Forensic Accounting As A Tool For Fraud Prevention and Detection in Deposit Money Banks in Nigeria

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FORENSIC ACCOUNTING AS A TOOL FOR FRAUD PREVENTION AND

DETECTION IN DEPOSIT MONEY BANKS IN NIGERIA
Article · May 2019
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British International Journal of Education And Social Sciences
Vol.6, No.5; May- 2019
ISSN (3342 – 543X);
p –ISSN (4519 – 6511)
Impact factor: 7.85
FORENSIC ACCOUNTING AS A TOOL FOR FRAUD PREVENTION

AND DETECTION IN DEPOSIT MONEY BANKS IN NIGERIA
Oladipupo Festus OLAOYE (PhD) and Omolola Christiana ADEBAYO

Accounting Department, Ekiti State University, Ado-Ekiti, Nigeria
Correspoding author: Oladipupo Festus OLAOYE
Abstract: This study investigated forensic accounting as a tool for fraud prevention and detection in deposit money banks in
Nigeria. Objectively, the study examined the impact of forensic accounting on fraud prevention and detection in deposit money
banks in Ekiti State. The study adopted a descriptive survey design and a well-structured questionnaire was used to elicit the
needed data from the respondents. The population covered 12deposit money banksin Ekiti State and the components of the
population were 4 key staff (Head of operations, fund transfer officer, residentinternal control officials, and cash officials) in each
bank. All the 44 staff constituted the population of this study and considering the small size of the population, all the 44 staffs
were used for the study and this was achieved through purposive sampling techniques. The data collected were analyzed through
simple linear regression. It was discovered that forensic accounting impacted the detection and prevention of fraud in money
deposit banks in Ekiti State. Thus, the study recommended that forensic staffs ranging from head of operations, fund transfer
officer, resident internal control officials, and cash officials, should attend conferences and seminars within and outside the
country on the applicability of forensic accounting skills and techniques to prevent and detect fraud.
Keywords: Forensic Accounting, Fraud Prevention, Fraud Detection Deposit Money Banks
1.1 Introduction less efficient and effective in the control of fraudulent

Financial scandals in developed and developing countries are activities (Onuorah & Appah, 2012; Yahaya, Suleiman &
alarming and the expected trust in the financial statements of Abba, 2018).
organizations seems to be jettisoned by investors whose trust Chi-Chi and Ebimobowei (2016) affirms that Nigerian
has been betrayed over the years. Undoubtedly, financial banking sector is one of the most controlled and regulated
scandals greatly affect both employers and employees and in sectors. In spite of this, financial crimes such as
turn affect the overall performance of a nation’s economy embezzlement, bribery, bankruptcy, security fraud among
(Imam, Kumshe and Jajere, 2015). This is apparent in the others appears to have taken the center stage and it seems that
downfall of WorldCom and Enron where many employees financial auditors do not have what it takes to detect and
lose their jobs, citizen’s trust in the American economic prevent fraud any longer. Detection is the act of noticing or
system was destroyed and banks were suspected of collusion sensing something and also to discover or catch (a person) in
(Apostolou& Crumbley, 2005). the performance of some acts. This means the action or
Fraud seems to be an integral part of every organization process of identifying the presence of something concealed
manifesting in different magnitude and sources. According to (Howard & Sheetz, 2006).
Adamu (2015) and Adebisi, Okike and Yoko (2016), fraud is On the other hand, prevention means the act of stopping
anything calculated to deceive, whether by a single act or something from happening or stopping someone from doing
combination, or by suppression of the truth, or suggestion of something (Ehioghiren & Atu, 2016; Okunbor & Obaretin,
what is false, whether it is by direct falsehood, by speech or 2010). Over the years, fraud prevention and detection seem to
silence, word of mouth, look or gesture. Its commonness in be difficult because perpetratorsappear to be sharper than the
modern entities has made traditional investigation and auditing auditors saddled with the onus of fraud detection and

