ABSTRACT

This is aimed at evaluating the application offorensic accounting on fraud detection and prevention in Nigeria. The ex-post facto research design and survey research was adopted and data collectedfrom both primary and secondary sources. The collected data was analyzed using the ordinary least square technique. The empirical results ofthe study revealed that the estimated coefficient of the regression parameters have positive sign and thus conform to our priori economic expectation. The implication ofthis sign is that the dependent variable, fraud detection andprevention (FDP) is positively influenced by ComputerAssistedAuditing Technique (CAAT), Data Mining (DM), Relative Size Factor (RSF) and Benford Law (BL). The study revealed that Computer Assisted Auditing Technique (CAAT), Data Mining (DM), Relative Size Factor (RSF) and Benford Law (BL) have a significant influence onfraud detection andprevention. 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 loosing amount running into millions ofNaira to fraudsters 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 when forming an opinion on whether financial statementsfairlypresents thefinancial position, results ofoperations and cashflows ofan entity and are required to discuss theirjudgment about the quality ofan entity’sfinancial statements with the audit committee. It is recommended that this quality assessment will enhance the usefulness offinancial informationfor 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 businessjournals. This poses a major threat to the accountingprofession, in terms oftheir credibility and standing in the business community. It also creates major problems of litigation risk for auditors. If the government and the accounting profession in Nigeria work together then the concept oftrue andJair view can be a keypart ofthe solution to this problem.