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FORENSIC ACCOUNTING AND FRAUD DETECTION IN THE NIGERIAN PUBLIC SECTOR

  • Type:Project
  • Chapters:5
  • Pages:110
  • Methodology:Chi Square
  • Reference:YES
  • Format:Microsoft Word
(Accounting Project Topics & Materials)
FORENSIC ACCOUNTING AND FRAUD DETECTION IN THE NIGERIAN PUBLIC SECTOR
CHAPTER ONE

INTRODUCTION
1.1 BACKGROUND TO THE STUDY
The driving force of any developing economy is the public and the private sector which are considered the two most important and vital sector in developing any economy. These two sectors of the economy though similar in most areas yet are contrasted in some areas especially in their approach and methodology to the detection and prevention of fraud. (Salau, Dodo & Aladesunkanmi. 2012).  
    The private sector is the segment of the national economy owned, operated, controlled and managed by private individuals or enterprises. The private sector main objective is the maximizing of profit, creation of wealth for its shareholders and minimizing of cost. The Public sector on the other hand is the part of the economic system that is controlled by the national, state, provincial or local government. It is the part of the economy concerned with providing various governmental services as well as basic amenities in other to make the standard of living affordable to it citizens (Schacter, 2000).
The unending distortion of economic and social development in Nigeria due to various financial scandals and fraudulent practices calls for the need to eliminate fraud (Salau, Dodo & Aladesunkanmi. 2012). It has been generally observed that government spending has always been big business but it has become so massive and extravagance today that the public through its legislators is demanding to know whether the huge outlays of money are being spent effectively or whether they should be spent at all on the project the government claim these funds are spent on.
Financial fraud can generally be defined as an intentional act of deceit involving financial transactions for the purpose of personal gain at the expense of a system, an entity or a person. What then is the role of the forensic accounting in curbing the drastic growth of the fraudulent financial practices in the public sector as well as its negative impact on developing economy and its regular citizen?
The fundamental role of the forensic accountant is to ensure proper investigation in other to detect fraudulent practice in the business environment, According to Manning (2002), forensic accounting is the combination of accounting, auditing and investigative skills to a standard that is required by a court of jurisdiction to address issues in dispute in the context of civil and criminal litigation. This has its own tangible role in the process of fraud control because in the course of investigating the financial statement of the organization the forensic accountant reveal the fraudulent practices concealed in the financial statements as well as those involve in these practice and also go ahead to advise the management of the measures to be taken in order to forestall the recurrence and continuity of these acts. By monitoring the operation of public power and how public resources are used, forensic accounting can reduce the abuse of power and public resources. The Association of Certified Fraud Examination (ACFE), in agreement with the separate surveys carried out by the U.S department of Justice, Price Water House Coopers identified three main categories of fraud that affects organizations; the first of these is asset misappropriations, which involves the theft or misuse of an organizations asset. Examples include theft of inventory or cash, false invoicing, accounts receivable fraud and payroll fraud. The second category of fraud is fraudulent financial statements which are the most costly with median loss of $2million among the 99 financial misstatements included in the 2008 ACFE study carried out in the United States America. The final of the three fraud categories and most common is fraud due to corruption occurring in 27 percent of all fraud cases (AICPA, 2009).
Rabiu and Noorhayati (2015), expressed their grief that fraud has not only distressed the Nigerian economy but also impacts on the personal life and behavior of the ordinary citizens. It therefore should be made mandatory that good  risk management skills, professional prevention and detection measures  as well as well designed internal control  mechanisms be installed in every public sector organization by the public authority.
One of the pivotal mechanisms for fighting financial fraud especially in the public sector is forensic accounting. Irrespective of the strategies, reporting mechanisms, best practices and other effective internal control measures used. However, it is important to note that without the professional roles of auditors in the public sector, the forensic paraphernalia to curb the extant fraud and its increasing impact in the public sector are not complete.
Forensic accountant are experts in detecting fraud due to their application of accounting and investigating skills, which makes them very important in fighting the underlying financial frauds in the public sector of developing economy. Ribadu. (2004) stated that accurate record keeping of government income and expenditure by the public sector accountants is a key importance of tackling financial fraud in the Nigerian public sector.
Forensic accountant are not without challenges as they have some environmental factor limiting the discharge of their duties as a result of the challenges they encounter. Challenges such as testifying as an expert, obtaining evidence which can serve as a litigation support in the court, to mention a few over detecting of financial fraud (Izedonmi F. 2011).
1.2 STATEMENT OF RESEARCH PROBLEMS