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prevention. Attesting to this, Owojori and Asaolu (2009) and Edebiri (2015), Owojori and Asaolu (2009) and Kasum
submitted that fraud is not easily proven since frauds have (2009) have all acknowledge in their separate works, the
themselves a safe line where authority could not convict them. increasing incidence of fraud and fraudulent activities in
This shows that fraudstersare always smarter and auditors are Nigeria, and equally argued that in Nigeria, financial fraud is
not exclusive of mistakes in their operational activities. gradually becoming a normal way of life. However, none of
In 2017, fraud incidences and amount involved stood these studiesfocused on the impact of forensic accounting
at₦12.01 billion in 2017, compared with ₦8.68in 2016and services on fraud prevention and detection using Deposit
₦18.02 billion in 2015, respectively.While the figure was Money Banks (DMBs) in Ekiti State as the study elements.
relatively lower compared with 2015, it was different with the This, therefore, constitutes the gap of this study. Hence, the
incidences of frauds and forgeries recorded in 2016. The study is designed to examine forensic accounting as a tool for
number of fraud cases and amount involved remained fraud detection and prevention in Deposit Money Banks
historically high, while efforts were being made to stem the (DMBs)in Ekiti State. The rest of the paper is divided into
tide through adequate supervisory foresight and interventions four sections. Section 2 covers the review of the literature,
by the authorities, as well as initiatives by the respective Bank section 3 centers on the research methodology, section 4
Management to broaden the depth of internal control presents and discusses the results of the analysis, while the last
processes. section, section 5, concludes the paper.
It seems that financial accountants and auditors saddled with 2.0Literature Review
the responsibilities of revealing the true and fair view of 2.1 Conceptual Issues
financial reports have failed in their statutory obligations; and 2.1.1 Forensic Accounting
evidently lead to the increase in corporate crime that breed Forensic Accounting has been defined by numerous scholars.
pressure on the professional accountants and auditors(Okafor Manning (2005) defined Forensic Accounting as the
&Agbiogwu, 2016). With the spotlight on the accounting integration of investigative techniques, accounting, and
profession, a new breed of accountants called Forensic auditing skills required by a court of jurisdiction to address
Accountants has come up. Damilola and Olofinsola (2007) issues that revolve criminal litigation. Similarly, Coenen
described Forensic Accounting as the application of (2005) referred to Forensic Accounting to the application of
criminalities methods and integration of the accounting accounting concepts, auditing skills, and techniques of legal
investigative activities and law procedures to detect and problems to uncover financial scandals in organizations.
investigate financial crimes and related economic misdeeds. Forensic Accounting is the applications of expert knowledge
This means Forensic Accounting activities are capable of and definite expertise to stumble upon the proof of economic
fraud control in organizations. transactions (Enofe, Agbonpolour, and Edebiri, 2015). These
Fraudulent financial report seems to weaken thorough definitions reveal that Forensic Accountants go beyond the use
economic view of DMBs in making profitable decision. of accounting and auditing skills to uncover fraud; Forensic
Importantly, the category of fraud committed in these banks Accountants are the financial detective with a suspicious
cause the highest amount of losses which distort the financial mind, people with a ‘sixth sense' that enables restoration of
truth in order to obtain certain advantages or hide the possible historical accounting dealings and people who look beyond
or negative performance to deceive the users of financial the numbers
statement. Therefore, if banks must perform efficiently, Forensic Accounting means the amalgamation of auditing,
effectively and contribute meaningfully to the development of accounting, and investigative skills to attain a definite result.
a country economy, the industry must be safe, stable and Corroborating this definition, Rassey (2001) defined Forensic
sound. For these to be achieved there is a need for forensic Accounting as the use of accounting, auditing and analytical
accountants who will ensure strong system of internal control, techniques to reveal fraudulent activities in an entity. In the
compliance with banking ethics and good corporate opinion of Ramaswamy (2005), Forensic Accounting revolves
governance practices. analyses that can reveal fraudulent activities worthy of court
Studies like Oladejo and Oluwaseun (2015), Okoye and Gbegi presentation. He asserted that such analysis would form the
(2013), Okafor and Agbiogwu (2013), Enofe, Agbonpolour background for dialogue, deliberation and dispute resolution.

