research is aimed at fraud detection and ways of prevention as it affects the
accounting profession and how the accounting profession should play their role
in the detection and prevention of fraud. The purpose is based on knowing what
fraud is all about by detecting it and looking for possible ways of preventing
fraud which is the secondary role of the accounting profession precisely the
auditor. The major source of information ranged from questionnaire, given to
both students and lecturers in Accounting field in Auchi Polytechnic, Auchi to
answer; interview with some bankers, browsing through the net and exchange of
views with intellectuals. Also through teaching in lecture halls. Some of the
findings were that fraud could be detected by an auditor through examining the
books of account with true and fair view to express an opinion, by a qualified
accountant; by a banker through a dishonoured cheque. Other findings were how
fraud could be prevented, should be by some of the correcting measure by the
auditors; take proper record of the books of account; books of account should
be checked by the accountant (auditor); auditor should be independence and of a
true and fair view. Finally it was recommended that after fraud the role of the
accountant should be ways of correcting it or where there is tendencies that
fraud will occur let there be preventive measures.
TABLE OF CONTENTS
Title Page i
1.1 Background to the Study 1
1.2 Statement of Problem 4
1.3 Research Questions 4
1.4 Objectives of the Study 5
1.5 Statement of Hypotheses 6
1.6 Significance of the Study: 6
1.7 Scope of the Study 7
1.8 Limitations of the Study 8
1.9 Definitions of Terms 9
TWO: REVIEW OF RELATED LITERATURE
Internal auditing 13
Concept Of Internal Auditing 13
Purpose of Setting up Internal Auditing 14
Problems Faced by Auditors 17
Effects of Fraud to Nigeria 20
of Fraud in the Nigerian Industry 23
2.7.1 Factors Influencing the Existence
of Fraud 24
Detection of Fraud 25
Prevention of Fraud 26
Motivation: A Way
of Controlling Fraud 27
THREE: RESEARCH METHOD AND DESIGN
3.1 Introduction 30
3.2 Research Design 30
3.3 Description of Population of the Study 31
3.4 Sample Size 31
3.5 Sampling Technique 32
3.6 Sources of Data Collection 32
3.7 Method of Data Presentation 33
3.8 Method of Data Analysis 34
FOUR: DATA PRESENTATION, ANALYSIS AND HYPOTHESIS TESTING
4.1 Introduction 35
4.2 Presentation of Data 35
4.3 Data Analysis 35
4.4 Hypothesis Testing 42
FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1 Introduction 48
5.2 Summary of Findings 48
5.3 Conclusion 48
5.4 Recommendations 49
1.1 BACKGROUND TO THE STUDY
This project explores the relevance of
the accounting profession in the detection and prevention of fund in our
organizations due to the prevalent increase in the rate of misappropriation and
embezzlement of frauds. The financial irregularity is a service problem of
concern globally. It is common that a lot of individual cannot wash their hands
clean of it. Beginning from the public sector to the private sectors,
accounting as a social science plays significant roles in our society and
serves as a legitimating device for the market economy system.
However, accounting figures are heavily
exposed to fraud due to their influence on numerous crucial accessions that
affect various keys factors with far reaching implications. For instance,
accounting figures are source of rewards for management, a basis for the
assessment of firm performance and grouping in the sense of profitability and
non profitability firms and investors decisions. These numerous needs and
interest makes accounting figures to be extremely susceptible to fraud. Fraud
in accounting is fraudulent financial reporting and misappropriation of firms’
resources and thus has been occurring in our society, thereby making great
emphasis on how fraud will be detected and prevented. Though the auditor’s
responsibility has been increased to consider the risk of fraud while
conducting audit of financial statements; thereby calling for stronger
techniques and skills on those who perform these audits. Hence the primary
responsibility of an auditor is to verify whether the financial statements show
a true and fair view of the business while their secondary responsibility is
the prevention and detection of errors and frauds.
Therefore, forensic accountants were
introduced in order to prevent, detect and respond to harm caused by fraud that
an auditor could not detect or prevent. A forensic accountant has the sole aim
of unveiling fraudulent activities within and outside the organization. In
general term, forensic accounting involves reporting where is established and
the report is considered as evidence in the count of low. The engagements of
forensic accounting techniques are usually geared towards funding where money
went, how it gets there and who was responsible.
A forensic accountant has been described
as experienced auditors. Accountants and investigations of legal and financial
document that are hired to look into possible suspicious of fraudulent activity
within a company; or are hired by a company who may just want to prevent
fraudulent activity from occurring. They also provide services in areas such as
accounting, construct, damages, analysis, valuation and general consulting.
Forensic accountants have also been used in bankruptcy, insurance claims,
personal injury claims, fraudulent claims, construction, royalty audits and
tracking terrorism by investigating financial records. Forensic is an
amalgamation of forensic science and accounting.
