FRAUD IDENTIFICATION IN FORENSIC TAX INVESTIGATION AND RULE OF EVIDENCE

FRAUD IDENTIFICATION IN FORENSIC TAX INVESTIGATION AND RULE OF
EVIDENCE
BEING A PAPER PRESENTED AT A 5-DAY INTENSIVE TRAINING OF FORENSIC TAX INVESTIGATIO SKILLS FOR THE
STAFF OF FIRS AT FIRS TRAINING SCHOOL DURUMI, ABUJA ON JULY 5-9 2021.
Prof. Godwin Emmanuel Oyedokun
godwinoye@yahoo.com
+2348033737184, & +2348055863944
Professor of Management & Accounting
Lead City University, Ibadan, Nigeria

 Introduction
 Concept Of Forensic Accounting
 concept of tax audit
 Forensic Accounting Investigations
 Determination of tax fraud
 Evidence and admissibility of evidence in court
 Information gathering and admissibility of evidence in court
 Presentation and analysis of information gathered for evidence admissibility
 Conclusion & Recommendation
Content

INTRODUCTION
 The unceasing and interminable tax related fraud resulting to corporate collapse and the failure of the
statutory audit to detect and prevent fraudulent activities which had led to the impoverishment of investors
had given rise to the need for forensic audit and investigations.
 Fraud is the deliberate action, false depiction or suppression of material facts for the purpose of deceiving
another to act upon it in order to be cheated. Tax fraud on the other hand, is the deliberate deception and
tricks to minimize tax payment or refusal in tax payment through falsification of tax returns or evasion.
 Tax fraud is an intentional deception by taxpayer that results in an injury (tax loss) to the government. It
involves both underpayment of tax and fraudulent intent. This can be committed against the government and
tax authorities that collect taxes in the federal, state and local government. Tax fraud have both domestic and
international dimension. The domestic dimension is in the form of tax evasion, especially as a result of high
number of informal sector or shadow economy.
 Tax fraud is not only associated with reputational damages of corporations and negative values for investors,
it also implies negative consequences for public budgets and economic growth. Therefore, numerous
governments have declared the fight against (offshore) tax evasion. Tax authorities as well as accounting
research, however, face a huge challenge in identifying tax fraud.
 Therefore, one way of reducing this menace, and to instill tax compliance on individual or firm by complying
with actual tax assessment and payment, is the application of forensic accounting techniques.

CONCEPT OF FORENSIC ACCOUNTING
WHAT IS FORENSIC
ACCOUNTING
?
 The word forensic is derived from the Latin adjective
“forensics”, meaning "of or before the forum." Forensic
means, "belonging to, used in or suitable to courts of
judicature or public discussion and debate" (Webster's
Dictionary).
 Forensic Accounting on the other hand gives an accounting
analysis that is suitable to the court which gives the basis
for discussion, debate, and ultimately dispute resolution
 Forensic accounting is then the application of investigative,
auditing, procedure, and analytical skills to resolve
financial issues scientifically and in a manner that meets
standards required by courts of law (Oyedokun, 2017). This
therefore implies that the Litigation process is very
paramount to forensic accounting.

FINANCIAL
ACCOUNTING
ECONOMICS
ANALYSIS
FISCAL AND CRIMINAL
LAW
PSYCHOLOGICAL
ADMINISTRATIVE
INVESTIGATIVE
DISPENSATION
CONCEPT OF FORENSIC ACCOUNTING/2
COMPONENT OF FORENSIC
ACCOUNTING

INVESTIGATION OF FRAUDS
LEGAL DISPUTES AND/OR
ARBITRATION
PREPARATION AND
SUBMISSION OF EXPERT
REPORTS
SUPPORTING OF JUDGES
IN SUBJECTS RELATING TO
ACCOUNTING
VERIFICATION OF
ACCOUNTING RECORDS
APPLICATION OF FORENSIC
ACCOUNTING

ACTIVITIES OF FORENSIC
ACCOUNTING
Forensic
Accounting
helps in the
following
ways
CRIMINAL
INVESTIG
ATION
SHAREHOLDERS
AND
PARTNERSHIP
DISPUTE
BUSINESS
ECONOMIC
LOSSES
PROFESSIONAL
NEGLIGENCE