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Moreover, forensic accounting revolves using accounting, Fraud prevention is the anticipation, recognition and appraisal
auditing, and investigative skills to uncover possible fraud that of a crime risk and the initiation of some action to remove or
is suitable for presentation in court. reduce it. It is an attempt to reduce and deter crime and
2.1.2 Fraud, Prevention and Detection criminals. Fraud prevention is defined as the anticipation, the
Fraud is a universal phenomenon that has been in existence for recognition, and the appraisal of a crime risk and the initiation
a long time. Describing fraud is as demanding as detecting it. of action to remove or reduce it (Arokiasamy and Cristal,
No certain and unchanging rule can be laid down as a 2009). It is applied specifically to efforts made by
universal proposition in defining fraud as it includes trick, governments and other concerned authority to reduce crime,
surprise, crafty and prejudicial ways by which an individual is enforce the law, and maintains criminal justice.
cheated. Nwankwo (2013) observed that fraud is a 2.1.3 An Overview of Deposit Money Banks
premeditated act that causes an entity to suffer damages, often Banks act as intermediaries in the economy by accepting
in the form of monetary losses. According to Howard and financial deposits from individuals, businesses, financial
Sheetz (2006), fraud means deliberate or rather a purposeful institutions, and sovereigns with surplus savings. Banks then
misrepresentation of fact in order to trick or deceive an advance these deposits in the form of credit loans to
individual or a company. Moreover, financial fraud is an individuals, financial institutions, investors and governments
intentional act by a criminal-minded people to falsify facts or that need the capital for various investment and spending
figures with the so aim of cheating or rather defrauding a purposes. Investment activities by banks are hardly deprived
company or an individual. of problems and risks since banks seek to maximize expected
Fraud is an activity that takes place in a social setting and has profits on their investments, which requires optimal
severe significances for the economy, companies, and exploitation of resources available to banks. Since banks are
personalities. It is an opportunistic infection that bursts forth required to meet the liquidity needs of their clients and
when greed meets the possibility of deception (Owojori and depositors, they thus are expected at any moment to deliver on
Asaolu, 2009). Fraud according to Black law Dictionary 1997 those obligations (Alshatti, 2015). Banks regularly keep a
in Okoye and Gbengi (2013), includes all the multifarious large number of short-term liabilities, which can be withdrawn
means human ingenuity can devise that is resorted to by the by the public when their confidence in the bank declines.
individual to get an advantage over another by false Depositors and its clients may question the soundness and
suggestions or suppression of the truth. Fraud in bank affects creditability of the bank, if it fails to meet their immediate
the foundation and integrity of most banks in Nigeria. It liquidity needs.
greatly affects the profit level of banks and invariably the so A money deposit bank is a business establishment granted a
cause of shareholders disloyalty. Bank frauds are generally license by the central bank to trade in money and keep
bringing untold hardship on bank owners, staff, customers and valuables for members of the public (Molefe & Muzindutsi,
family members as most bank failures are always associated 2016). Deposit money banks are joint-stock companies that
with the large scale of frauds. aid trade by trading in money and monetary securities. They
Detection is the act of noticing or sensing something and also accept deposits from the public and give out loans to borrow.
to discover or catch (a person) in the performance of some Deposit Money banks are banking institutions that accept
acts. This means that the action or process of identifying the deposit and grant short-term loans and advances to their
presence of something concealed (Howard and Sheetz, 2006). customers. In addition to giving short-term loans, deposit
On the other hand, prevention means the act of stopping money banks also give medium-term and long-term loans to
something from happening or stopping someone from doing business enterprises (Molefe & Muzindutsi, 2016).
something (David, 2005). As earlier defined, fraud is a legal Furthermore, deposit money banks also give housing loan on a
term that refers to the intentional misrepresentation of the truth long-term basis to individuals. This implies that a Deposit
in order to manipulate or deceive a company or individual Money bank is a profit-seeking business firm, dealing in
(Coenen, 2005). This implies that fraud is to create a money and credit. It is a financial institution dealing in money
misjudgment or maintain an existing misjudgment to induce in the sense that it accepts deposits of money from the public
somebody to make a contract. to keep them in its custody for safety.

