ABSTRACT

Fraudulent practices among Nigerians are major challenges facing the development of the country. The federal government has been making several efforts in tackling these dreadful menaces by setting up many anti corruption institutions to reduce cases of fraud and other activity of financial and economic crimes but the efforts seemed not to have yielded the desire results or have not been effective. No doubt, financial crimes have affected individuals and corporate organizations negatively. This has put accounting professional bodies into a new perception and paradigm that go beyond statutory audit. The objective of this study focus on forensic accounting and fraud management, evidence from Nigeria, primary sources of data were appropriately used. 572 questionnaires were administered. The Researchers Use SPSS 21 to test the

|

hypothesis to determine the F-value. The findings are that Forensic accounting significantly influences fraud detection and control, also, that there is significant difference between the duties of professional Forensic Accountants and that of traditional External Auditors. The researchers recommended that trained experts like the Professional Forensic Accountants should conduct the investigation, where there is evidence of fraud, appropriate disciplinary action in accordance with the Provision of rules should be implemented, and the restructuring of corruption agencies by the government for better performance. These agencies should have the will power and courage to perform optimally. The professional accountancy bodies in Nigeria should ensure that forensic accountants are trained with modern skills of forensic accounting procedures, the financial reporting council should ensure harmonization and unification of the conflicting regulatory codes that will guarantee best standards and regulations are established for best practice and service delivery.

Keywords; forensic accounting, Financial/ Economic crimes, Fraud management, External Auditor

1.0.     Background to the Study

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

Igbinedion University Journal of Accounting  | Vol. 2 August, 2016

| 247

confronting businesses world-wide. (Onuorah and Appah, 2012) The incidence of fraud continues to increase across private and public sector organizations and across nations. Fraud is a universal problem as no nations is resistant, although developing countries and their various states suffer the most pain. Today; modern organized financial crimes have appeared. Financial crimes such as employee theft, payroll frauds, fraudulent billing systems, management theft, corporate frauds, insurance fraud, embezzlement, bribery, bankruptcy, security fraud (EFCC, 2004), among others, have taken the centre stage in the scheme of things; and on the scale of private, public and governmental preference. Financial crimes today have grown wild, and the emergence of computer software coupled with the advent of internet facilities has compounded the problem of financial crimes. Besides, the detection or minimization of these crimes are made more difficult and committing these crimes much easier. (Izedonmi, and Ibadin, 2012). All these, no doubt, remain outside the ambit of the statutory auditor to report on except he is placed on inquiry. The statutory auditor is not primarily bound to detect fraud and errors. His responsibility is defined by Sec. 359 (CAMA, 2004) and the relevant auditing standards. (Uwojori and Asaolu, 2009) added that quite unfortunately, is the inability of the statutory auditor constrained by the relevant statutes and standards, to deal with financial crimes. Okunbor and Obaretin (2010) reported that the spates of corporate failures have placed greater

Igbinedion University Journal of Accounting  | Vol. 2 August, 2016

| 248

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.

Forensic accounting is a rapidly growing field of accounting that describes the engagement that results from actual or anticipated dispute or litigations. (Okoye and Gbegi, 2013) concur that “Forensic” means “suitable for use in a court of law”, and it is to that standard that Forensic Accountants generally work. Forensic Accounting is an investigative style of accounting used to determine whether an individual or an organization has engaged in any illegal financial activities.

Professional Forensic Accountant may work for government or public accounting firm. Although, forensic accounting has been in existence for several decades, it has evolved over time to include several types of financial information scrutiny. Forensic accounting can, therefore, be seen as an aspect of accounting that is suitable for legal review and offering the highest level of assurance (Apostolou, Hassell & Webber, 2000). Also, forensic accounting encompasses three major areas, investigation,

Igbinedion University Journal of Accounting  | Vol. 2 August, 2016

| 249

dispute resolution and litigation support. Manning (2002) defines it as the combination of accounting, auditing and investigative skills to standard by the courts to address issues in dispute in the context of civil and criminal litigation. Ojaide (2000) noted that there is an alarming increase in the number of fraud and fraudulent activities in Nigeria, requiring the visibility of forensic accounting services. Also the recent happening in the forensic audit of the oil sector where the present government is demanding for another forensic audit exercises to be carried out after a Nigerian audit firm has presented a report to the authority. In the light of the above this study therefore looks into the relevance of forensic accounting and fraud management in the effective reduction of fraudulent practices in Nigeria.

1.1.     Statement of the Problem

In recent times, series of fraud have been committed both in the public sector and private sector of the economy. These in no doubt are perpetrated under the supervision of the internal auditors of the organization. Ojaide (2000) added that there is an alarming increase in the number of fraud and fraudulent activities in Nigeria emphasizing the visibility of forensic accounting services. Okoye and Akamobi (2009) Owojori and Asaolu (2009), Izedomin and Mgbame ( 2011), Kasum (2009) have all acknowledge in their separate works, the increasing incidence of fraud and fraudulent activities in Nigeria and these studies have argued that in Nigeria, financial fraud is gradually

Igbinedion University Journal of Accounting  | Vol. 2 August, 2016