CONCEPT OF TAX AUDIT
 Tax audit is a level of enquiry aimed at determining what level of
fraud or willful default or neglect a tax payer perpetrated and to
obtain evidence for possible prosecution of the culprit.
 This implies that tax audit centers on determining some
unrevealed sources of revenue, pointing to gross non-
compliance, or it may be about proof of underpayment and fraud
 Tax Audit has been categorized into the following types
Desk or Office
Audit
Field Audit
Back Duty Audit
Registration
Audit
TAX AUDIT
?

TYPES OF TAX AUDIT
1DESK OR OFFICE AUDIT
 This type of audit takes place within the
premises of the tax officials.
 Requests of relevant documents are
made by the tax authority and the auditor
does all the review in the confines of his
own office.
2FIELD AUDIT
 Desk audit brings about field audit when
additional documents are needed to complete
the inspection of a tax payer.
 This implies that field audit is more elaborate
and broader than office audit because it
transcends the office of the auditor.
4BACK DUTY AUDIT
Back duty audit is introduced when there is
doubtful claim of capital allowance related to
previous or current year, a situation where lesser
tax is charged as a result of falsification of
document submitted by the tax payers, a reduction
of profit in the returns files in tax office and
failure to disclose or include in full any income or
earning in the return made available to the tax
office
1REGISTRATION AUDIT
 This type of audit is used to cage
individuals and companies in the tax net.
 It entails documentation of the tax
payers’ identities and other business
information obtained from the Corporate
Affairs Commission (CAC) and the
Nigeria Custom Service (NCS).
CONCEPT OF TAX AUDIT/2

PROCESS OF TAX AUDIT
PRE-AUDIT
RESEARCH
INVESTIGATION
/FIELDWORK
WORK PAPER
DOCUMENTAT
ION (WRITE-
UP)
REVIEW

PRE-AUDIT RESEARCH
 The purpose of pre-audit research and
audit planning is to decide if the audit
assignment meets the initial criteria for
selection and to make a preliminary
determination of the best audit
approach.
 Pre-audit research will vary according
to tax program, but will include a
review of Department records, initial
contact with the taxpayer, and
discussion with the audit supervisor.
INVESTIGATION / FIELDWORK
 Investigation often commences with an
initial interview at the taxpayer’s place
of business, includes fieldwork, and
ends with an exit interview.
 However, investigation may also be
done by the auditor in the office. The
initial interview should be viewed as an
opportunity to gain knowledge useful in
making the audit more effective and
efficient

AUDIT DOCUMENTATION
 Documenting the audit goes on throughout the
entire process. Throughout the interviews
and investigative procedures auditors record
(or document) their findings and conclusions
in order to accurately determine audit
exceptions.
 The write up stage includes organizing and
editing the draft work papers and narratives
into a final report.
 This process creates the permanent work
paper file which becomes the documentation
that supports an assessment.
REVIEW
 The review process assures that the audits
meet the Division’s quality standards and that
audit procedures are consistent throughout
the Districts. There are three main reviews all
audits must go through;
• Self/Peer Review,
• Supervisor review to the extent necessary to
determine that quality standards are met, and
• Audit Technical Support System Review (ATSS
Review).
The auditor/peer review ensures that the
auditor/peer has reviewed the work thoroughly
as documented on the Quality Assurance
Evaluation Form (QAEF).

 Forensic Investigation is another branch of forensic accounting that involves the utilization of
specialized investigative skills in carrying out an inquiry conducted in such a manner that the
outcome will have an application to a court of law.
 A forensic investigation may be grounded in accounting, medicine, engineering, or some other
discipline.
 Forensic accounting investigation is an aspect of forensic accounting that refers to the practical
steps Certified Fraud Examiners or Forensic Accountants take to gather evidence relevant to
alleged fraudulent activities.
 A forensic investigator is often retained to analyze, interpret, summarize and present complex
financial and business-related issues in a manner that is both understandable and properly
supported
FORENSIC ACCOUNTING
INVESTIGATION
FORENSIC ACCOUNTING INVESTIGATION