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2.1.5 Recent Volume and Value of Frauds and Forgeries in  Investigation of employee theft
DMBs  Establishing effective lines of communication
The number of reported cases of attempted frauds and  Ensuring regulatory compliance
forgeries in the nation's banking industry witnessed a  Monitoring and evaluation of internal control systems
substantial increase to 26,182 cases in 2017, which was an 2.2 Theoretical Framework
increase of 56.30% over the 16,751 cases reported in 2016. The theory that guided this study is the “theory of fraud
The frauds and forgeries cases reported in 2017 also showed a diamond.” Wolf andHermanson (2004) introduced the fraud
146.50% and 113.20% increase over reported cases in 2014 diamond model where they presented another view of the
and 2015, respectively (Nigeria Deposit Insurance factors to fraud. The theory adds the fourth variable
Corporation, NDIC, Annual Report, 2017). The actual "capabilities" to the three-factor theory of the fraud triangle.
amount lost to fraud incidences in 2017 stood at ₦2.372 Wolf and Hermanson believed many frauds would not have
billion, but was lower by 1%, 25.20% and 61.70% compared occurred without the right person with the right capabilities
to figures recorded in 2014, 2015 and 2016, respectively. The implementing the details of the fraud. Opportunity opens the
marginal decline in the trajectory of fraud losses could be doorway to fraud and incentive. Using the four-element fraud
attributed to improved regulatory/supervisory oversight, diamond, a fraudster thought the process might proceed as
relative increase in vigilance by DMBs, adoption of more follows:
robust internal control procedures, and the deployment of  Incentive: I want to, or have a need to commit fraud
improved security architecture in the banking industry (NDIC  Opportunity: There is a weakness in the system that
Annual Report, 2017). The continued cooperation and the right person could exploit fraud is possible.
collaboration amongst regulatory/supervisory authorities and  Rationalization: I have convinced myself that this
the financial institutions could also be responsible for the fraudulent behavior is worth the risks.
increasing decline in the success rate recorded in frauds in  Capability: I have the necessary traits and abilities to
2017. In a tabulated form, the breakdown of Recent Volume be the right person to pull it off. I have recognized this
and Value of Frauds and Forgeries in DMBs particular fraud opportunity and can turn it into reality.
Table 1: Recent Volume and Value of Frauds and While these four elements certainly overlap, the primary
Forgeries in DMBs contribution of the fraud diamond is that the capabilities to
Total Proportion of Expected commit fraud are explicitly and separately considered in the
Year Total No. of Fraud Cases Amount Total Actual Loss (N’m) Loss to Amount Involved (%) assessment of fraud risk. By doing so the fraud diamond
Involved (N’m) moves beyond viewing fraud opportunity largely in terms of
2017 26,182 12,012 2,372 19.75 environmental or situational factors, as has been the practice
2016 16,751 8,683 2,396 27.6 under current and previous auditing standards.
2015 12,279 18,021 3,173 17.61 The fraud diamond theorists were of the opinion that when
2014 10,621 25,608 6,192 24.18 people perform a certain function repeatedly, such as bank
Source: Nigeria Deposit Insurance Corporation, NDIC, reconciliations or setting up new vendor accounts, their
Annual Report, (2017). capability to commit fraud increased as their knowledge of the
2.1.4 Major areas of Application of Forensic Accounting in function's processes and controls expands over time.
Money Deposit Banks Secondly, the right person for fraud is smart enough to
According to Omondi (2013), forensic accounting can be understand and exploit internal control weaknesses and to use
applied in the following ways: position, function or authorized access to the greatest
 Controlling financial statement frauds advantage.
 Prevention of scandals in the bank Forensic accountants have to keep in mind that
 Enhancing the quality of financial reporting pressure/motive to commit fraud can be either personal
 Guarantee the well-being of the bank pressure, employment pressure, or external pressure and each
 Uncovering economic bank crimes of these types of pressure can also happen because of financial
 Controlling electronic crimes and non-financial pressure. Forensic accountants also need to

