The incessant tax related fraud and malfeasance 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. In view of the above, this paper considers the application of forensic audit and investigation in resolving tax related fraud and malfeasance. The study is a theoretical research which considers the roles of forensic auditors in combating fraudulent activities, distinction of forensic auditor and statutory auditor, and impact of forensic auditor on corporate governance. Based on the findings; this paper concludes that forensic auditing has improved management accountability, strengthened external auditor’s independence and assisting audit committee members in carrying out their oversight function by providing them assurance on internal audit report have impacted positively to corporate governance, thereby reducing tax related fraud and malfeasance. Therefore the study recommends that; the service of forensic auditors should be employed in Nigerian organisations.
This document provides biographies of the authors of a book on internal audit and fraud prevention. It introduces John Milner, Martin Ghirardotti, Enrique Pastor, and Miguel del Olmo, who have extensive experience in fields including internal audit, risk evaluation, fraud prevention and detection, and corporate governance. They have worked with companies and organizations in countries like Ireland, Argentina, Mexico, the United States, South Africa, and throughout Latin America. The document establishes the authors' expertise on the topic which will be covered in the book.
Bortoletti, what is corruption?, commissione europea, ipa zagabria 21 23 no...Maurizio Bortoletti
The fight against corruption and other offenses against the public administration must be based on accurate and objective data to give citizens a realistic representation of the situation and not ultra sized, taking into account that it is evoking themes and sensational easily usable by this or that political party
Il contrasto al fenomeno della corruzione e agli altri illeciti contro la pubblica amministrazione deve fondarsi su informazioni precise e su dati oggettivi per dare ai cittadini una rappresentazione realistica della situazione e non ultra dimensionata, tenuto conto che si tratta di tematiche evocanti ed eclatanti facilmente utilizzabili da questa o quella parte politica.
Money laundering involves converting illegally obtained "dirty money" into money that appears legitimate. It typically involves three stages: placement, layering, and integration. Common techniques include using shell companies, offshore bank accounts, cryptocurrencies, and casinos. Legislation like the Prevention of Money Laundering Act aims to curb it by imposing reporting requirements on financial institutions and regulating suspicious transactions.
Presentation on Financial Crimes. Money is one of the most important reasons behind all forms of crime whether Cyber or Internet crimes, Physical or Theft crimes. With the advancement of technology the crime has not decelerated but only esteemed and many more new techniques were by people and they were popularly called as Blackhat hackers. In this presentations we give an over view of the whole scenario.
This document examines fraud prevention and internal controls in the Nigerian banking system. It uses both primary and secondary data to analyze the effectiveness of internal controls and identify factors that influence fraud. The primary data uses questionnaires from four banks to test how separation of duties, monitoring, and staff qualifications impact internal controls. The secondary data uses bank profit, regulation, technology, and M2 levels to further explore their impact on actual losses, weighted losses, and percentage increases in losses. Regression analysis is used to analyze the relationships between these factors. The results show that internal controls are effective against fraud but not all staff commit to them fully. The secondary data supports and expands on this by showing M2 levels, staff qualifications and technology have significant impacts across
Guide to The Bribery Act 2010 by Josiah HincksJosiahHincks
The Bribery Act 2010 came in to force in the UK in July 2011.
It creates criminal offences for individuals who give or receive bribes.
It also creates an offence for Companies and Partnerships who fail to prevent bribery occuring. The fines are unlimited.
This slide show from Josiah Hincks Solicitors in Leicester presents everything you need to know about Bribery, The Bribery Act, and how to ensure your business is compliant.
Visit http://www.josiahhincks.co.uk for more information about our firm of solicitors in Leicester.
This document summarizes legal ethics issues for lawyers in a changing profession. It discusses trends affecting law firms like changing firm structures, challenges with marketing and funding, and diversity issues. It also outlines new ABA Model Rule 8.4(g) regarding harassment and discrimination. The document discusses lawyers' role as gatekeepers regarding money laundering. It provides guidance on handling client funds and trust accounts, storing client information, and practicing across state lines. The presentation emphasizes that technological changes require proactive steps to maintain confidentiality and security online.
