This research work is an Appraisal of Public Awareness on Forensic Accounting in Nigeria. Which many Nigerian’s do not know more about.
Hypothesis and research question were carried out and it was very useful in achieving the objectives of these study, were also stated in both all and alternative forms.
To achieve this interviews, questionnaires were conducted and administered on 100 respondents and 98% was achieved this is probably because of the caliber of the respondents who were majorly students and workers in the banking sector.
The statistical techniques used to analyze the data were chi-square and hypothesis. These hypotheses were formulated and tested based on the analysis of data collected, the following major findings were made.
- The level of awareness of Forensic Accounting in the Nigerian economy
- If forensic accounting should be introduced into the Curriculum of Universities.
- If forensic accounting will help restore the mobility of accounting profession.
- If the introduction of forensic accounting can help build transparency honesty in the Nigeria economy.
- If forensic accounting can help build students moral principles.
- If it can find application on the Nigeria public sector
- If forensic accounting can help reduce corruption that is inherent in the nation’s economy
- If the Nigerian government will benefit if put into practices and if forensic accounting will help reduce the rate of ethical violation in financial institution thus reducing the work load of EFCC.
- If forensic accounting will help investors benefit from the study, as it will help broaden their horizon about various unethical practices perpetuated in banks and how they stand to benefit from the service of the forensic chartered accountant in providing evidence admissible by the courts during litigation.
- If forensic accounting in the financial institution can help the accountant stands as an epitome of ethical reference.
In order to answer these questions and to test this hypothesis, data were collected from both primary and secondary sources. The primary source being through the distribution of questionnaire to banks and higher institutions of learning situated in Edo State.
Based on the result obtained from the analysis of responses and the hypothesis tested. It was seen that actually the awareness of forensic accounting can help build Nigerian economy with this one can conveniently say that Nigerians need this trend accounting (forensic accounting) in order to grow.
- BACKGROUND OF THE STUDY
In today’s increasing complex business environment, companies face numerous challenges and risks that are difficult for them to deal with. The threats are worsen by globalization and the advent of modern information technology that are combined to replace old business practices and advanced the pace electronically manipulated fraud on corporate financial mismanagement. The problem with the present companies is that they focus more on financial transactions than on the totality of the entities’ operation and often time neglect areas where there have been constant leakages of other original resources that are of financial consequences but which are not easily detected with a normal analysis of the financial statement.
This project is set out to analyze the appraisal of public awareness on forensic accounting in Nigeria. Forensic accounting professional is more of a private investigator with a financial sixth sense than the book keeper with a green eyeshade. Did you know that the first actor to play the world’s most famous detective Sherlock Holmes was on Accountant? It was only a matter of time, then before detective work and accounting came together to form the Super Sleuth Career now known as Forensic Accounting (Florida Atlantic University School of Accounting. February, 2008).
It is a thrill of hunt. Maurice E. Feloubet who coined the term forensic accounting in 1946 said that the Preparation of Financial Statements has some but not all the characteristics of forensic accounting.
Forensic accountant takes a more proactive, skeptical approach in examining the books of accounting. The word “Forensic means relating to the use of science or technology in the investigations and establishment of facts or evidences” (Wikipedia Encyclopedia, July 2011).
According to the Dictionary by Farlex (2011) defined forensic accounting as a branch of accounting that uses investigative skills to determine the accuracy of a company’s financial statements in legal disputes.
(Webopedia, 2010), define accounting as the process of keeping track of users activities while accessing networks, resources including the amount of time spent in the network, the services accessed while there and the amount of data transferred during the session. Accounting data is used for trend analysis, capacity planning, billing, auditing and cost allocation.
Forensic accounting, sometimes referred to as investigative accounting, is a unique career field that combines accounting with information technology. A forensic accountant uses sophisticated computer programs to analyze financial data and find evidence that would be legally valid during a court proceeding. Objectives verification is the primary goal of forensic accounting. For this reason, many forensic accounting professionals are asked to testify in court cases as expert witnesses for either the prosecution or the defense. (www.wibegeek.com, June, 2011).
A number of studies investigate the efficacy of forensic accounting utilizes accounting, auditing and investigative skills to conduct an examination into a company’s financial statement which is suitable for court. Forensic is sufficiently thorough and complete so that an accountant can deliver his findings in some adverbial legal proceeding or with some judicial or administrative review. The primary methodology employed by forensic accountant is objective verification. (site map/forensic accounting demystified 2010).
Forensic Accounting is the practices of utilizing accounting, auditing and investigative skills to assist in legal matters. It encompasses two main areas: Litigation support, investigation and dispute resolution.
Investigation is the act of determining whether criminal matter such as, employee theft, securities fraud, identity theft and insurance fraud have occurred. As part of the forensic accountants work, he or she may recommend actions that can be taken to minimize future risk of loss. Investigation may also occur in civil matters. For example the forensic accountant may search for hidden assets in divorce cases.
Aderibigbe (2000) sums up that the serious issues rendered by the forensic chartered accountants to include out of court settlement reviewing a large volume of documentation ranging from the more usual accounting records and management information system to memos, communicating complex theoretical ideas in a manner readily understood by the layman valuation of business, qualifying economic losses resulting from motor vehicle accidents etc.
According to Stevenson Smith (2005) “Forensic Accounting is the study and interpretations of accounting evidence.
This research work (Forensic Accounting) is now becoming the chief cornerstone of accounting, Omoniyi (2004), opined that forensic accounting is fastly becoming one of the strongest growth areas in the accounting profession.
