ABSTRACT
This project has been carried out to empirically examine Forensic Accounting And Fraud Detection In Nigerian Public Sector. A research survey design was used for the purpose of this paper with a sample size of thirty (30) respondents which comprises of auditors and accountants of four (4) ministries selected from Edo state in Nigeria. The statistical tool used to test the hypotheses was Analysis of variance, (ANOVA). From our findings we found out that forensic accounting in Nigeria’s public sector is effective in detecting fraud, there is a significant relationship between forensic accounting and litigation support service in Nigeria’s court and lastly the application of forensic accounting in the public sector is effective in preventing fraud. We therefore recommended that the public sector should build a continuous improvement in the internal control system and initiate effective and efficient internal check, they should adopt a sound accounting system in principal and effective practices, forensic accountant should acquire proper training on forensic accounting skills and procedures and officials in the public sector should embrace integrity, objectivity, fairness, accountability as a moral duty to reduce the level of fraud.
CHAPTER ONE
INTRODUCTION
Background to the Study
Corruption, fraud and other financial and economic fraud and crimes has made it difficult for Nigerian’s to meet her welfare and social responsibilities to citizenry, these evil have assumed alarming proportions and pervasive mismanagement of resources have become the order of the day in public sector. (Okunbor & Obaretin, 2010). According to Okolo (2007), financial crime has become really pervasive and the likelihood of corporate fraud occurring has also become more severe. High level of financial abuse was hindering tax collection, making and enforcement of Law difficult and discourages foreign investment. The wide spread of fraud in public sector have made traditional auditing and investigation inefficient and ineffective in detecting fraud. Oyejide (2008) opined that fraud is a subject that has received a lot of attention both globally and in Nigeria.
According to Karwai (2002), he maintains that the increase wave of fraud is causing a lot of havoc in the Nigeria public sector. This is because fraud has penetrated into every aspect of Nigeria public sector. Okunbor & Obaretin (2010), reported that the spates of corporate failure have placed greater responsibilities and functions on accountant to equip themselves with skills to identify and act upon indicators of poor corporate governance, mismanagement, frauds and wrong doings.
Statement of the Problem
The failure of auditor to prevent, detect and reduce modern frauds like white collar crimes such as security fraud, embezzlement, bankruptcies, contract disparate, money laundering and other financial crime in the public sector has put pressure on professional accountant and legal practitioners to find better ways of exposing fraud in public sector. (Owojori & Asaolu, 2009).It has now become pertinent to introduce and practice forensic accounting which is one of the approaches that can be used for the prevention and detection in public sector since external auditor do not or may not have the required knowledge to be able to detect, prevent or reduce fraud in Nigeria’s public sector.
The research questions
On the premise of the above problems, this study seeks to specifically address the following research questions:
- Is the application of forensic accounting service effective in detecting fraud in Nigerian’s public sector?
- Is there significant relationship between forensic accounting and litigation support service in Nigerian’s court?
- Is the application of forensic accounting service effective in preventing fraud in Nigerian’s public sector?
Objectives of the Study
The main objectives of this study is on Forensic Accounting And Fraud Detection In Nigerian Public Sector
Hypotheses
H1: The application of forensic accounting service in public sector is not effective in detecting fraud.
H2: There is no significant relationship between forensic accounting and litigation support service in Nigerian’s court.
H3 : The application of forensic accounting is effective in preventing fraud in Public Sector.
Significance of the Study
- Significance of the Study
The findings of this work will be of immense significance to the banking sector in Nigeria. It will go a long way in enlightening them on the concept of forensic auditors as well as its role in the management of fraud. It will also benefit other organizations. The findings from this study will aid them to apply better forensic accounting strategies or effective control mechanisms in checking fraud in their diverse organizations.
It will as well benefit the general populace. They will be enlightened on the concept of forensic auditing as well as its roles.
Students and researchers will as well benefit from this study. They will widen their scope from the information contained in this study.
- Definition of Terms
Auditing:Auditing is a branch of accounting concerned with the efficient use of resources to achieve a previously determined objective or set of objectives contained in a plan (Obazee, 2012).
Internal Audit:Internal auditing is the whole system of auditing, financial and otherwise, intended to secure management information and reliability of accounting records (Gbenga, 2011).
Bank Fraud:Bank fraud is defined as the use of fraudulent means to obtain money, assets, or other property owned or held by a financial institution, or to obtain money from depositors by fraudulently representing to be a bank or financial institution (Daniel, 2012).
Internal Control System: This is defined as the whole system of control, financial and otherwise established by management in order to carry on the business of the enterprises in an orderly and efficient manner (Beattie, 2006).