This document provides biographies of the authors of a book on internal audit and fraud prevention. It introduces John Milner, Martin Ghirardotti, Enrique Pastor, and Miguel del Olmo, who have extensive experience in fields including internal audit, risk evaluation, fraud prevention and detection, and corporate governance. They have worked with companies and organizations in countries like Ireland, Argentina, Mexico, the United States, South Africa, and throughout Latin America. The document establishes the authors' expertise on the topic which will be covered in the book.
Bortoletti, what is corruption?, commissione europea, ipa zagabria 21 23 no...Maurizio Bortoletti
The fight against corruption and other offenses against the public administration must be based on accurate and objective data to give citizens a realistic representation of the situation and not ultra sized, taking into account that it is evoking themes and sensational easily usable by this or that political party
Il contrasto al fenomeno della corruzione e agli altri illeciti contro la pubblica amministrazione deve fondarsi su informazioni precise e su dati oggettivi per dare ai cittadini una rappresentazione realistica della situazione e non ultra dimensionata, tenuto conto che si tratta di tematiche evocanti ed eclatanti facilmente utilizzabili da questa o quella parte politica.
Money laundering involves converting illegally obtained "dirty money" into money that appears legitimate. It typically involves three stages: placement, layering, and integration. Common techniques include using shell companies, offshore bank accounts, cryptocurrencies, and casinos. Legislation like the Prevention of Money Laundering Act aims to curb it by imposing reporting requirements on financial institutions and regulating suspicious transactions.
Presentation on Financial Crimes. Money is one of the most important reasons behind all forms of crime whether Cyber or Internet crimes, Physical or Theft crimes. With the advancement of technology the crime has not decelerated but only esteemed and many more new techniques were by people and they were popularly called as Blackhat hackers. In this presentations we give an over view of the whole scenario.
This document examines fraud prevention and internal controls in the Nigerian banking system. It uses both primary and secondary data to analyze the effectiveness of internal controls and identify factors that influence fraud. The primary data uses questionnaires from four banks to test how separation of duties, monitoring, and staff qualifications impact internal controls. The secondary data uses bank profit, regulation, technology, and M2 levels to further explore their impact on actual losses, weighted losses, and percentage increases in losses. Regression analysis is used to analyze the relationships between these factors. The results show that internal controls are effective against fraud but not all staff commit to them fully. The secondary data supports and expands on this by showing M2 levels, staff qualifications and technology have significant impacts across
Guide to The Bribery Act 2010 by Josiah HincksJosiahHincks
The Bribery Act 2010 came in to force in the UK in July 2011.
It creates criminal offences for individuals who give or receive bribes.
It also creates an offence for Companies and Partnerships who fail to prevent bribery occuring. The fines are unlimited.
This slide show from Josiah Hincks Solicitors in Leicester presents everything you need to know about Bribery, The Bribery Act, and how to ensure your business is compliant.
Visit http://www.josiahhincks.co.uk for more information about our firm of solicitors in Leicester.
This document summarizes legal ethics issues for lawyers in a changing profession. It discusses trends affecting law firms like changing firm structures, challenges with marketing and funding, and diversity issues. It also outlines new ABA Model Rule 8.4(g) regarding harassment and discrimination. The document discusses lawyers' role as gatekeepers regarding money laundering. It provides guidance on handling client funds and trust accounts, storing client information, and practicing across state lines. The presentation emphasizes that technological changes require proactive steps to maintain confidentiality and security online.
This document examines state-corporate crime in Ireland using a case study approach. It discusses concepts like mediated corruption and how corruption can indirectly benefit political actors. It also analyzes Ireland's relatively low levels of corruption in the early 1900s-1920s, when collective moral bonds and respect for the rule of law were strong. However, it suggests definitions of crime are politically shaped. It examines Ireland's 2008 banking crisis and the government guarantee that benefited banks over depositors. Finally, it discusses NAMA and the small number of debtors behind huge loans, reflecting an unsustainable bubble.