FORENSIC ACCOUNTING
INVESTIGATION
A forensic investigator can be engaged in public practice or employed by insurance companies,
banks, police forces, and government agencies like EFCC, ICPC, NDLEA, and other organizations for
any of the following functions
 Investigating and analyzing financial evidence
 Developing computerized applications to assist 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 court as
an expert witness and preparing visual aids to support trial
evidence.
FORENSIC ACCOUNTING INVESTIGATION/2

The IRS defines tax fraud as "the willful and material submission of false statements or
false documents in connection with an application and/or return."
 To make this determination, investigators will look for
any indicators of fraud such as, but not limited to:
 Underreporting income
 Using a false Social Security number
 Falsifying documents
 Intentionally failing to pay taxes
DETERMINATION OF TAX FRAUD

Four general elements must be present for a tax fraud to exist
 A material false statement.
 Knowledge that the statement was false when it was
altered.
 Reliance on the false statement by the victim
(Government).
 Damages (revenue loss) resulting from the victim
(government) reliance on the false statement.
DETERMINATION OF TAX FRAUD/2
ELEMENT OF TAX
FRAUD

DETERMINATION OF TAX FRAUD/3
ELIMINATING TAX
FRAUD
Eliminating tax fraud opportunities can be achieved through:
 Having good internal control on tax revenues generation.
 Proper monitoring of taxpayers.
 Discourage all forms of collusion between the tax officials and taxpayers.
 Creating an expectation of punishment as deterrence.
 Minimization of avenue for corruption on tax revenues by tax officials.
 Creation of conducive working environment for tax officials with modern working tools
and adequate training and skill transfer on new forensic technology.
 Proactive tax fraud auditing.

EVIDENCE AND ADMISSIBILITY OF EVIDENCE IN COURT
 Evidence, broadly construed, is anything presented in support of an assertion,
because evident things are undoubted. In fraud investigation process, it begins
with a prediction, circumstances under which a reasonable, professionally trained
expert could believe that fraud is taking place.
 Once there are such indications of fraud, the investigator develops a hypothesis
and looks for evidence to prove the hypothesis. Such evidence can come from
documents, interviews, observation, and other physical clues like fingerprints.
 Based on the evidence acquired, the initial hypothesis can be proved or revised.
The evidence, therefore, is the means whereby a fact in question may be proved
or disproved.
 Types of Evidence include:
CONCEPT
OF
EVIDENCE
INTELLECTUAL
EVIDENCE
EMPIRICAL
EVIDENCE

EVIDENCE AND ADMISSIBILITY OF EVIDENCE IN COURT/2
TESTIMONY
This refers to the oral statements made by witnesses under
oath. In general, the two types of testimonial witnesses are:
a. Lay witnesses: A lay witness is an ordinary person who
testifies based on their knowledge and life experiences.
b. Expert witnesses: An expert witness is someone whose
level of specialized knowledge or skill in a particular field
qualifies them to present their opinion about the facts of
a case during legal proceedings.
REAL EVIDENCE
It describes physical objects that played a part in the issue
being litigated. The term includes documentary evidence
such as canceled checks, invoices, ledgers, and letters as
well as other types of physical evidence. Therefore, a
typewriter or printer in a case involving questioned
documents is real evidence, as is a tape recording, since
members of the court can experience the sound firsthand.
DEMONSTRATIVE EVIDENCE
This is a tangible item that illustrates some material proposition (e.g., a map, a
chart, a summary). It differs from real evidence in the demonstrative evidence
was not part of the underlying event: it was created specifically for the trial. Its
purpose is to provide a visual aid for the jury. Nonetheless, it is evident and can
be considered by the jury in reaching a verdict.
FORMS OF
EVIDENCE