According to Anao (2002), Okoye (2000) Ilaboya (2005), Izedonmi (2001) in financial institutions the position of the accountants is very vital such that he stands as the epitome of ethical reference.
Forensic Accounting makes do of indebt knowledge of psychological theories relating to criminal behaviour literally in the use of computers and information technology.
Omoniyi (2004) also sees forensic accounting in the light of interpretation and analysis of complex financial data to give evidence that will be admissible in a court of competent jurisdiction from all that has been said in the above about what this entails, it would be seen that it could help bring about economic growth and development in the Nigeria economy.
Abati (2003) observe that the problem in Nigeria is that the rules are never uniformly applied, some public office holder are just simply above the law. While some can be crucified for stealing a penny forensic accounting does not sleep and let perpetrators of fraud get away. It pierces through the veil of incorporation and brings perpetrators of fraud to justices.
In Nigeria, the demand forensic accounting is now on the rise, the EFCC is doing a good job in the application of the knowledge of forensic accounting in tracking down fraudsters. Money laundering in the Nigeria economy is a phenomenon little known to the ordinary Nigeria.
According to Ribadu (2005) hundred money chases the same goods and services as hard earned income artificially pushing up the prices of goods and services beyond the buying power of the ordinary people.
One area forensic accounting has enjoyed application is the tracking down of politicians and their laundered funds, if the country called Nigeria has to move foreword it has to need forensic accounting.
Forensic accounting reasons and measures the awareness of this integral aspect of accounting amongst Nigerians. This is simply what this research work seeks to achieve.
- RESEARCH QUESTIONS
The study seeks to measure the awareness of forensic accounting in Nigeria which is not readily known at the moment.
- Is forensic accounting of any importance to Nigeria’s economy?
- What is the level of awareness among the Nigeria public?
- Should forensic accounting be introduced into the curriculum of universities?
- Will the study be of help to subsequent researchers in the new discipline where materials and text books exist?
- OBJECTIVE OF THE STUDY
- To examine the importance of forensic accounting Nigeri.
- To find out its level of awareness among the Nigeria public.
- To establish the introduction of forensic accounting into the curriculum of tertiary institution enjoys popular support.
- To establish ways by which the accountants can help close up the expectation gap.
- To establish if corrupt practices are set back for financial institutions and the country at large.
- To provide forensic accounting awareness that can develop the curriculum of tertiary institution.
1.4 HYPOTHESIS OF THE STUDY
Ho: forensic accounting is not important because it will not help reduce the ethical violations in the Nigeria banking sector.
Hi: Forensic accounting is important because it help reduce the ethical violation in the Nigeria banking sector.
Ho: the awareness level of forensic accounting in Nigeria is not low
Hi: the awareness level of forensic accounting in Nigeria is still very low.
Ho: forensic accounting should not be introduced into the curriculum of universities because it does not help in building moral principles.
Hi: forensic accounting should be introduced into the curriculum of universities because it helps in building moral principles in the students of accounting.
- SCOPE OF THE STUDY
The focus is on the evidentiary nature of accounting data and topics including accounting fraud, forensic auditing, compliances due diligences and risks assessments, and detection of forensic statements, misinterpretation and tax evasion, bankruptcy valuation studies.
The study will focus on issues in forensic accounting, its importance curbing fraudulent practices mostly in the private sector. This study also talk about related areas of criminology, auditing and financial accounting. The subject of study in this research work includes the banking industry within Edo State and tertiary institutions across the state.
1.6 SIGNIFICANCE OF THE STUDY
- The study will help expose unethical practices in the banking industry i.e. earning management creative accounting and how forensic accounting can help arrest the situation. This will make banks benefit greatly from this study.
- Investors will also benefit from the study as it will help broaden their horizon about various unethical practice perpetuated in banks and how they stand to benefit from the services of the forensic chartered accountant in providing evidence admissible by the court during litigation.
- It will not be out of order if a study is conducted on what is being referred to as the world fastest growing aspect of accounting.
- The study will be of help to subsequent researchers in the new discipline where materials and text books exist.
- The society will benefit as they can now know about the subject forensic accounting.
- The study seeks to build moral principles that would control and influence the accountant’s behaviour.
- This study is also important because it suggest the introduction of accounting ethics and forensic accounting as a course of study in higher institution, so as to develop the morals, integrity and honesty that the accounting profession requires.
The Nigerian government will benefit if put into practices, it will help reduce the rate of ethical violation in financial institution thus reducing the EFCC work load.
1.7 LIMITATION OF THE STUDY
Some of the limiting factors affecting the quality and quantity of data collected are:
- Misrepresentation being given by students and lecturers.
- The smallest of the sample size which consist institution of higher learning on Edo State only.
- The inability to obtain a complete random sample
- Imprecise measurement of variables.
- Low response rate is also anticipated.
1.8 DEFINITION OF TERMS OF STUDY
- Accounting is the process of recording, analyzing, classifying summarizing a significant manner, reporting and communicating of financial information to user’s of such information.
- Forensic is defined as the scientific tests or techniques used in the investigation of crimes of the use of science and technology to investigate and establish facts in criminal or civil court of law.
- Forensic accounting is the application of accounting skills in exposing financial crimes and present to court admissible evidences.
- Forensic accountants are professionals who use a unique blend of education and experiences to apply accounting, auditing and investigative skills to uncover truth, from legal opinions and assist in investigations.
- Litigation is the process in which an individual or entity brings before a court a dispute or grievances and demands a settlement or reimbursement for damages.
- Investigation is the act of determining whether criminal matter such as; employee theft, securities fraud, identify theft, and insurance fraud have occurred.
- Appraisal is the act of estimating or judging the nature or value of something or someone.