This document provides an overview of anti-money laundering practices and suspicious transactions. It discusses the key stages of money laundering: placement, layering, and integration. It also outlines the elements of an effective AML program, including board approval, training, internal controls, and independent audits. Several typologies of money laundering are described, such as the use of shell companies and cash couriers. Guidelines for identifying and reporting suspicious transactions and clients are provided. Specific scenarios involving suspicious activities like structuring are reviewed.
This document presents two theoretical models of determinants of informality and tests their implications using survey data from over 50,000 small firms in Brazil. The first model finds that informal firms face higher capital costs and size limitations, resulting in smaller size and lower capital-labor ratios compared to formal firms. The second model highlights how value-added taxes can transmit informality between firms in a supply chain. Empirical analysis supports the models' implications and finds measures of supplier and purchaser formality are correlated with a firm's own formality, especially in sectors subject to value-added tax credits.
The document discusses considerations for companies when an allegation of an FCPA violation is raised internally. It recommends (1) assessing whether there is a possible violation, (2) undertaking an internal investigation if needed, and (3) using the opportunity to assess internal controls and compliance programs and make improvements. It also discusses the challenging decision of whether to make a voluntary disclosure to government authorities, noting potential benefits if disclosure is early and cooperation is in good faith.
Evaluation of the impact of oil subsidy removal on manufacturing firms in sou...Newman Enyioko
This document provides background information on oil subsidy policy and discusses Nigeria's removal of oil subsidies in 2012. It led to public protests over increased costs of living and manufacturing. While subsidies on diesel were previously removed in 2006 with less opposition, subsidies on gasoline (PMS) directly impact most citizens. The document aims to evaluate the impact of subsidy removal on manufacturing firms in southeast Nigeria, an important industrial region. Subsidy removal may affect firms' operations as they rely on diesel generators for power and use diesel and gasoline to run vehicles and equipment.
Application of forensic audit and investigation in resolving tax related frau...Newman Enyioko
The incessant tax related fraud and malfeasance 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. In view of the above, this paper considers the application of forensic audit and investigation in resolving tax related fraud and malfeasance. The study is a theoretical research which considers the roles of forensic auditors in combating fraudulent activities, distinction of forensic auditor and statutory auditor, and impact of forensic auditor on corporate governance. Based on the findings; this paper concludes that forensic auditing has improved management accountability, strengthened external auditor’s independence and assisting audit committee members in carrying out their oversight function by providing them assurance on internal audit report have impacted positively to corporate governance, thereby reducing tax related fraud and malfeasance. Therefore the study recommends that; the service of forensic auditors should be employed in Nigerian organisations.
Discover the 4 most common types of forensic accounting investigation and what you need to know before hiring a forensic accounting investigator for your case.
The document discusses theoretical and conceptual frameworks. It defines a theoretical framework as providing context and rationale for examining problems by developing hypotheses and guiding research design and interpretation. A conceptual framework outlines possible approaches to an idea. The document provides guidance on developing frameworks, including selecting concepts, identifying relationships between concepts, defining concepts, and formulating the theoretical rationale. Frameworks can be descriptive, explanatory, or predictive. The document also discusses critiquing frameworks and the contribution of nursing frameworks to research.
The document discusses conceptual frameworks and how they are formulated for research studies. It provides guidelines for writing qualitative and quantitative research questions and hypotheses. It also discusses how to incorporate theories and place them within research studies. Mixed methods approaches are also covered, including different ways to write research questions and hypotheses for mixed methods designs.
This document defines key terms related to theoretical and conceptual frameworks, including concepts, constructs, variables, conceptual framework, and theoretical framework. It explains that a conceptual framework consists of concepts and proposed relationships between concepts, while a theoretical framework is based on existing theories. The purposes of conceptual and theoretical frameworks are to clarify concepts, propose relationships between concepts, provide context for interpreting findings, and stimulate further research and theory development.