DIRECT EVIDENCE
This is the evidence that tends to prove a fact directly for
example, a statement from an eyewitness or the canceled
check used for a bribe payment or a confession by the
subject. Direct evidence is usually considered to be the
strongest method of proof, but circumstantial evidence –
evidence that tends to prove a fact indirectly, or by inference
from other facts – also can be quite persuasive if presented
correctly.
CIRCUMSTANTIAL PROOF OF “KNOWLEDGE AND INTENT”
Proof of knowledge and intent proof, for example, that the
subject knew that a document was forged and submitted it
with the intent to defraud another party is an essential
element in all fraud and corruption cases: there are no
unintentional bribes or accidental frauds
ADMISSIBLE
EVIDENCE

HEARSAY EVIDENCE
 The Evidence Act of Nigeria, Sec 37 (2011) and Sec 39 of English Evidence Act, statutorily provides for the
definition of Hearsay Evidence as a statement, oral or written made otherwise than by a witness in proceeding or
contained or recorded in a book, document or any record whatsoever, proof of which is not admissible under any
provision of this act, which is tendered in evidence for the purpose of proving the truth of the matter stated in it.
See exceptions in Sec 38-45. In England and Nigeria, hearsay is codified in Evidence Act. Also, in the case of Orji v.
Ugochukwu, the court held in a bid to determine the principle of hearsay evidence thus:
 Hearsay evidence is devoid of probative value. The consequence thereby is to discountenance it and where it has
been made use of by the court; it should be regarded as inadmissible evidence and expunged.
 Judicial Committee of the Privy Council in the case of Subramanian v. Public Prosecutor (1956) 1 WLR 965,
carefully highlighted the actual basis of hearsay evidence in the following expression:
INADMISSIBLE
EVIDENCE

 Judicial Committee of the Privy Council in the case of Subramanian v. Public Prosecutor (1956) 1 WLR 965,
carefully highlighted the actual basis of hearsay evidence in the following expression:
 Evidence of a statement made to a witness by a person who I not himself called a witness may or may not be
hearsay. It is hearsay and inadmissible when the object of the evidence is to establish the truth of what is
contained in the statement. It is not hearsay and is admissible when it is proposed to establish by the evidence, not
the truth of the statement, but the fact that it was made.
 Generally, Hearsay Evidence is inadmissible in court. For instance, “A” is not allowed to give evidence in court to
the effect that “B” told him that he saw “X” stealing a Goat. According to Wigmore, the hearsay rule has been over
enforced and abused, the spoiled child of the family. That is has become a nuisance and obstruction to speedy and
efficient trials
INADMISSIBLE
EVIDENCE

SIMPLICITY
 This relationship between evidence and the
fact under scrutiny. If a piece of evidence
increases or decreases the probability of
the fact being proved then it is relevant,
otherwise irrelevant.
 The law does not define a way to tag
relevance to a piece of evidence, this is done
by logic, common sense, and general
knowledge about the world around.
 The party who produces a shred of evidence,
to prove a fact, is obliged to show its
relevance.
WEIGHT
 The extent or the degree of relevance is the
weight of evidence.
 It can also be defined as the degree to which
evidence makes a proposition more or less
probable.
 The form of generalization adopted to show
the relevance of evidence will affect its
weight.
CHARACTERISTICES OF EVIDENCE

QUALITIES OF LEGAL
EVIDENCE
RELEVANT
EVIDENCE
MATERIAL
EVIDENCE
PROBATIVE
VALUE
SAFE
CHAIN OF
CUSTODY
COMPLETE
AUTHENTIC
ADMISSIBLE
RELIABLE
BELIEVABLE

 The admissibility of evidence is connected with its relevance and weight.
The type of the dispute and the presentation of evidence govern its
relativity to the fact being proved (Gladyshev, 2004).
 Generally, a relevant piece of evidence is admissible, but sometimes
even relevant and weighty evidence might be deemed inadmissible
because it violated some formal law (Routledge 2004).
 For example, if a conversation has been recorded without the consent
of the other party then it might be difficult to admit the recording in the
court of law.
ADMISSIBILITY
OF EVIDENCE
IN LAW COURT