The negative effects of the fraudulent practices in developing economy such as Nigerian and their impact on the lives of ordinary citizen call for great concern. It has been observed that in developing economy, huge amount of money is lost through fraud which drains the nation’s meager resources with their far-reaching and attendant consequences on the development of the nation. Thus, like Kamaludeen (1991) observes “billions of naira is lost in the public sector every year through fraudulent means” this he argues represents only the amount that is ferreted out and made public. Khan (2006) opines that the loss or inaccessibility of documentary evidence results in the increased opportunity for corruption and fraud. Hence, as a result of the above problems and others (theft of inventory or cash, false invoicing, accounts receivable fraud and payroll fraud, fraudulent financial statements, tax fraud) the following research questions have arisen:
1.    How does forensic accounting as a fraud detection method enhance fraud control in Nigerian economy?
2.    Is there any relationship between forensic accounting and detection of fraud in the Nigerian economy?
3.    Is forensic accounting a solution to fraudulent practices in the Nigerian economy?
1.3 OBJECTIVES OF THE STUDY
      The primary objective of this study is to analyze the incidence of fraudulent financial practices in the Nigerian public sector and the roles of the forensic accountant in the elimination of these fraudulent practices. Specifically, the study aims at achieving the following objectives:
1.    Examine how forensic accounting as a fraud detective method enhances fraud control in theNigerian economy.
2.    To verify the relationship between forensic accounting and detection of fraud in the Nigerian economy.
3.    To determine whether forensic accounting is a solution to fraudulent practices in the Nigerian economy.
1.4 RESEARCH HYPOTHESES
     The hypotheses of this research work are as follows and stated in null form.
Ho1: forensic accounting as a fraud detection method does not enhance fraud control in the Nigerian economy?
Ho2: there is no relationship between forensic accounting and detection of fraud in the Nigerian economy?
Ho3: forensic accounting is not a solution to fraudulent practices in the Nigerian economy
1.5 SCOPE OF THE STUDY
The geographical scope will be centered on the Nigeria economy, and the research work will cover the Nigerian economy using the Edo state public sector as a case study. In other to be unbiased, a period of 10 years encompassing 2007 to 2017 will be considered and will consequently serve as a time frame of this study.  
    This work will utilize primary data from federal and state agencies, parastatals, audit firms as well as ministries in Edo state, Nigeria.  
1.6 SIGNIFICANCE OF THE STUDY
The need for developing economy to free from fraudulent practices cannot be over emphasized for it’s a major key to rapid development.
    Honestly, financial fraud in the Nigerian Public sector has created a wide deviation from the supposed efficient and effective operations of the Nigerian public sector and their contribution to the economy. The need to close or bridge the deviation gap and restore the efficiency of operations and economic contribution of developing economy is the essence of this study. The essence is to see how forensic accountant fight and curb the extant fraudulent practices in the economy and thereby restore the efficiency and effectiveness of the country’s public sector. Another significance of this study is to bring to light the functions of the forensic accountant that are yet to be recognized in developing economy thereby putting an end the ever increasing growth of fraud in developing economy.
       This research work will help the following beneficiaries in the knowledge of this study.
1.    Policy makers; to help policies identify the key issues in financial fraudulent practice and how to prevent it.
2.    Finance student; to help finance students to have the knowledge of the study and exposure on fraudulent practice and how to avoid it.
3.    Government and their agencies; to enlighten the government and its agencies on how forensic accounting can be used effectively in the detection and prevention of fraud in the public sector.
1.7 LIMITATION OF THE STUDY
    The proposed research cannot be guaranteed to come out imperfectly. This is because of the challenges that were likely encountered in the course of the study. These challenges include:
1.    Possibility of bias opinion:
This is an inherent problem in human opinion bases studies. Respondents may not always be sincere in their opinion and more so in this case involve accounting practitioners and their auditing activities. Hence, the findings of this study may better be appreciated as “practitioners’ perspectives”.
2.    Attitude and disposition of respondents
Some of the respondents might be very reluctant in accepting the questionnaires claiming that they were very busy and had urgent tasks before them. Some respondents may not return the questionnaires given to them, the reason for which more questionnaires were printed in order to make up to the number for the sample size.
3.    Sample size:
A larger sample size would increase our confidence level but we could not obtain it due to human inadequacies and time factor, thus restricting us to sample size of 100.

FORENSIC ACCOUNTING AND FRAUD DETECTION IN THE NIGERIAN PUBLIC SECTOR
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Details

Type Project
Department Accounting
Project ID ACC1625
Price ₦5,000 ($14)
Chapters 5 Chapters
No of Pages 110 Pages
Methodology Chi Square
Reference YES
Format Microsoft Word

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    Details

    Type Project
    Department Accounting
    Project ID ACC1625
    Price ₦5,000 ($14)
    Chapters 5 Chapters
    No of Pages 110 Pages
    Methodology Chi Square
    Reference YES
    Format Microsoft Word

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