Forensic accounting as a tool for fighting financial crime in nigeriaAlexander Decker
This document discusses forensic accounting and its potential use as a tool to fight financial crimes in Nigeria. It defines forensic accounting as the application of accounting skills and techniques to legal issues. Forensic accountants look beyond financial statements and audit trails to examine the substance of transactions. They can help gather evidence of economic crimes in a way that is suitable for use in court. The document recommends that anti-corruption agencies in Nigeria consider engaging forensic accountants to strengthen evidence and improve conviction rates for fraud offenders.
Impact of Provision of Litigation Supports through Forensic Investigations on...Premier Publishers
This paper presents an argument through the fraud triangle theory that the provision of litigation supports through forensic audits and investigations in relation to corporate fraud cases is adequate for effective prosecution of perpetrators as well as corporate fraud prevention. To support this argument, this study operationalized provision of litigation supports through forensic audit and investigations, data mining for trends and patterns, and fraud data collection and preparation. A sample of 500 respondents was drawn from the population of professional accountants and legal practitioners in Nigeria. Questionnaire was used as the instrument for data collection and this was mailed to the respective respondents. Resulting responses were analyzed using the OLS multiple regression techniques via the SPSS statistical software. The results reveal that the provision of litigation supports through forensic audits and investigations, fraud data mining for trends and patterns and fraud data collection and preparation for court proceedings have a positive and significant impact on corporate fraud prevention in Nigeria. This study therefore recommends that regulators should promote the provision of litigation supports through forensic audits and investigations in relation to corporate fraud cases in publicly listed firms in Nigeria, as this will help provide reports that are acceptable in court proceedings.
The impact of forensic accounting on fraud detectionAlexander Decker
This document summarizes a research study that examined the impact of forensic accounting on fraud detection in Nigerian firms. The study aimed to determine the relationship between fraud detection and forensic accounting. It reviewed definitions and types of forensic accounting and fraud. Data was collected through questionnaires administered to 15 firms and analyzed using descriptive statistics and regression analysis. The study revealed that the application of forensic accounting services affects the level of fraudulent activities in firms. It concluded that forensic accounting can help curb fraud in companies.
Problem & Prospects of Forensic Accounting in IndiaCA. Sanjay Ruia
This document discusses the problems and prospects of forensic accounting as a profession in India. It begins with defining forensic accounting as the combination of accounting, auditing, and investigation skills used to deter, detect, and investigate financial reporting frauds. It then discusses how forensic accounting has gained prominence in India after major corporate scandals like Satyam. While the demand for forensic accountants is rising, it remains an emerging profession with problems like a lack of expertise in law enforcement. The document explores the scope and techniques of forensic accounting and analyzes the challenges and opportunities for its growth in India.
This literature review is organized in five sections. Firstly, we begin with general ideas and continue with the origin of the fraudulent. Secondly, we discuss the struggle of the phenomena, insisting on the available mechanisms. Finally, we’ll discuss the link between audit and fraud.
This review present some evidence on fraud, forensic accounting, the skills and education of the forensic investigator. Also, some explanation for the diverging views among academics and regulators in relation to detecting fraud are provided. To regulators, I address the question on why academic research in forensic accounting have little significance to inform policy. Further, I present some rich set of questions and identify a number of important directions for future research in forensic accounting. This paper is intended to stimulate debates and future research on the issues identified.
This document is a project report on forensic accounting in India written by Sridevi H.V. It discusses the evolution and increasing importance of forensic accounting due to rising financial frauds. It outlines the objectives and methodology of the study. Forensic accounting involves detecting fraud and investigating accounting irregularities by looking beyond raw numbers and applying skills from accounting, auditing and law. It is useful for fraud examinations, dispute resolution, and other legal proceedings. However, forensic accountants in India face difficulties due to a lack of organized databases and sometimes unreasonable client expectations. The report examines the nature, role and techniques of forensic accounting as well as common types of financial frauds.
