Forensic Audit And The Organizational Performance In Nigeria Deposit Money Bank

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Forensic Audit And The Organizational Performance In Nigeria Deposit Money Bank


The impact of Forensic audit and the organizational performance in Nigeria deposit money bank (a case study of UBA Bank) was investigated in this study. Three research questions were developed to do this. The study was conducted at UBA Bank in Abuja. In this study, the survey design and basic random sample procedures were used. The study’s sample size has been found to be 42 UBA employees. The questionnaire was used to collect data for the study, and the data was analysed using a frequency distribution table. According to the findings, forensic auditing is ineffective in detecting and preventing fraud in Nigeria; forensic litigation has a favourable influence on the recovery of assets lost due to fraud; and In Nigeria, the extent to which forensic auditing minimises fraudulent incidence is unacceptably low. Based on the findings, the researcher proposed that the Nigerian government, as well as the managements of businesses and non-profit organisations, improve the essential equipment, software, and other technology items to aid accountants in the identification and prevention of fraud. Furthermore, most accounting practises and practises in Nigeria are stagnated or out of date with trending skills and effective skills; hence, organisations should build training chances for accountants to get familiar with more effective abilities.

Table of Content

  • Title Page
  • Certification
  • Dedication
  • Acknowledgement
  • Table of Content
  • List of Tables
  • Abstract

Chapter One:


  • 1.1 Background of the Study
  • 1.2 Statement of the Problem
  • 1.3 Objective of the Study
  • 1.4 Research Questions
  • 1.5 Significance of the Study
  • 1.6 Scope of the Study
  • 1.7 Limitation of the Study
  • 1.8 Definition of Terms
  • 1.9 Organisations of the Study

Chapter Two:

Review of Literature

  • 2.1 Conceptual Framework
  • 2.2 Theoretical Framework
  • 2.3 Empirical Review

Chapter Three:

Research Methodology

  • 3.1 Research Design
  • 3.2 Population of the Study
  • 3.3 Sample Size Determination
  • 3.4 Sample Size Selection Technique and Procedure
  • 3.5 Research Instrument and Administration
  • 3.6 Method of Data Collection
  • 3.7 Method of Data Analysis
  • 3.8 Validity and Reliability of the Study

Chapter Four:

Data Presentation and Analysis

  • 4.1 Data Presentation
  • 4.2 Answering Research Questions

Chapter Five:

Summary, Conclusion and Recommendation

  • 5.1 Summary
  • 5.2 Conclusion
  • 5.3 Recommendation
  • References

Chapter One


1.1 Background of the Study

Forensic auditing, which is likewise called investigative accounting or extortion review, is a merger of criminological science and accounting. Legal science as per Crumbley (2003) “might be characterized as utilization of the laws of nature to the laws of man” and alludes to measurable researchers as analysts and mediators of proof and realities in lawful cases and offers specialists’ feelings with respect to their discoveries in the courtroom. The science being referred to here is accounting science, implying that the examination and understanding will be of monetary data.
Joshi (2003) characterized forensic auditing as the “utilization of particular information and particular aptitude to stagger up on the confirmation of monetary exchanges.” Zysman (2001) puts scientific accounting as the joining of accounting, inspecting, and investigative abilities. Basically, forensic auditing is accounting that is reasonable for lawful survey, offering the most abnormal amount of confirmation and including the now by and large acknowledged meaning of having been touched base at in a logical manner (Crumbley 2006). Coenen (2005) expressed that scientific accounting includes the use of accounting ideas and strategies to legitimate issues. It requests announcing where the responsibility of the misrepresentation is set up, and the report is considered as proof in the official courtroom or in the regulatory continuing (Joshi). It gives a accounting examination that is appropriate to the court, which will frame the premise of exchange, face off regarding, and eventually question determination (Zysman 2001).

This implies forensic auditing is a field of specialization that needs to do with the arrangement of data that is intended to be utilized as proof, particularly for legitimate purposes. The people honing in this field (i.e., legal accountants) explore and report money related misrepresentation and professional wrongdoings, for example, embez-zlement and research charges of extortion; appraise misfortunes, harms, and resources; and break down complex monetary exchanges. They give these administrations to corpo-proportion, lawyers, criminal examiners, and the Government (Coenen 2005). Their commitment is generally designed for finding where the cash went, how it arrived, and who was dependable. They are prepared to look past the numbers and manage business reality of the circumstance (Zysman 2001).

