forensic accounting slide (2)

8/21/2019 Forensic Accounting Slide (2)

1/15

SYNDICATE 3Kinanty

Nabilah

Raden Indra

Selvia Herlina

Forensic Accounting Financial Fraud

In Nigeria An Emprical Approach


2/15

Transparency Internationals 2013 Corruption Perceptions Index (CPI) rankedNigeria 144 out of 177 countries and territories surveyed.

Nigeria

Background (CPI Rank)


3/15

Banking

Sector

Development

FinancialFraud

Activity

Increasing

Need forForensic

Accounting

Backgroud (Problem)


4/15

The important challenge to the application of

forensic accounting in Nigeria

1

The law is not always up to date with thelatest advancements in technology.

2

Forensic accounting is seen as an expensiveservice that only big companies can afford.

3

Risk of bad publicity on their corporateimage.


5/15

The Purpose of the study

Is there significant agreement on the effectiveness offorensic accounting in financial fraud control?

Is there significant agreement on the effectiveness offorensic accounting in improving financial reportingquality?

Is forensic accounting effective in improving internalcontrols?


6/15

The integration of accounting, auditing and investigative skills yields thespecialty known as Forensic Accounting.

Forensic accounting is a discipline that has its own models and methodologies of

investigative procedures that search for assurance, attestation and advisory

perspective to produce legal evidence.

The activities of forensic accountants involve: investigating and analyzing financial

evidence; developing computerized applications to assists in the analysis and

presentation of financial evidence; communicating their findings in the form of

reports, exhibits and collections of documents; and assisting in legal proceedings,

including testifying in courts as an expert witness and preparing visual aids to

support trial evidence.

Forensic Accounting


7/15

Nature offraudsters

External

Financial Fraud

Asset

Financial

Reporting

Conflict of

Interest

Bribes

cronyism

MethodEmployed

Internal

Mixed fraud


8/15

QUALITY FINANCIAL REPORTING

Incompleteinformation

-

Uncertainty

creates risk

- Risk motivates

investors to

demand a higherrate of return

-

In a higher

cost ofcapital

-

what happens when financial reporting does not tell

the whole story?


9/15

Internal Control


10/15

Accountant

Auditor

Top ManagementSatff

Sampling Random

Primary data

Questionaire

Non-parametric test

143 Respondents Auditor

Prepares User

academic

Population Sample

RespondentsData

Methodology


11/15

Female,

55.90%

Male,

45.10%

M.SC

37%

B.SC/H.ND

47%

OND

16%

Self-employed,

24.48%

Work in public

firm, 44.76%

Work in

private firm,35.66%

20-30, 19.58%

31-40, 43.40%

41-50, 20.97%

51-Above,

16.08%

Figure 1 Sex Distribution of the respondents Figure 2 Age Distribution of the respondents

Figure 3 Educational Qualification of the respondents Figure 4. Employment status of the respondents

Source: Researchers survey, 2012

Presentation of Result


12/15

Statistical Test

Cronbach Alpha Number of Items

.876 15

Table 1. Cronbach Reliability Test

Source: SPSS 20.0

Table 2. Forensic accounting and financial fraud controlItems Mean S.D

1 Forensic accounting can be used to locate diverted funds or assets 4,80 0,49

2Forensic accounting can Identify misappropriated assets and identify reversibleinsider

transactions;4,06 0,45

3 forensic accounting is effective as a fraud detection tool 4,12 0,874 Forensic Accounting is solely enough as a tool to detect suspicious or fraudulent transactions 3.21 1,10

5 Risk assessment processes under forensic accounting specifically cover risk of fraud. 4.64 0,56

Source: SPSS 20.0

Table 3. Forensic accounting and internal control qualityItems Mean S.D

6 Designing internal control system 4,6 0,49

7 Monitoring and evaluation of internal control systems 4,84 0,37

Table 4. Forensic Accounting and financial reporting credibilityItems Mean S.D

8 Enhancing quality of financial reporting 4,64 0,89

9 improves stakeholder confidence in corporate financials 4,32 0,62

10 Accountants/auditors with forensic accounting skills will deliver more quality financial reporting. 4,56 0,50

11.Forensic investigations deals directly with fraud investigation and this reduces financial reporting

expectations gap4,40 0,571

Source: Researchers computation, 2013


13/15

Test ResultTable 5. Binomial test result of the effect of forensic accounting on financial fraud control,

financial reporting quality and internal control

(1) (2) (3) (4) (5) (7)

H1: Financial fraud control Disagreeing

Agreeing

Total

30

113

143

0,21

0,79

100

0,50 confirmed

H2:Fincancial reporting quality Disagreeing

Agreeing

Total

50

93

143

0,35

0,65

1,00

0,50 Confirmed

H3: Internal control Disagreeing

AgreeingTotal

43

100143

0,30

0,701,00

0,50 confirmed

Source: Researchers computation, 2013

Test Result


14/15

There is significant agreement amongst stakeholders on the

effectiveness of forensic accounting in financial fraud

control, financial reporting, and internal control quality

Forensic accounting is a discipline that has its own and

methodologies of investigative procedures that search forassurance, attestation, and advisory to produce legal

evidence.

Institue of Chartered Accountants of Nigeria, Association of

National Accountants of Nigeria and the NationalUniversities Commission should encourage formalization and

specialization in the field forensic accounting.

Conclution


15/15

THANK YOU

nabillah kinanty selvia indra

forensic accounting slide (2)

Documents