1.2 STATEMENT OF PROBLEM
The study, therefore is aimed at
ascertaining the impact of the accounting profession that will create on detecting
and preventing fraud using the forensic accounting techniques and that its
contribution in bridging the audit expectations gap. Below are some of the
statements of problem that were looked into;
1. To what degree do people believe in the
opinion of accountants/auditors concerning their report on an audited financial
To what extent has the negligence of
auditors/accountants to their job caused financial misappropriation in our
In what way has the 50% un-independent
quality of our auditor affected their opinion to the public concerning the
financial statement of our sector?
1.3 RESEARCH QUESTIONS
The following research questions were
formulated for the purpose of this study;
How has the total number of reported cases
of fraud affected the economic development of Nigeria?
How has the total amount involved (in
naira) affected the development of banking industry?
What is the impact of actual/exported
loss due to fraud on economic development of the Nigerian industries?
1.4 OBJECTIVES OF THE STUDY
The overall objective of this study is
to find out the perception of accountant techniques in fraud detection and
prevention and how to enhance the chances of fraud discovery and thus help in
closing the audit expectation gap between the auditor responsibilities and
public expectation. For this study, we looked into the following objective
which is as follow;
To examine how the total number of
reported cases of fraud affected the banking sector and economic development of
To investigate how the total amount
involved (in naira) affected the development of banking industry.
To find out the impact of
actual/expected loss due to fraud on economic development of bank.
1.5 STATEMENT OF HYPOTHESES
The following hypotheses were formulated
to aid the study
Ho: There is no
relationship between the number of reported cases of fraud and the economic
development of Nigeria.
Hi: There is a relationship
between the numbering reported cases of fraud and the economic development of Nigeria.
Ho: The total amount
involved in fraud has no effect on the development of Nigerian economy.
Hi: The total amount
involved in fraud has affected on the development of Nigerian economy.
1.6 SIGNIFICANCE OF THE STUDY
The researchers undertook the research
under the topic “Fraud detection and
prevention: the role of accounting profession” the researchers discovered that
the shareholder investors, general public, companies and government will
benefit in the inclusion of accountants to the detection and prevention of
fraud in our establishment and organizations. Since their investigations goes
beyond the investigations of an ordinary auditor. Again, the researchers
discovered that if forensic accountants will be given proper and adequate
support by the proper and adequate support by the beneficiates named above to
do their job independently with full cooperation without interference. From the
perpetration management and direct of the financial misappropriation. The sky
will be their standing point in detecting and preventing fraud in our country
and also help to reduce the level of embezzlement and financial
misappropriation we experience in our organizations.
1.7 SCOPE OF THE STUDY
The research work covers all areas of
auditing in some establishments in Nigeria. The need for this research
arises because the accountant is needed in organizations to control, prevent
and detect fraud.
1.8 LIMITATIONS OF THE STUDY
During the course of this study, the
researchers were confronted with lots of problems that include;
This research was limited by finance
since is a student with a meager pocket money and considering the inflecting
cost of transportation and other costs.
Another major limitation was tine doe to
the nature of the programmes the institution operates as well as academic
stress to a large extent, prevents the researcher from making more findings in
Information Gathering and
Many of the respondents misunderstood
the intention of the researcher and were not ready to give sensitive data.
Is one of the limitation, before you see
your supervisor, you have to be complete in number and when one member is
absent it affects the work. Also increase in cost by calling and sending of
1.9 DEFINITION OF TERMS
is the action or an instance of deceiving somebody in order to make money or
obtain goods illegally.
The act of discovering or the fact of being discovered.
This is the action of stopping something from happening or arising.
According to the Oxford Advanced Learners Dictionary, role is defined as the
function or position that somebody has or is expected to have in an
The degree to which somebody is involved in a situation.
By the American Accounting Association is defined as the process of
identifying, measuring, classifying and communicating economy information to
permit informed judgement and decision by users of the information. It should
therefore be noted that there are three classes of accounting which include the
This can be defined as a systematic identification, measuring, classifying,
summarizing, communication and interpreting of financial information so as to
enable stakeholders to have stewardship report and make investment decisions.
This is defined as the application of professional knowledge and skill in the
preparation of accounting information in such a way as to assist management in
the formulation of policies and planning and controlling of the operations of
This can be defined as the process of accounting for cost from the point at
which expenditure of it ultimate relationship with cost centers and cost
According to the oxford Advanced Learners’ Dictionary is defined is defined as
a type of job that needs special training or skill especially one that needs a
high level of education.
a person whose job is to keep or check financial accounts.
Is a professional qualified account who has been given a license to practice
and carryout public assignment or public practice.
Is defined as the independence examination of an expression of opinion on the
financial statement of an enterprise by an appointed auditor in pursuance of
that appointment with any relevant statutory obligation.
This can be referred to as the combination of human being working together with
the aim of achieving set objectives.
An unintentional mistake, mathematical or clerical or calculative errors.
the system of control, financial and otherwise establishment in order to carry
on the business of the organization in an orderly and efficient manner to
ensure adherence to management policies etc.