 A piece of evidence is weightless and thus inadmissible if its origin is
equally likely to be from a tampered or an original fact being proved.
Hence preserving the integrity of evidence is essential for its
admissibility.
 Evidential integrity is preserved by employing investigative methods
that do not modify the evidence. The handling of evidence during the
entire process must be performed or witnessed by people who are
trustworthy, objective, and competent, however, this requires further
investigation in the digital domain and will be discussed later.
 Another factor that can help in preserving the integrity of evidence is
called the “chain of custody” which is the history of the evidence from
the time of seizure to the time of presentation. It involves all the
information, including where, how, and who interacted with the
evidence.
INTEGRITY OF
EVIDENCE IN
LAW COURT

CROSS-EXAMINATION IN
EVIDENCE
 Cross examination is fundamental aspect of every trial to ensure justice in every case.
 Parties in all proceedings are given the right and chance to cross examine an adverse
witness in a case. This is to say that the strength or weakness of every case lies on
cross examination.
 Cross examination is a rudimentary process of fair hearing, failure to allow a party to
cross examine can occasion a miscarriage of justice. The decision to cross examine is
incumbent on the parties and largely dependent on how he perceived the examination.
 A party may decide not to cross examine a witness that gave his evidence in chief
especially where the evidence is not detrimental to his case. It is not in all cases that
cross-examination of witness is necessary.
For instance;
 Where such evidence is self-contradictory and lacks substance.
 Where the evidence is adverse to the case of the party who called the court.
 Where the testimony does no harm to the case of the party who should have cross-
examined.

 Insufficient preparation and experience to qualify as an expert witness.
 Inadequate examination of the issues presented.
 Improper presentation of the issues to the witness.
 Suspicion upon the testimony, based upon the witness’s record and character.
 Use of misleading illustrations, selection of unfair examples, drawing of inferences not justified
by facts, and improper emphasis or exaggeration.
 Impossibility of reaching a conclusion meriting serious consideration on an issue not permitting
adequate inquiry.
 Expression was of an opinion unjustified by the reasons given.
 Basing the opinion upon vague and trivial facts insufficient to sustain any opinion, and concluding
by guesswork.
 A biased and unfair attitude of the witness in the examination of the facts.
 The possibility that the problem is so difficult or unusual even a competent and careful witness
may be mistaken.
 Influence of other things rather than technical findings on the opinion of the witness and basing
conclusions on reasons other than those given
EVIDENCE AND ADMISSIBILITY OF EVIDENCE IN COURT/
ATTACKS AGAINST EVIDENCE ON
CROSS-EXAMINATION

INFORMATION GATHERING AND ADMISSIBILITY OF EVIDENCE IN COURT
 Information transmitted to court may be relied upon and accepted in court as evidence
 In forensic accounting engagement, data collected about any target (person, company,
domain name, or service) is converted to information that would be presented as evidence
in a court of law.
 Without evidence, there is no proof; without proof burdens are not met and convictions,
verdicts, or judgement are impossible.
 When it comes to getting a clear information gathering concept, the simplest way to define
it would be the process of collecting information about something you are interested in.
 Information gathered in the course of forensic investigation through interviews, sourced
documents, objects, and testimony if admissive in law court are admitted and marked as
evidence (Mainoma and Oyedokun, 2020).
 The more information gathered about the target, the more the probability to obtain
relevant results.

INFORMATION GATHERING AND ADMISSIBILITY OF EVIDENCE IN COURT/2
 Social engineering: This includes in-person chat, phone conversations, and email spoofing attacks. What all
these methods have in common is the psychology of human weakness, needed to get maximum data about
the target.
 Search engines: Web crawlers can be used to fetch information about anything, and this includes
companies, persons, services, and even real hacks
 Social networks: Facebook, Twitter, LinkedIn, and other social networks are great sources of information
to build a profile, especially when targeting individuals.
 Domain names: These are registered by organizations, governments, public and private agencies, and
people. Therefore, they’re a great starting point when you want to investigate someone. Personal
information, associated domains, projects, services, and technologies can be found by inspecting domain
name information.
 Internet servers: authoritative DNS servers are a great source of information, as they often include every
single surface point exposed to the Internet—which means a direct link to related services such as HTTP,
email, etc.
METHODS USED IN
GATHERING
INFORMATION

INFORMATION
GATHERING TECHNIQUES
In forensics, investigators use a big variety of techniques
and tools to get this precious information about their
targets, as well as locations and data collection software
they’ll be using towards the information gathering goal.
 Social Engineering: This includes in-person chat, phone conversations, and email spoofing
attacks. What all these methods have in common is the psychology of human weakness, needed
to get maximum data about the target.
 Search Engines: Web crawlers can be used to fetch information about anything, and this
includes companies, persons, services, and even real hacks
 Social Networks: Facebook, Twitter, Linked In, and other social networks are great sources of
information to build a profile, especially when targeting individuals.