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understand the opportunity for fraud to help them in through questionnaire and interviews from thirteen
identifying which fraud schemes an individual can commit commercial banks, four audit firms and four building
and how fraud virus occurs when there is an ineffective or societies. The analysis carried out through frequency and
missing internal control percentage revealed that forensic accounting is faced with
2.3 Empirical Review many problems hence; it has not been useful in the detection
Going through the existing literature, one would notice that and prevention of fraud in Zimbabwe. This implies that
forensic accounting is universally accepted to aid the detection employment of Forensic Accountants without adequate
and prevention of fraud.In Brazil, Imoniana, Antunes, and provision of material resources would produce no desired
Formigoni (2013) examined the features of Forensic result. This study is similar to this present study. However,
Accounting services carried out by accounting firms; using an there was a bit distinction because this present study used
exploratory approach. Their findings revealed that the inferential statistics of simple linear regression whereas the
knowledge of Forensic Accounting skills and techniques previous study used descriptive statistics of frequency and
helped auditors to more productive in the detection and percentage.
prevention of fraud. Correspondingly, Bressler (2011) studied Enofe, Okpako, and Atube (2013) undertook a study to
the perception of attorney and judges in the court system as to examine the impact of forensic Accounting on fraud detection.
what might enhance understanding of the role of forensic The broad objective was to determine the nexus between fraud
accountants in fraud investigation. The researchers employed detection and forensic accounting. The study adopted a survey
conceptual analysis and found that forensic accountants must research design and a well-structured questionnaire was used
be well trained in the rules of evidence, financial data, to elicit the needed data from the sample respondents. The
accounting information system, software and communication data collected that was analyzed through descriptive statistics
skills. of frequency and percentage and inferential statistics of simple
In Bangladesh (2011), Islam (2011) examined the forensic linear regression and Chi-square revealed that both forensic
accounting profession and corruption reduction in the banking accounting and fraud detection moved in the same direction,
sector. The study was descriptive research of a survey type indicating that the application Forensic Accounting affects the
and questionnaire was used to gather the needed data that was fraudulent activities. This present paper enlarges the study of
later analyzed through a simple percentage and simple Enofe, Okpako, and Atube with the incorporation of fraud
regression. The outcome confirmed that Accountants had used prevention. This study was designed to ascertain the impact of
the skills of forensic accounting to detect frauds. In the same Forensic Accounting on fraud detection and prevention in
line Luke (2013) undertook a study to ascertain whether the commercial banks in Ekiti State.
application of forensic accounting could be used as a tool to With the aim of examining the influence of Forensic
increase confidence in auditor’s report. In the analysis of data, Accounting in the management of fraud in banks, Okafor and
descriptive statistics were used in the study. He administered Agbiogwu (2016) examined the effect of Forensic Accounting
400 questionnaires on firms of auditors, legal practitioners' Skills on the management of bank fraud in Imo State. The
and computer experts. He found that the application of study was a survey type and both secondary and primary data
forensic audit could significantly detect frauds perpetrated were gathered in a bid to know the effect of Forensic
through thumbprint and signatures. Obviously, these studies Accounting on the management of fraud in Nigeria. The data
are similar to this presentstudy only that the previous study collected that were analyzed through ANOVA revealed that
used only descriptive statistics while this present study used Forensic Accounting skills significantly reduce the occurrence
inferential statistics of simple linear regression. of fraud in the banking sector. The study was limited to Imo
In the regional font, a lot of studies have been carried on State and other States of the federation were sidelined. To
Forensic Accounting and detection and prevention of fraud. generalize their findings that forensic accounting reduces
For example,Kosmas,Thulani, and Mashanye (2009) financial fraud, it is important or rather necessary to carry out
examined the effectiveness of forensic auditing in detecting the same study in other States. Invariably, this is on the gaps
and preventing bank fraud in Harare, Zimbabwe. It was this present study is bridging.
descriptive research of a survey type and data was collected

