Forensic Accounting and Fraud Detection in Deposit Money Banks (DMBS) in Nigeria

Abstract

This study investigated the effect of forensic accounting on fraud detection in listed deposit money banks in Nigeria. The study specifically employed three key independent variables of usefulness of adopting forensic accounting (UAFA); adherence with forensic accounting practices (AFAP), and effectiveness of forensic accounting processes (EDAP) to proxy forensic accounting, while the dependent variable was measured with trends in fraud detection (TFD). Employing a quantitative approach, the study utilized secondary data sourced from financial statements, regulatory reports, and documentary analyses of selected banks covering the period of 2011 to 2023. Preliminary tests were conducted using the Augmented Dickey-Fuller to determine the level of integration of the variables of interest. Subsequently, upon the finding of the unit root test, the data were estimated using multiple regression analysis. Results indicated the beneficial effects of integrating forensic accounting practices, demonstrating a positive correlation between adherence to forensic accounting principles and enhanced fraud detection within listed deposit money banks in Nigeria. The study concluded that investing in forensic accounting is crucial for bolstering fraud detection efforts within these banks. It was then recommended that banks should prioritize training and development programs to enhance the forensic accounting skills of internal staff.