INFORMATION
GATHERING TECHNIQUES
 DOMAIN NAMES: These are registered by organizations,
governments, public and private agencies, and people.
Therefore, they’re a great starting point when you want to
investigate someone. Personal information, associated
domains, projects, services, and technologies can be found
by inspecting domain name information.
• INTERNET SERVERS: Authoritative DNS servers are a great
source of information, as they often include every single
surface point exposed to the Internet which means a direct
link to related services such as HTTP, email, etc.

PRESERVING EVIDENCE
GATHERED FOR COURT
ADMISSIBILITY
 The handling of evidence is the most important aspect of digital forensics. This is known as preservation:
the isolation and protection of digital evidence exactly as found without alteration so that it can later be
analyzed. Information obtained during a forensic investigation must be handled and preserved in such a
manner that it’s physical and legal integrity is maintained to ensure that the evidence is sought lawfully
and that it is admissible (Mudaly, 2011; Oyedokun, 2017).
 Most of the criminals behind fraud use sophisticated technology and accounting tricks to commit
complex frauds. This means that forensic accountants need state-of-the-art facilities to uncover fraud.
Computers are common tools used by the culprits behind white-collar crimes.
 To find “the smoking gun,” the forensic accountant will need to be able to dig deep into the company’s
computer system. However, without the proper equipment, that process can prove to be very difficult.
To facilitate the preservation, collection, analysis, and documentation of evidence, forensic accountants
can use specialized software and computer hardware. Many new technologies allow the investigators to
recover deleted files, crack encryptions or codes, extract and sort data (Bigler, 2001).

 Document management: This is critical in any fraud investigation.
Larger cases mean more documents, so the process of managing them
is even more important
 Engage a Professional: Digital Evidence is relatively easy to preserve if
you use the help of a knowledgeable professional
 No External Engagement: At all costs, do not allow anyone to do anything
to the computers used by a fraud suspect(s). Allow only a qualified
computer forensics expert to touch the computers in question.
 Keep Original Document Saved: Investigators should not write on
originals in any way or otherwise destroy or mark them
 As a general rule of thumb, make sure originals of all documents are
secured and their chain of custody is documented
How to preserve
Evidence for
Court
Admissibility

FORENSIC DATA
ANALYTICAL TOOLS
ANALYTICS
Forensic analytics describes the act of
obtaining and analyzing electronic data using
formulas and statistical techniques to
reconstruct, detect, or otherwise support a
claim of financial fraud
MICROSOFT ACCESS
Access can be used for data sets that are
reasonably sized. Access is a Windows-based
database program that keeps the tables, queries,
and reports neatly compartmentalized.
MICROSOFT EXCEL
The importation of data is usually easy using
Excel, as you can easily import data from
Access and a host of other database
programs.
ANALYSIS OF TRANSACTION
The analysis of transactions is when a comparison or
contrast of transactional and pattern-sensitive data is
measured to provide a record for forensic analysis.

