ABSTRACT

This study aimed at Effect of forensic accounting on fraud detection and prevention in Nigeria. The ex-postfacto research design was adopted and data collected from both primary and secondary sources. The collected data was analysed using the ordinary least square technique. The empirical results the study revealed that the estimated coefficient ofthe regression parameters have positive sign and thus conform to our priori economic expectation. The implication of this sign is that the dependent variable Fraud Detection & Prevention (FDP) is positively influenced by Assisted Auditing Technique (CAAT), Data Mining (DM), Relative Size Factor (RSF) and Benford Law (BL). The study revealed that Assisted Auditing Technique (CAAT), Data Mining (DM), Relative Size Factor (RSF) and Benford Law (BL) have a significant influence on fraud detection & prevention. In view of the craze for money in Nigeria, misplace value judgment and the prevailing harsh economic environment, frauds are on the increase and the banks are losing amount running into millions ofnaira tofraudsters almost on daily basis. In most cases when the frauds are detected early, amount already drawn are usually difficult to recover. The study recommended that auditors are expected to consider whether the information presented in the financial statements is relevant, reliable, comparable and understandable whenforming an opinion on whether financial statementsfairly present the financial position, results of operations and cash flows of an entity and are required to discuss theirjudgement about the quality of an entity’s financial statements with the audit committee. It is recommended that this quality assessment will enhance the usefulness of financial information for all users and should therefore be included in the statutory auditor’s report. Also, there should be great awareness ofthe problem offorensic accounting in Nigeria, as evidenced by articles in accounting and business journals. This poses a major threat to the accounting profession, in terms oftheir credibility andstanding in the business community. It also creates major problems of litigation risk for auditors. If the government and the accountingprofession in Nigeria work together then the concept oftrue andfair view can be a keypart ofthe solution to this problem.