Fighting Fraud in Nigeria Banking Industry. An Examination of the Impact of Forensic Auditing

11 Pages Posted: 16 Mar 2020

See all articles by Bashir Babatunde Alao

Bashir Babatunde Alao

Librod Energy Services Limited

Augustine Nwekemezie Odum

Nnamdi Azikiwe University - Department of Accountancy

Date Written: December 31, 2019

Abstract

This paper examines the impact and effectiveness of forensic auditing in detecting, investigating, and preventing frauds in digital environment with emphasis on commercial banks in Nigeria. The study sought to find out to what level the forensic auditors are able to fulfill this mandate and investigate problems that hinder forensic auditors to make progress in their operations in Nigeria. It also established the role of forensic auditing in Nigeria banking operations. This paper also discusses four aspects of computer aided fraud detection that are of primary interest to fraud investigators and forensic auditors: data mining techniques for the detection of internal fraud, ratio analysis for the detection of financial statement fraud, the issues surrounding external information sources, and computer forensics during fraud investigations. Questionnaires, personal interviews, and document review are the methods that were used to obtain data for this study. A sample of One hundred and fifty-three respondents from various categories of staff were used from ten commercial banks and four audit firms in Nigeria. The collected data were analyzed using application of non-parametric statistical tests. It was found that the forensic auditing departments suffer from multiple challenges, among them being the lack of material resources, technical know-how, interference from management, and unclear recognition of the profession. In conclusion, forensic auditors must be capacitated materially and technically to improve their effectiveness.

Keywords: Forensic Auditing, Accounting, Fraud, Commercial Banks

JEL Classification: G20

Suggested Citation

Alao, Bashir Babatunde and Odum, Augustine, Fighting Fraud in Nigeria Banking Industry. An Examination of the Impact of Forensic Auditing (December 31, 2019). International Journal of Academic Multidisciplinary Research (IJAMR) ISSN: 2643-9670, 2019, Available at SSRN: https://ssrn.com/abstract=3539549

Bashir Babatunde Alao (Contact Author)

Librod Energy Services Limited ( email )

Nigeria

Augustine Odum

Nnamdi Azikiwe University - Department of Accountancy ( email )

Awka, Anambra 23400
Nigeria

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