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Similarly, Enofe, Agbonpolour, and Edebiri (2015) carried out Skills in the detection and prevention of fraud in the banking
a study on Forensic Accounting and financial fraud. It was sector using simple linear regression and not ANOVA used in
descriptive research of a survey type and study needed data the previous study.
was elicited through a well-structured Likert scale In the current empirical study, Modugu and Anyaduba (2013)
questionnaire; the data collected was analyzed through non- examined forensic accounting and financial fraud in Nigeria.
parametric statistical technique. Major in their discoveries was The study employed survey design in a sample size of 143
that Forensic Accounting skills are essential for addressing consisting of accountants, management staff, practicing
financial crimes in the banking section in Nigeria. Instead of auditors and stakeholders. The authors employed a binomial
non-parametric statistical technique, simple linear regression test for data analysis and found that there is a significant
is used in this present study. Similarly, the previous was void agreement amongst stakeholder on the effectiveness of
of any theoretical underpinning and this present study was forensic accounting in fraud control, financial reporting and
based on the theory of fraud diamond internal control quality. Similarly, Onuorah and Ebimobowei
More evidence revealed that forensic accounting skills help to (2011) employed survey design to examine the effect of
reduce financial crime not only in the banking sector but also forensic accounting services in fraud detection in Nigeria
in the public sector in Nigeria. Okoye and Gbegi (2013) banks by the use of Augmented Dickey- fuller, ordinary least
studied Forensic Accounting as a tool for fraud detection and square, and Granger Causality test. The result revealed that the
prevention in public sector organizations in Kogi State. It was application of forensic accounting services affects the level of
a survey design study and data generated through primary and fraudulent activities of banks. Clearly, these studies are similar
secondary data. Primarily, a well-structured questionnaire was with this present study only the previous studies used binomial
used to elicit the necessary data from the sample respondents test and Augmented Dickey- fuller, ordinary least square and
and analyzed was based ANOVA. 370 questionnaires were Granger Causality test for data analysis while the present
administered to staff of five (5) selected ministries in the Kogi study used simple linear regression analysis.
State of Nigeria, along with interviews conducted with those 2.4 Summary of the Literature
ministries. The study discovered that there is a significant Literature affirmed that fraud is an integral part of every
difference between Professional Forensic Accountants and organization and its consequence, especially in the banking
Traditional External Auditors and therefore the use of sector, is always grievous. Scholarly submission reveals that
Forensic Accountants can help better in detecting and perpetration of fraudulent activities in the banking industry is
preventing fraud cases in the public sector organizations. This mostly on financial statement which has a multiplier effect on
present study was carried out in commercial banks in the Ekiti quality financial reporting.Theoretically, it was gathered that
State. fraudulent activities always pass through four stages namely
To ascertain the usefulness of Forensic Accounting in anti- capabilities, pressure, opportunity and rationalization. The
corruption agencies in Nigeria, Gbegi and Adebisi (2014) explanation holds that before fraud could take place, fraud
examined Forensic Accounting Skills and Techniques in fraud perpetrators must have the required capabilities; feel
investigation in the Nigerian public sector. The study was a pressurized; perceive opportunity and formulate some morally
survey type and the population covered 129 staff of EFCC, acceptable idea to him before engaging in unethical behavior
ICPC, and CCB. To gather the needed data for the analysis, a (rationalization). That is, if opportunity opens the doorway to
questionnaire was used for the primary data while secondary fraud, incentive and rationalization draw the person toward it,
data was collected from the agencies. The result of the the person must have the capability to recognize the open
analysis that was carried out through ANOVA revealed that doorway as an opportunity and to take advantage of it by
Forensic Accounting skills and techniques are indispensable walking through, not just once, but time and time
for more effective and efficient investigation of suspected and again.Undoubtedly, there are many studies on how forensic
confirmed fraud cases. In the same vein, this study confirmed accounting could enhance fraud detection and prevention in
the usefulness of Forensic Accounting in the public sector. In different sectors of the economy. However, to the best of the
a bid to push forward the frontier of knowledge, the present researcher’s knowledge, none of these studies have been
study is set out to examine the impact of Forensic Accounting carried out on Deposit Money Banks (DMBs) in Ekiti State