1.2 Statement of the Problem

Fake exercises in a business bank setting may negatively affect the reasonability, execution, maintainability and notoriety of advertisements banks. Cheats in Nigerian business banks have displayed a lasting issue to the business saving money administration and controllers alike. The event of false exercises in the business saving money area has been archived in different examples. For instance, as of late, the volume and recurrence of false practices in Nigerian banks have been on the expansion. As indicated by the Nigeria Deposit Insurance Corporation (NDIC), the level of announced misrepresentation in Nigerian banks ascended from N804m in 1990 to N3, 199m out of 1998. Moreover, the extent of genuine/anticipated that misfortune would the sum associated with misrepresentation ascended from 3 for each penny in 1990 to 22 for each penny in 1998. Maybe one of the most elevated misrepresentation at any point detailed in a specific year by a Nigerian bank happened in 1998 when United Bank for Africa plc discounted N786m because of extortion (Uche, 2001). Overseeing Director, Nigeria Deposit Insurance Corporation (NDIC), AlhajiUmaru Ibrahim said – in 2012 alone, store cash banks detailed an aggregate of 3,380 instances of endeavored misrepresentation and imitations including N18.04 billion to the organization, an aggregate loss of N4.5 billion was recorded amid the year under survey (2012). This speaks to a 43.7 for every penny rise contrasted with 2,352 cases in 2011. Along these lines, in the main quarter of 2013, 983 instances of endeavored misrepresentation including N7.80 billion was accounted for, while the genuine misfortune for the quarter was N2.05 billion. Ibrahim stated, digital related misrepresentation examples represented 341 cases bringing about a real loss of N75 million in the main quarter of 2013 (NDIC, 2013).

Managing an account misrepresentation is an issue to different partners. In the first place, it lessens the gainfulness of a bank and this may prompt decreased firm esteem emerging out of low profits to investors. In the extraordinary case, it might debilitate the going worry of the business bank and this may affect adversely on investor riches. The contributors might be contrarily influenced by bank misrepresentation particularly in the event that it prompts a bank run. This may prompt colossal misfortunes on client stores. Because of banking extortion, some staff in the business has either been rejected, or has their arrangement ended or rashly resigned. This implies some accomplished delivers the segments are lost because of their contribution in fakes and fabrications. The workers might be influenced by losing their activity if there should be an occurrence of twisting up or liquidation of a bank because of extortion.

Down turn in the Economy all in all, both the political and financial circumstance declined from terrible to more awful with naira seeing an uncommon downgrading of 1,300% inside five years. As at December 2008 and January 2009 the naira conversion scale with the remained between #149 to #150 per $1.Devil at that point discovered employment as sit still hands were intended to take part in one sort of extortion or the other while “419, cocaine pushing, billion naira bank cheats”, getting to be general highlights of our daily paper, Television and Radio features. (Ulokings back eco and occupations 2009)

Research on misrepresentation in business banks has gotten a great deal of academic consideration. A string of studies (Akindele, 2011);(Chi-Chi and Ebimobowei, 2012), Famous and Okoeguale,(2012),(Odi 2013) , have concentrated on the effect of extortion on business banks execution while another string has concentrated on the components affecting or fueling the event of misrepresentation (Idowu, 2009), (Nwaze, 2006), (Ovuakporie,1994), (Ogunleye,2010). In any case, none of these investigations have offered Forensic accounting as an answer for managing an account execution. This investigation contends that forensic accounting may have a part to play in keeping money execution. Along these lines, this investigation goes for inspecting the impact of legal accounting on the execution of Nigerian saving money segment.

1.3. Purpose of the Study

The aim of this study is to evaluate the Forensic audit and the organizational performance in Nigeria deposit money bank. The specific objectives of this study include the following;

  1. To examine the effect of forensic audit on the net profit margin of selected Nigerian banks.
  2. To evaluate the effect of forensic audit on profit after tax of Nigerian banks.
  3. To ascertain the effect of forensic audit on retained earnings and dividend per share of Nigerian banks..

1.4. Research Questions

In order to achieve the objectives of this study, the following research questions were raised to guide the research:

  1. To what extent is the effectiveness of forensic auditing in fnet profit margin of selected Nigerian banks?
  2. What is the effect of forensic litigation on on profit after tax of Nigerian banks?
  3. To what extent have forensic auditing affected retained earnings and dividend per share of Nigerian banks?

