Does Forensic Accounting Enhance Quality Of Financial Reporting In Nigeria? : An Empirical Investigation (Published)
This study examines the effectiveness of Forensic Accounting in engendering qualitative financial reporting in Nigeria using the banking sector as a reference. The research adopted empirical, survey and descriptive approach. Secondary data for this study were sourced from the annual reports of the chosen banks. Simple five scale binomial ranging from 0-4 were used to analyse the secondary data (financial reporting quality) of the selected banks. Primary data were also sourced to elicit information from accountants using structured questionnaire based on Likert 5-Scale with each containing fifteen questions. A five scale Likert structured questionnaires were administered to a sample size of Two Hundred and Fifty respondents. Respondents were chosen by simple stratification. Pearson’s Correlation Coefficient statistical tool was used to analyse the primary data. The study reveals that the fundamental qualitative characteristics (relevance and faithful representation) of financial reporting accounting and the enhancing qualitative characteristics (understandability) can be significantly enhanced through Forensic Accounting. Analysis of the primary data further attested to the above revelations. To this end, the researcher recommends that relevant regulators of accounting practice in Nigeria such as the Financial Reporting Council of Nigeria and other relevant accounting bodies should ensure that forensic accounting be deeply entrenched to enhance the quality of financial statements and indeed the financial reporting system in Nigeria. Key industrial regulators such as the Central Bank of Nigeria, NDIC, SEC and so on should at regular intervals commission forensic accounting to ensure compliance on the key variables such as relevance, faithful representation, understandability and so on by the annual reports submitted to them by agencies of government and the organised private sector. They should also train and re-train their members on the intricacies of forensic accounting as regards these variables to enhance the utility capital providers and other stakeholders derive from financial reporting in Nigeria.
An Empirical Investigation of the Relevant Skills of Forensic Accountants: Experience of a Developing Economy (Published)
Accounting frauds and scams are perennial. They occurred in all eras and in all countries, and affected many organizations, regardless of their size, location, or industry. From Enron and WorldCom in 2001 to Madoff and Satyam in 2009, accounting frauds and scams have been dominating news items in the past decade. Corporations and regulatory bodies are trying their best to analyze and correct existing defects in their reporting system. After having an overview of the fraud scenario in India, it is apparent that criminals have become technology-savvy, and invented newer schemes to perpetuate crimes. In the current reporting environment of “digital-age,” forensic accountants (FA’s) are in great demand for their ‘niche’ accounting, auditing, legal and investigative skills. Hence, ‘forensic’ accounting has been thrown in the forefront of the crusade” against financial deception and accounting scandals.The present study investigates through a questionnaire, which was conducted in three leading States of the national capital region (NCR) of India during 2011-12, “if there are differences in the views of the relevant skills of FA’s among accounting practitioners, academics, and users of forensic accounting services.” From the statistical test of the hypotheses propounded for this study, we discovered that “core skills are not enough requirements for FA’s, there are significant differences in the relevant skills of FA’s, as given by previous researchers with the current research, and the necessary skills of FA’s, as identified by both academics and professionals, will hopefully meet employers’ expectations too.” Therefore, FA’s, being professional experts having ‘sixth’ sense and possessing ‘special’ skills are urgently required to counter all the ingenuity of these criminals. At present, some Universities in India are considering adding forensic accounting course to their curriculum. The results of this study may provide some guidance to educators for the development of forensic accounting curriculum by identifying the pertinent skills to accompany such a program of study.