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SYNDICATE 3Kinanty
Nabilah
Raden Indra
Selvia Herlina
Forensic Accounting Financial Fraud
In Nigeria An Emprical Approach
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Transparency Internationals 2013 Corruption Perceptions Index (CPI) rankedNigeria 144 out of 177 countries and territories surveyed.
Nigeria
Background (CPI Rank)
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Banking
Sector
Development
FinancialFraud
Activity
Increasing
Need forForensic
Accounting
Backgroud (Problem)
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The important challenge to the application of
forensic accounting in Nigeria
1
The law is not always up to date with thelatest advancements in technology.
2
Forensic accounting is seen as an expensiveservice that only big companies can afford.
3
Risk of bad publicity on their corporateimage.
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The Purpose of the study
Is there significant agreement on the effectiveness offorensic accounting in financial fraud control?
Is there significant agreement on the effectiveness offorensic accounting in improving financial reportingquality?
Is forensic accounting effective in improving internalcontrols?
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The integration of accounting, auditing and investigative skills yields thespecialty known as Forensic Accounting.
Forensic accounting is a discipline that has its own models and methodologies of
investigative procedures that search for assurance, attestation and advisory
perspective to produce legal evidence.
The activities of forensic accountants involve: investigating and analyzing financial
evidence; developing computerized applications to assists in the analysis and
presentation of financial evidence; communicating their findings in the form of
reports, exhibits and collections of documents; and assisting in legal proceedings,
including testifying in courts as an expert witness and preparing visual aids to
support trial evidence.
Forensic Accounting
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Nature offrauders
external
Financial Fraud
Politicaldonation
kickbacks
Article
pricing
Political
donation
cronyism
MethodEmployed
internal
Mixed fraud
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QUALITY FINANCIAL REPORTING
higher cost
of capital
-
Incompleted
infromation
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Uncerainty
creates risk
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Risk
motivatesinvestor
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what happens when financial reporting does not tell
the whole story?
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Internal Control
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Accountant
Auditor
Top ManagementSatff
Sampling Random
Primary data
Questionaire
Non-parametric test
143 Respondents Auditor
Prepares User
academic
Population Sample
RespondentsData
Methodology
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Female,
55.90%
Male,
45.10%
M.SC
37%
B.SC/H.ND
47%
OND
16%
Self-employed,
24.48%
Work in public
firm, 44.76%
Work in
private firm,35.66%
20-30, 19.58%
31-40, 43.40%
41-50, 20.97%
51-Above,
16.08%
Figure 1 Sex Distribution of the respondents Figure 2 Age Distribution of the respondents
Figure 3 Educational Qualification of the respondents Figure 4. Employment status of the respondents
Source: Researchers survey, 2012
Presentation of Result
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Statistical Test
Cronbach Alpha Number of Items
.876 15
Table 1. Cronbach Reliability Test
Source: SPSS 20.0
Table 2. Forensic accounting and financial fraud controlItems Mean S.D
1 Forensic accounting can be used to locate diverted funds or assets 4,80 0,49
2Forensic accounting can Identify misappropriated assets and identify reversibleinsider
transactions;4,06 0,45
3 forensic accounting is effective as a fraud detection tool 4,12 0,874 Forensic Accounting is solely enough as a tool to detect suspicious or fraudulent transactions 3.21 1,10
5 Risk assessment processes under forensic accounting specifically cover risk of fraud. 4.64 0,56
Source: SPSS 20.0
Table 3. Forensic accounting and internal control qualityItems Mean S.D
6 Designing internal control system 4,6 0,49
7 Monitoring and evaluation of internal control systems 4,84 0,37
Table 4. Forensic Accounting and financial reporting credibilityItems Mean S.D
8 Enhancing quality of financial reporting 4,64 0,89
9 improves stakeholder confidence in corporate financials 4,32 0,62
10 Accountants/auditors with forensic accounting skills will deliver more quality financial reporting. 4,56 0,50
11.Forensic investigations deals directly with fraud investigation and this reduces financial reporting
expectations gap4,40 0,571
Source: Researchers computation, 2013
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Test ResultTable 5. Binomial test result of the effect of forensic accounting on financial fraud control,
financial reporting quality and internal control
(1) (2) (3) (4) (5) (7)
H1: Financial fraud control Disagreeing
Agreeing
Total
30
113
143
0,21
0,79
100
0,50 confirmed
H2:Fincancial reporting quality Disagreeing
Agreeing
Total
50
93
143
0,35
0,65
1,00
0,50 Confirmed
H3: Internal control Disagreeing
AgreeingTotal
43
100143
0,30
0,701,00
0,50 confirmed
Source: Researchers computation, 2013
Test Result
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There is significant agreement amongst stakeholders on the
effectiveness of forensic accounting in financial fraud
control, financial reporting, and internal control quality
Forensic accounting is a discipline that has its own and
methodologies of investigative procedures that search forassurance, attestation, and advisory to produce legal
evidence.
Institue of Chartered Accountants of Nigeria, Association of
National Accountants of Nigeria and the NationalUniversities Commission should encourage formalization and
specialization in the field forensic accounting.
Conclution
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THANK YOU
nabillah kinanty selvia indra