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which constitutes the study area of this study. This, therefore, Equation 1
raises a question if fraudulent activities are exclusive of 𝐹𝑃𝛼0 + 𝛼1 𝐹𝐴 + 𝑈
Deposit Money Banks (DMBs) in Ekiti State. Hence, the study ……………………………………..………………..… (3)
is designed to examine forensic accounting as a tool for fraud Equation 2
detection and prevention in Deposit Money Banks (DMBs) in 𝐹𝐷 = 𝛼0 + 𝛼1 𝐹𝐴 + 𝑈
Ekiti State. ……………………………..………………………. (4)
Methodology 𝛼0 = Intercept
The study adopts a descriptive survey design. The design is 𝛼1 = Coefficient of the Independent variable
considered suitable for the study because it involves gathering U= Captures other variable not included in the model and it
data from members of the population in order to determine its takes care of other factors that cannot be observed or
current status in regard to one or more variables. The computed due to lack of data. The a priori expectation was
population of this study covered all 11Deposit MoneyBanks there would be a positive relationship between the dependent
(DMBs) in Ekiti State (First Bank, UBA, Fidelity Bank, and independents variables of the study.
Zenith Bank, Union Bank, Sky Bank, Sterling Bank, Wema 4.0 Empirical Result
Bank, Diamond Bank, Eco Bank and Access Bank). The 4.1 Regression Analysis
components of the population entail of 4 key staff in each Hypothesis 1: There is no significant impact of forensic
bank, namely the Head of operations, fund transfer officer, accounting on fraud detection in deposit money banks in
Resident internal control officials, and Cash officials. Hence, Ekiti State
forty-eight (44) staff constituted the population of this study. Table 2: Regression analysis of the impact of forensic
Considering the small size of the population, all the 44 staffs accounting on fraud detection in deposit money in Ekiti
are used for the study and this was achieved through purposive State
sampling techniques.It was purposive because the selection Dependent Variable: Fraud Detection
process of the respondents was judgmental in relation to their Model coefficients Std Error R R2 F Prob
expertise and knowledge about forensic accounting. Primarily, Constant 2.016 0.231 0.419 0.175 25.11 0.00
Forensic 0.373 0.074 4 0
a well-structured questionnaire was used to elicit data from the
Accounting
sampled respondents. To authenticate the items on the
Skills
questionnaire,validity, and reliability of the instrument were
Source: Author’s Computation, (2019)
carried out accordingly; and it was gathered throughCronbach
The estimated result presented in table 1 revealed a coefficient
Alpha that the instrument was suitable for the work with 0.78
estimate of 0.373 alongside probability value of 0.000 for
reliability coefficient.The data collected were analyzed
fraud detection. The result showed that Forensic Accounting
through simple linear regression.
exerts a significant positive impact on fraud detection in
Model Specification
deposit money banks in Ekiti State, reflecting that fraud
Model 1
detection increase of the 0.373 units following the application
FP =
of forensic Accounting skills and techniques. The r-squared
f(FA)…………………………………………………………
value reported in table 1 stood at 0.175 and it implies that
………. (1)
about 17.5% of the systematic variation in fraud detection can
Model 2
be explained by the application of forensic Accounting skills
FD =
and techniques.
f(FA)…………………………………………………………
Hypothesis 2: There is no significant impact of forensic
………. (2)
accounting on fraud prevention in deposit money banks in
Where:
Ekiti State;
FP = Fraud Prevention
Table 2: Regression Analysis of the Impact of Forensic
FD = Fraud Detection
Accounting on Fraud Prevention in deposit money Banks
in Ekiti State
The Equations of the models were given below:
Dependent Variable: Fraud Prevention

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Model coefficients Std R R2 F Prob The study examined the impact of forensic accounting on
Error 0.692 0.479 108.34 0.000 fraud detection and prevention in deposit money banks in Ekiti
Constant 1.281 0.195
State. Based on the discoveries made, itcan be concluded that
Forensic 0.635 0.061
Accounting forensic accounting could serve as a tool to prevent fraud in
Source: Author’s Computation, (2019) deposit money banks in Ekiti State; and that forensic
In table 2 above, the R-square, which showed the overall accounting could help to detect fraud in deposit money banks
explanatory power of the model, revealed that the independent in Ekiti. Thus, the study recommended that forensic
variable explained about 47.9% of the systematic variation of accounting should be welcomed by all and sundry in money
the dependent variable. The overall fitness of the model as deposit banks in Ekiti state. In the same vein, staffs, ranging
shown in the F statistics of 108.34 with a probability value of from head of operations, fund transfer officer, resident internal
0.000 was statistically significant as it was lesser than the control officials, and cash officials, should attend conferences
standard critical p-value of 0.05. The linearized functional and seminars within and outside the country on the
specification of the model was appropriate. Therefore, the null applicability of forensic accounting skills and techniques to
hypothesis was rejected and the alternative hypothesis prevent fraud and detect whenever it is perpetrated.
accepted, and this implies that there is a positive significant
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Vol.6, No.5; May- 2019
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p –ISSN (4519 – 6511)
Impact factor: 7.85
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pg. 25
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FORENSIC ACCOUNTING AS A TOOL FOR FRAUD PREVENTION

Oladipupo Festus OLAOYE (PhD) and Omolola Christiana ADEBAYO

1.1 Introduction less efficient and effective in the control of fraudulent

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