FORENSIC ACCOUNTING AND NIGERIA BUSINESS ENVIRONMENT ABSTRACT The focal point of this work is on how forensic accounting could aid fraud detection and prevention when incorporated into the mainstream of Nigeria business environment. Review of relevant literature were carried out in order to gain deeper insight and understanding of the subject matter. Questionnaires were administered in order to generate the necessary primary data and were descriptively analyzed. The various hypotheses were tested using chi-square statistical analysis. The result of the hypotheses revealed that corporate fraud reduction is dependent on forensic accounting. It however revealed that forensic accounting cannot promote responsible corporate governance. Based on the findings of this research work, the researcher came to a conclusion that corporate fraud and poor corporate governance cannot be completely eliminated, it can only be reduced to a barest minimum. It is recommended that the study of forensic accounting courses should be introduced into the Nigeria educational curricular. Also, ethics and value system of the country must not be handled with levity and finally an effective legal system should be put in place to ensure speedy dispensation of justice. TABLE OF CONTENTS CHAPTER ONE Background of the Study Statement of the Problem Objective of the Study Scope of the Study Relevance of the Study Hypotheses Methodology Limitation of the Study Definition of Terms CHAPTER TWO: LITERATURE REVIEW Historical Background of Forensic Accounting Definitions and Meaning of Forensic Accounting Definition and Meaning of Fraud Types of Fraud Nature and Extent of Financial Crime Causes of Fraud Fraud Detection, Prevention and Control Roles of Forensic Accounting in Litigation Support Skills and Characteristics of a Forensic Accountant Development of Forensic Accounting in the Accounting Profession Opportunities and Challenges of Providing Forensic Accounting Services An Overview of Nigeria Business Environment Roles and Responsibilities of the Traditional Auditor or External Auditor Differences between a Forensic Accounting and the Traditional Auditing Importance of Forensic Accounting on the Nigeria Business Environment Financial Statement Fraud in Nigeria Business Environment and its Link with Forensic Accounting Level of Forensic Accounting in Other Countries CHAPTER THREE: RESEARCH METHODOLOGY Introduction Research Design Population Sample and Sampling Technique Research Instruments Sources of Data Data Analysis Method Research and Validation of Hypothesis Validation Problem Identification CHAPTER FOUR: ANALYSIS AND INTERPRETATION OF DATA 4.0 Introduction Questionnaire Administration Data Description and Interpretation Test of Hypothesis CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS Introduction Summary of Findings Conclusion Recommendations Bibliography Appendix CHAPTER ONE BACKGROUND OF THE STUDY The recent multi-billion dollars corporate scandals (Enron, Tyco, World Com, Adelphia and others) have shaken the business world. The public and governmental reaction to these events has been enormous. It has triggered congressional action that resulted in legislation (Sarbanes-Oxley Act, 2002) and auditing standards (Statement of Accounting Standard No. 99) that require companies and their auditors to be more aggressive in detecting and preventing fraud, which in turn, has elevated the importance of the accounting profession in protecting the integrity of the financial system in order to prevent such scandals. In today’s society, there is widespread growth in white-collar crimes evidenced by both fraudulent financial reporting and misappropriation of assets. Racketeering and terrorist groups often rely on money-laundering schemes to conceal and disguise their activities such as identity theft, present new challenges to accountants. The impact on the accounting profession has been dramatic. The environment has created many job opportunities in the accounting profession at federal, state and governmental agencies, such as the Securities and Exchange Commission, the revenue service and the office of the inspector general, all have an increased impact on accountants and others with forensic accounting investigation skills. However, modern organized corporate frauds are sophisticated, and well resourced by manager, entrepreneur and politicians to mention but few. There is the need to respond to this changing criminal threat and the skills of non-traditional investigators like accountant and the legal experts are needed to combat the corporate ill, this has arouse the call for forensic accountant. Forensic accounting has to do with the use of the use accounting discipline to help determine issues of fact in business litigation. It involves the application of accounting, business, legal and financial skills in settling commercial or legal disputes (Omoniyi, 2004). Simply put, forensic accounting is accounting that is suitable for legal review, offering the highest level of assurance, and including the now generally accepted connotation of having been arrived at in scientific fashion, that is forensic accounting is sufficiently, thorough and complete so that an accountant, be deliver in finding as to accounts, inventories, or the presentation thereof that is of such quality that it would be sustainable in some adversarial legal proceeding, or within some judicial or administrative review. The focal point of this research work is on how forensic accounting could aid fraud detection and prevention when incorporated into the mainstream of Nigeria business environment. 