ABSTRACT
This research work concentrated on forensic
accounting and audit as a panacea for mitigating / preventing corporate fraud
in Nigeria.
The purpose of this research work, is to fight / curb the increasing rate of
fraud in the Nigerian Banks. The significance of this study is to determine the
root causes of fraud and misappropriation in banks and recommend ways to curb
or country these corrupt practices. Research questions and two hypothesis were
employed. Simple percentage was used to analyse the research questions while
chi-square was used to test the hypothesis. Based on the analysis of the
research questionnaires, and the test of hypothesis, the following findings
were made. Carelessness of accounting records my accountant causes fraud in the
bank and other business organizations, employment of unqualified staff courses
fraud in the banks, employment of forensic accountants helps in discouraging
found in banks. Diversified accounting and auditing experience controls found
in banks, audit of the financial statement of banks discourages corporate fraud
in banks. Finally, it was therefore recommended that management should be
mindful / careful of the kind of staff they employ / recruit in banks, a sound
and good internal control system should be employed and strictly adhered to, management
should set the tone at the top by creating healthy friendly organizational
climate so as to aid the organization their objectives, proper authorization
limit and control of transaction is necessary so as to help stamp out frauds in
banks.
TABLE OF CONTENTS
Title page
Approval page
Dedication
Acknowledgement
Abstract
Table of contents
CHAPTER ONE:
1.0 Key
words / introduction
1.1
Background of the study
1.2
Statement of problem
1.3
Purpose of the study
1.4
Significance of the study
1.5
Research Question
1.6
Hypothesis one and two
1.7
Scope of the study
1.8
Definition of terms
CHAPTER TWO:
Review of Related Literature
2.1
Theoretical framework of the study
2.2
Redflags and nature of co-operative fraud
2.3
Sources and causes of co-operative fraud
2.4
The role of forensic accounting in co-operate
environment
2.5
The Techniques in forensic accounting
2.6
Need of forensic Accounting
2.7
The role of Auditors in co-operate environment
CHAPTER THREE:
Research
Methodology
3.0 Introductions
3.1 Design
of the study
3.2 Area
of the study
3.3 Population
of the study
3.4 Sample
of the study
3.5 Instrument
for data collection
3.6 Validity
of the instruments
3.7 Distribution
and Retrieval of the instrument
3.8 Method
of data Analysis
CHAPTER FOUR:
Presentation and Analysis of Data
4.1 Presentation,
Analysis and interpretation of data
4.2 Findings
CHAPTER FIVE:
SUMMARY OF FINDINGS / CONCLUSION AND RECOMMENDATION
5.1
Summary of Findings
5.2
Conclusion
5.3
Recommendation
5.4
Limitation of the study
References
Appendix 1
Appendix II
Questionnaires
CHAPTER ONE
1.0 KEY / INTRODUCTION
i Forensic
ii Accounting
iii Audit
iv Panacea
v Preventing
vi Corporate
vii Fraud
1.1 BACKGROUND
OF THE STUDY:
Forensic
accounting integrate accounting, auditing and investigating skills. It is a
specially practice area of accounting that describes engagement that result
from actual or anticipated disputes or litigation. Forensic according to the Webster’s
dictionary means, belonging to, used in, or suitable court of judicature or to
public discussion or deliberate, it therefore means the forensic accountprovides
accounting analysis that is suitable to court of judicature or to public
discussion or debate which will form the basis for dissension, debate and
ultimately dispute resolution.
In
the words of filmer (2003) forensic accounting is seen as a method of
investigating financial transaction and business situations in order to obtain
the truth of and develop an export opinion regarding certain fraudulent
activities.
Two
areas of expertise make up the field of forensic accounting; litigation support
includes business valuation revenue analysis, expert witness testimony and
failure earning valuation while instigative accounting is the process of
gathering evidence of criminal conduct and sustaining the content of damages.
Forensic
accounting is hardly a new field, but in recent years, banks, insurance
companies and even law enforcement agencies, the federal Bureau of
investigation (FBI) nad Internal REvenue Services (IRS) have increase the use
of these experts. A study conducted by Kessler international (a forensic
Accounting and investigation) showed that
there is a growing need for experience forensic
Accountants. ABC now.com reports that industry
insiders expect more companies to use forensic
Accountants as preventive measures as the
demand for trustworthy financial statements increase in the wake of the recent
accounting scandals. Todd avery, president of the risk consulting consulting
firm and worldwide says, that may executives are paying greater attention to
controls and fraud. Prevention today, then they were given a few years ago.
Historically,
forensic accountants who work inpublic practices were given often, called,
after owners suspected that fraud has been committed. Now recent major
corporate scandal have prompted business owners to turn forensic accountant to
proactive. Fraud checkups. The frauds these specialists ae looking for are
usually two general types namely: financial statement fraud and theft of assets
(these two can co-exist in the situation in which management has taken assets
and misstated financial statement to cover-up falsification). To uncover
financial statement fraud, the forensic
Accounting often analyses the financial
statement by using ratio analysis and certain data-mining techniques such as Bedford’s a procedure
used to determine the likelihood that data have been altered. Other procedures
used include inspection of documents, conduct of interviews with persons who
would have knowledge about any fraud that has occurred.
The
occupational or corporate fraud committed by employees usually involve, theft
of assets. Embezzlement has been the most committed fraud for the last three (3)
years. Employees may be involved in kick backs schemes, identify theft or
conversion of corporate assets for personal use. The forensic accountants
coupled the observation of the suspected employee with physical examination of
assets, investigation and inspection of documents and interviews of those
involved.
Ekechi
(1990) was of the opinion that in order to attain the objective of fraud
management, there is need for compliance with established policies, rules and procedures.