PRESERVATION AND ANALYSIS OF INFORMATION GATHERED FOR EVIDENCE
ADMISSIBILITY
 Evidence is a major factor that has aided the delivery of justice in several court cases, Forensic accounting processes, and
systematic ways of information gathering, preservation, analysis, and admissibility of evidence in the law court.
 Evidence is deemed relevant if it has “any tendency to make the existence of any fact that is of consequence to the determination of
the action more probable, or less probable, that it would be without the evidence.”
 Forensic accounting focuses on both financial proof of transactions and reporting which is contained within an accounting system
and the legal framework which allows such proof to be suitable for establishing accountability and valuation.
 Preserving evidence is the most important aspect of digital forensics. This process includes the isolation and protection of digital
evidence exactly as found without alteration so that it can later be analyzed.
 Forensic accountants, therefore, need state-of-the-art facilities to preserve the information gathered, to facilitate the preservation,
they should use specialized software and computer hardware as many new technologies allow the investigators to recover deleted
files, crack encryptions or codes, extract and sort data. Earlier presented were ways to preserve evidence for court admissibility.
 Forensic accounting involves analysis of accounting records, interviewing related parties, and acting as an expert witness. The
techniques employed to analyze information gathered in the course of an investigation could make or mar the evidence and its
subsequent admissibility in court. Forensic data analysis tools such as analytics, Microsoft Access, Microsoft Excel, analysis of
transactions could be employed while its interpretation and must be done without bias.

 The integrity of evidence is usually at the test in the law court, whether a shred of
evidence would be admissible or not is connected with its relevance and weight. But
sometimes even relevant and weighty evidence might be deemed inadmissible because
it violated some formal law.
 Let’s say, for instance, a conversation recorded without the consent of the other party,
it might be difficult to admit such recording in the court of law.
 For the sake of evidence intergity, evidence is inadmissible if its origin is equally likely
to have tampered; the handling of evidence during the entire process must be
performed or witnessed by people who are trustworthy, objective, and competent; and
lastly, the “chain of custody” which is the history of the evidence from the time of
seizure to the time of presentation must adhere strictly.
PRESERVATION AND ANALYSIS OF INFORMATION GATHERED FOR EVIDENCE
ADMISSIBILITY/2

 The high rate of tax fraud, tax evasion and other form of non-compliance in Nigeria is alarming, while the
traditional auditing techniques has failed, based on its inefficiency and ineffectiveness in curbing tax fraud and
other forms of fraudulent practices.
 Collusion and corruption on tax revenues is also alarming, rationalising it on wastages and infrastructural decays.
Much premium is placed on materials than integrity which to a large extent encourage fraudulent practices and tax
fraud.
 This necessitate the calls for an alternative means of addressing this tax problems, therefore, forensic accounting
is to control and deter fraudulent practices on tax revenues in order to enhance and increase tax revenue
generation by the government.
 Forensic accounting application to tax fraud and tax evasion is very important to the enhancement of revenues
generation especially in a developing countries with high rate of informal sectors, corruption and persistent
increase in the level of tax loss. The major benefit is to increase government revenues required for provision of
public goods and services; enhancement of social, economic and infrastructural development; and reduction in the
country’s annual budget deficit.
CONCLUSION

 Also, the application of forensic accounting techniques for tax revenues drive will shape tax morale wish will lead
to increase in the level of tax compliance.
 It will also bring about tax fairness and justice as number of tax complaint individual and firms will increase while
it bridged the gap between tax compliant and tax evaders, as those that voluntary complied to tax payment will
not feel aggrieved and cheated by tax evaders.
 It will enhance the compilation of taxpayers’ data base as many taxpayers will be brought to books which will aid
good revenues generation planning and budgeting.
 For the future, as the level of compliance increases, time and cost associated with investigation and recovery
will be minimised and eradicated.
 Lastly, evidence gathering and its rules must not be carelessly noted, it is important to collect relevant evidence
that can be admissible in the court of law because that is only the substantial tools of winning or losing a case.
CONCLUSION/2

 Government should develop interest in forensic accountant for monitoring and investigation of tax fraud and
other related fraudulent activities.
 Specialization of forensic accounting as a field of study in tertiary education and as a unit in organisation set-up.
 Accountant should specialize in forensic accounting practices.
 Creation of law and regulations on the use of forensic accounting in combating financial and tax related
fraudulent activities and crimes.
 Appropriate punishing and stiffer sanctions for the defaulter of tax laws, to serve as deterrence.
 Engagement of forensic accountant at tax offices to pursue tax revenues.
 Adoption of advanced technology to curb tax fraud and evasion
 Transparency and accountability around tax matters
 Tax fairness and justice with good taxpayers’ data base.
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