1.5 Significance of the Study

The study has the following significance:

  1. To the government, the study will enlighten the various governments on ways to give more power and responsibility to forensic accountants and auditors to checkmate fraud and reduce cost of operations.
  2. To the public, this study is aimed at enlightening the society on the function and operations of forensic auditing and significance of forensic auditing.
  3. To the business organization, it will enlighten them on the importance of forensic auditing in enhancing financial performance. It will also show them the mechanisms needed to improve the atmosphere for forensic auditing to carry out their function properly based on the findings.
  4. To the academia, it will enlighten it will provide support to their studies especially in the areas of forensic auditing.

1.6 Scope of the Study

This study covers only the Forensic audit and the organizational performance in Nigeria deposit money bank using UBA bank Abuja as case study.

1.7 Limitations of the Study

The major constrain of this study is time factors as the researcher had a little time frame to carry out this study. More so financial constrains and language barriers were also major key factors that limited this study.

1.8. Definition of Terms

Below are the definition of relevant terms of this study:


This is the process of recording financial transactions pertaining to a business. The accounting process includes summarizing, analyzing and reporting these transactions to oversight agencies, regulators and tax collection entities.

Forensic Auditing:

Forensic auditing, forensic accountancy or financial forensics is the specialty practice area of accounting that investigates whether firms engage in financial reporting misconduct. Forensic accountants apply a range of skills and methods to determine whether there has been financial reporting misconduct.


Fraud is an intentionally deceptive action designed to provide the perpetrator with an unlawful gain or to deny a right to a victim. Types of fraud include tax fraud, credit card fraud, wire fraud, securities fraud, and bankruptcy fraud.

Fraud Detection:

Fraud detection is a set of activities undertaken to prevent money or property from being obtained through false pretenses. Fraud detection is applied to many industries such as banking or insurance. In banking, fraud may include forging checks or using stolen credit cards.

Fraud Prevention:

Fraud prevention is the implementation of a strategy to detect fraudulent transactions or banking actions and prevent these actions from causing financial and reputational damage to the customer and financial institution (FI).

1.9 Organization of the Study

This research work is organized in five chapters, for easy understanding, as follows.

  • Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study.
  • Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.
  • Chapter three deals on the research design and methodology adopted in the study.
  • Chapter four concentrate on the data collection and analysis and presentation of finding.
  • Chapter five gives summary, conclusion, and recommendations made of the study.

Chapter Five

Summary, Conclusions and Recommendations:

5.1 Introduction

This chapter summarizes the findings into the Forensic audit and the organizational performance in Nigeria deposit money bank (A case study of UBA Bank. The chapter consists of summary of the study, conclusions, and recommendations.

5.2 Summary of the Study

In this study, our focus was to examine assess the Forensic audit and the organizational performance in Nigeria deposit money bank. The study specifically was aimed at examining the effectiveness of forensic auditing in fraud detection and prevention; assess the effect of forensic litigation on recovery of funds lost to fraud and investigate the extent to which forensic auditing have reduced fraudulent acts in Nigeria. The study adopted the survey research design and randomly enrolled participants in the study. A total of 30 responses were validated from the enrolled participants where all respondent are active staffs of UBA bank.

The findings of the study discloses that;

  1. The effectiveness of forensic auditing in fraud detection and prevention in Nigeria is practically low.
  2. Forensic litigation has a positive effect on the recovery of funds lost to fraud.
  3. The extent to which forensic auditing reduces fraudulent occurrence in Nigeria is unpalatably low.

5.3 Conclusions

With the increase rise in financial accounting fraud in the current economic scenario experienced, financial accounting fraud detection has become an emerging issue of great importance for academic, research and industries. forensic auditing is an effective tool in uncovering diverted fraudulent practices and can identify misappropriated asset and reversible insider transactions; this significantly influences fraud detection and control. Fraudulent practices are real and have become prevalent in contemporary business environment. From the findings, we conclude that despite the poor performance of forensic auditing in Nigeria, there is still need to enhance its field by training the accountants as much as to the level of being exposed and acquainted enough with the most effective technological products that will will tighten and strengthen forensic auditing in Nigeria than depending on outdated methods.

5.4 Recommendations

The Nigeria Government and managements of businesses and non business organizations should improvise the necessary equipment, software and other technological products that will assists accountants in fraud detection and prevention. More so, most practice and kills used by accountants in Nigeria are stalled or out of date with trending skill and effective skills therefore organizations should also establish training opportunities for the accountants to enable them get acquainted with more effective skills.

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