control quality
.In line with the above findings, we recommend that the Institute of Chartered
Page 2 of 11
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
ISSN: 2395-0463
Volume 04 Issue 05
April 2018
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 180
Accountants of Nigeria, Association of National Accountants of Nigeria and the
National Universities Commission should encourage formalization and
specialization in the field forensic accounting. In addition, the government
should stimulate interest in forensic accounting for monitoring and investigation
of suspected corruption cases.
Key Words: Forensic accounting, financial fraud, stakeholders, chartered
accountants.
INTRODUCTION
The widespread frauds in modern organizations have made traditional auditing and
investigation inefficient and ineffective in the detection and prevention of the various types of
frauds confronting businesses world-wide. Fraud is a universal problem as no nations is
resistant, although developing countries and their various states suffer the most pain. The
increasing sophistication of financial fraud requires that forensic accounting be added to the
tools necessary to bring about the successful investigation and prosecution of those
individuals involved in criminal activities. The Nigerian banking sector is one of the most
controlled and regulated sectors. In spite of this, financial crimes such as embezzlement,
bribery, bankruptcy, security fraud, among others, have taken the centre stage in the scheme
of things in the sector (Adeniyi, 2016). The consequences and the effects of financial crimes
in corporate organizations are very grave and it is against this background that forensic
accounting emerged. It is a response to the growing sophistication and awareness of financial
crimes. Karwai (2002) maintains that the increasing wave of fraud is causing a lot of havoc
in Nigeria. This is because fraud has eaten deep into every aspect of the Nigerian society to
the extent that many organizations have lost confidence of their customers. Key institutions
like Independence Corrupt Practices Commission (ICPC), Economic and Financial Crime
Commission (EFCC) were established to fight corruption. All these could not work
effectively because of various challenges like politicization and blackmail, constitutional
immunity as stated in section 308 of Nigerian constitution, public apathy and doubtful
attitudes towards anti-corruption work, and slow justice. Forensic accounting encompasses
three major areas of investigation, dispute resolution and litigation support. In the light of the
problem of financial crimes discussed above, this study aims at examining the problems and
prospects of forensic accounting and financial fraud in Nigeria.
Page 3 of 11
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
ISSN: 2395-0463
Volume 04 Issue 05
April 2018
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 181
LITERATURE REVIEW
The term forensic means suitable for use in a court of law, and it is to that standard and
potential outcome that forensic accountants generally have to work. Litigation services and
investigative accounting are the two main branches of forensic accounting, according to some
experts (Crumbley, 2005; Coppolla, 2006).Forensic accounting is a discipline that has its own
models and methodologies of investigative procedures that search for assurance, attestation
and advisory perspective to produce legal evidence. It is concerned with the evidentiary
nature of accounting data, and as a practical field concerned with accounting fraud and
forensic auditing; compliance, due diligence; detection of financial misrepresentation and
financial statement fraud (Dhar and Sarkar, 2010).
Okunbor and Obaretin (2010) reported that the spates of corporate failures have placed
greater responsibility and function on accountants to equip themselves with the skills to
identify and act upon indicators of poor corporate governance, mismanagement, frauds and
other wrong doings. It has become imperative for accountants at all levels to have the
requisite skills and knowledge for identifying, discovering as well as preserving the evidence
of all forms of irregularities and fraud. Therefore, fraud requires more sophisticated approach
from preventative to detection. 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).
The Concept of Forensic Accounting
Hopwood, Leiner, and Young (2008) define forensic accounting as the application of
investigative and analytical skills for the purpose of resolving financial issues in a manner
that meets standards required by courts of law. It is the integration of accounting, auditing
and investigative skills (Dada, Owolabi & Okwu, 2013).
According to Curtis (2008), forensic accountants are essential to the legal system, providing
expert services such as fake invoicing valuations, suspicious bankruptcy valuations, and
analysis of financial documents in fraud schemes. Crumbley (2003) defined forensic science
as the application of laws of nature to the laws of man. He described forensic scientists as
examiners and interpreters of evidence and facts in legal cases that also offers expert opinions
regarding their findings in court of law.