1.2 STATEMENT OF THE PROBLEM The failure of statutory auditor to prevent and reduce misappropriation of corporate fraud and an increase in corporate crime in Nigeria business environment has put pressure on the professional accountants and legal practitioners to find a better way of exposing crime in the business world. The specific problem which this research intend to address are as follow: Can forensic accounting reduce corporate fraud and mismanagement? Is forensic accounting the same as fraud investigation? OBJECTIVE OF THE STUDY The problem of fraud in Nigeria business environment need to be seriously addressed. The objectives of this research work are; Is to find out if corporate fraud reduction will depend on the forensic accountant Forensic accounting can promote responsible corporate governance. SCOPE OF THE STUDY The purpose of this study we are to concentrate on forensic accounting with special emphasis on corporate fraud reduction and mismanagement in Nigeria business environment. Data will be obtained from various stakeholders in the Nigeria business environment (specifically Edo State). RELEVANCE OF THE STUDY When viewed from the perspective of forensic accounting in Nigeria business environment, the significance of this research will be appreciated. The primary focus of this research is to enlighten non-forensic accountant on how corporate fraud and mismanagement can be tackled. The research is also aimed at creating understanding of the duties of foreign accountants in litigation support, the potential for forensic accounting services in the Nigeria business environment, special skills and characteristics of forensic accountant. Future researchers on this field will find this work as a veritable reference point and will create a better insight into the relationship between corporate fraud and forensic accounting. HYPOTHESES Hypotheses shall be developed and tested to ensure a more effective and result oriented work. The null hypothesis (Ho) and the alternative hypothesis (H1) will be used for the purpose of this study. Hypothesis (1) Ho: Corporate fraud reduction is not dependent on forensic accounting. H1: Corporate fraud reduction is dependent on forensic accounting. Hypothesis (2) Ho: Forensic accounting cannot promote responsible corporate governance. H1: Forensic accounting can promote responsible corporate governance. METHODOLOGY This methodology help us to examine the different method employ in the collection of data and other method of presentation and analysis of such data. The research design that will be use for the purpose of this study also came under methodology. For the purpose of this work the survey design will be employed. The population and the research instrument and the method of sourcing data and collection will be analyzed to help business owner and future forensic accountant. LIMITATION OF THE STUDY No study is perfect. Although most business researchers strive to employ scientific tools and method. Some of the constraints problem encountered by the researchers in the course of the research are: Insufficient Research Materials: The researcher encountered some constraints in the collection of information, very limited materials were obtained from the library. Time Constraint: Limited time available also posed some challenges to the researcher. Financial constraints: The unavailability of funds was also a barrier to this research work. DEFINITION OF TERMS Corporate fraud:=This is deliberate dishonesty to deceive the public, investor or lending companies, usually result in financial gain to the criminal or organization . Fraud:= Is an abuse of position, or false representation or prejudicing someone’s right for personal gain. Litigation support:= Is the process of providing consultation and support services to the attorney in regard to current and pending cases. Forensic Accounting:= Is accounting that is suitable for legal review, offering the highest level of assurance, and connotation of have been arrived at in a scientific fashion. Racketeering:= Is the operation of an illegal business by a group closely connected to organized crime. Mismanagement:= This means a careless or inefficient once energies or abilities. REFERENCES Agbonifoh,B.A and Yomere, G.O(1999) Research methodology in the Social sciences and Education uniben. IFAA (2008) International Forensic Accounting Association, http://www.forensicaccountingassociation.com La Rosa, L. (2009), “An Overview of Fraud and Forensic Accounting”, http://www.lasalle.ed/school. Omoniyi, S. O. (2004), “The Emergence of Forensic Accounting”, The Nigerian Accountant, April/June, pp. 43 – 46. Owojori, A. A. and Asaolu, T. O. (2009), “The Role of Forensic Accounting in Solving the Vexed Problem of Corporate World”, European Journal of Scientific Research, ISSN 1450 – 216X, Vol. 29, No. 2, pp. 183 – 187. Sarbanes-Oxley Act (2002), Statement of Auditing Standard, No. 99.
FORENSIC ACCOUNTING AND NIGERIA BUSINESS ENVIRONMENTFORENSIC ACCOUNTING AND NIGERIA BUSINESS ENVIRONMENT ABSTRACT The focal point of this work is on how forensic accounting could aid fraud detection and prevention when incorporated into the mainstream of Nigeria business environment. Review of relevant literature were carried out in order to gain... More
FORENSIC AUDIT PRACTICE IN LOCAL GOVERNMENT ADMINISTRATIONFORENSIC AUDIT PRACTICE IN LOCAL GOVERNMENT ADMINISTRATION TABLE OF CONTENT CHAPTER ONE INTRODUCTION 1.1 Background to the Study 1.2 Statement of Research Problem 1.3 Research Objectives 1.4 Research Hypotheses 1.5 Significance of the Study 1.6 Scope of the Study 1.7 Limitations of the Study... More