Also rules that employees should be made about of the risk of attempting to
defraud and action expected if caught.
Finally
for forensic accounting and audit to serve as technique or panacea for
preventing corporate fraud in Nigeria banks, the forensic accountants must possess the required
knowledge and skill in advanced and continued education in appropriate
discipline, diversified accounting and audit experience, communication skills
(oral and written) practical business experience, ability to work in a team
environment and people skills and flexibility (Grippo, 2003) in view of this,
this study was narrowed down to first bank Nigeria Plc. The bank began
operation in 1894. it operates as a universal bank providing wholesales, retail
co-operation, investment and transaction
banking services to its customers in the Nigerian market. The bank divided its
operation into three major divisions:
a) Retail banking
b) Wholesale banking
c) Treasury and capital market and
investment banking services.
1.2 STATEMENT
OF THE PROBLEM
The
level of corporation fraud in Nigeria
today has an adverse effect on our nation.
This
epidemic has eaten deep into every aspect of our society and should be given
great attention; fraud comes in many ways ranging from embezzlement, poor
management of policy and procedure and while the list of possible incidences is
exhaustive however, there are certain warning signals which can indicate the
occurance of this crime are:
i)
Inadequate regular payment of staff salaries.
ii)
Staff of the organization staying longer on a
particular job.
iii)
Lack of proper supervision and control.
With
the above examples, one cannot help but state the following problems:
a)
The indepth knowledge and skills on forensic
accounting as a tool for preventing corporate fraud in Nigeria
b)
The professional qualification of forensic accountants
will help in detecting fraud in an organization.
c)
Diversified forensic auditing experience will service
as a panacea for preventing top corporate fraud in Nigeria.
d)
Practical business experience by forensic accountant
is a technique for controlling corporate fraud in Nigeria.
1.3 PURPOSE
OF THE STUDY
The main
purpose of this study is to find out how forensic accounting and audit service
as panacea for preventing corporate fraud in Nigeria. Other purposes are:
1
To find out if the in-depth knowledge and skill in
accounting and audit help forensic accountant in preventing corporate fraud in
banks.
2
To investigate if the forensic accounting standard in
carrying out their duties and fighting the growing rate of fraud in Nigeria.
3
To determine whether the forensic accountants deal
with the materials weakness of the internal control system.
4
To find out if forensic accounting and audit took
beyond the figure in preventing and detecting fraud in banks.
1.4 SIGNIFICANCE OF THE STUDY
Since
fraud has give rise to failure in accounting and accounting restatement of
justified earning, with litigation and prosecutions taking place every day in
our society, it is paramount to highlight the significance of the study which include
the following:
1 To
determine the cause of fraud and misappropriation and recommending ways to
counter these corrupt practices.
2 To
determine the role in which forensic accountants and audit plan towards
accountability and control of the public fund.
3 To
determine the possible way of detecting and preventing fraud as a challenge
role of the auditor.
1.5 RESEARCH QUESTIONS
The
following research questions guided the study:
1 Does the
in-depth knowledge and skills of forensic accounting and audit a tool for
preventing corporate fraud in banks?
2 Does
forensic accountant commonly use statutory requirement in accounting standard
in preventing corporate fraud in banks?
3 Do you
think the forensic accountant is responsible for any materials weakness of the
company’s internal control system?
4 Do
forensic accounting and audit look beyond numbers in detecting and preventing
fraud in banks?
1.6 HYPOTHESIS ONE
The following hypothesis were formulated for the
study:
Ho: The
utilization of accounting, audit and investigative skills posses by the
forensic accountant does not help in detecting fraud in the organization.
Hi: The
utilization of accounting, auditing and investigative skills posses by the
forensic accountant help in fraud in the organization.
Hypothesis
Two
Ho: The forensic accountant does not comply with
statutory requirements and accounting standards in preventing corporate fraud
in banks.
Hi: The forensic accountant comply with statutory
requirements and accounting standards in preventing corporate fraud in banks.
Hypothesis
Three
Ho: The
forensic accountant and auditors are not responsible for any material weakness
of any company’s internal control system.
Hi: The
forensic accountant and auditors are responsible for any material weakness of
any company’s internal control system.
1.7 SCOPE OF THE STUDY
A
research work of this, is a researcher boundary. The researcher delimits its
scope of study to forensic accounting and audit as a panacea for preventing
corporate fraud in Nigeria
( a study of first bank)
1.8 DEFINITION
OF TEAMS
Some terms
associated with the research are explained to enhance understanding of the
research. Hey are as follows:
1. Forensic
investigation: The utilization of specialized investigation, skills in carrying
out an inquiry, conducted in such a manner that the outcome will have application
to a court of law: A forensic investigation may be ground in accounting,
mediocre, engineering or some other discipline (Aroh N.N. 2010).
2. Forensic
Audit: An examination of evidence regards an assertion to determining its
correspondence to establish criteria carried out in a manner suitable to the
court (Aroh M.M. 2010).
3. Internal
Audit: An audit performed by an employee who examine operational evidence to
determine whether prescribed operating procedure have been followed.
4 External
Audit: This is where independent persons are brought inform outside an
organization to review the account prepared by management (study pack
accounting technician scheme west state).
5 Litigation
support: It provides assistant of an auditing nature in a matter involving
existing are pending litigation. It deals primary with issue relate to the
qualification of economic damages.
6 Investigation
Accounting: It is often associated with investigation of criminal matters. An
example would be investigation of employee theft, securities fraud, insurance
fraud, kickbacks and proceed of crime investigation.
7 Fraud:
It is a deliberate or intentional act by a privileged individual or group of
individuals within or out side the organization which results in a mass representation
of financial statement. Journal of forensic accounting auditing fraud and
taxation published B.R.T. Edward.
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