This document provides an overview of forensic accounting and its role in combating corruption in Nigeria. It defines forensic accounting as the scientific application of accounting principles to legal problems, and notes that forensic accountants uncover and analyze fraud and present evidence for legal cases. The document then discusses concepts of corruption and defines it as the abuse of power for private gain. It notes widespread corruption in Nigeria and argues that forensic accounting techniques can help fight corruption by gathering evidence for prosecutions. Overall, the document examines the nexus between forensic accounting and combating political and financial corruption in Nigeria through litigation support and fraud detection.
Evaluation of fraud and internal control proceduresAlexander Decker
This document evaluates internal control procedures and fraud management in two government ministries in Nigeria. Through a survey of accounting, auditing, and management staff in the ministries, the study found clear failures of internal checks and an absence of proper segregation of duties. To address weaknesses in the fraud management and internal control systems, the author recommends improvements to make the systems more active and ensure greater accountability, transparency and integrity in the civil service.
Fraud Prevention, Mitigation and Management Practices In Nigerian FirmsIOSR Journals
This paper examined fraud prevention, mitigation and management practices. The respondents were 294 persons drawn from business owners, accountants, investors, bankers, and managers in Port Harcourt. The spearman’s rank order correlation coefficient statistical tool of the statistical package for social sciences (SPSS) was used to test the hypotheses. Results indicated that there is a significant relationship between internal control system and reduction in the manipulation of records; and there is a significant relationship between internal auditing and the prevention of assets defalcations.It was concluded that businesses operate in a risky environment where errors and irregularities which may result into fraud can occur. Fraud is an act of deception which is perpetrated by someone in authority for the illegal acquisition of the assets of an organization that he or she is entrusted to take care of. Thus, efficient and effective internal control system with adequate internal auditing should be provided to prevent, mitigate and manage all forms of fraudulent activities in organizations. In the lightof our findings from the study, we recommendedthat the management of firms should have mechanisms for theproper documentations of their assets, and that the management of organizations should provide mechanisms to safeguard all their physical assets.
This document examines state-corporate crime in Ireland using a case study approach. It discusses concepts like mediated corruption and how corruption can indirectly benefit political actors. It also analyzes Ireland's relatively low levels of corruption in the early 1900s-1920s, when collective moral bonds and respect for the rule of law were strong. However, it suggests definitions of crime are politically shaped. It examines Ireland's 2008 banking crisis and the government guarantee that benefited banks over depositors. Finally, it discusses NAMA and the small number of debtors behind huge loans, reflecting an unsustainable bubble.
This document provides an overview of anti-money laundering practices and suspicious transactions. It discusses the key stages of money laundering: placement, layering, and integration. It also outlines the elements of an effective AML program, including board approval, training, internal controls, and independent audits. Several typologies of money laundering are described, such as the use of shell companies and cash couriers. Guidelines for identifying and reporting suspicious transactions and clients are provided. Specific scenarios involving suspicious activities like structuring are reviewed.
This document presents two theoretical models of determinants of informality and tests their implications using survey data from over 50,000 small firms in Brazil. The first model finds that informal firms face higher capital costs and size limitations, resulting in smaller size and lower capital-labor ratios compared to formal firms. The second model highlights how value-added taxes can transmit informality between firms in a supply chain. Empirical analysis supports the models' implications and finds measures of supplier and purchaser formality are correlated with a firm's own formality, especially in sectors subject to value-added tax credits.
The document discusses considerations for companies when an allegation of an FCPA violation is raised internally. It recommends (1) assessing whether there is a possible violation, (2) undertaking an internal investigation if needed, and (3) using the opportunity to assess internal controls and compliance programs and make improvements. It also discusses the challenging decision of whether to make a voluntary disclosure to government authorities, noting potential benefits if disclosure is early and cooperation is in good faith.
Evaluation of the impact of oil subsidy removal on manufacturing firms in sou...Newman Enyioko
This document provides background information on oil subsidy policy and discusses Nigeria's removal of oil subsidies in 2012. It led to public protests over increased costs of living and manufacturing. While subsidies on diesel were previously removed in 2006 with less opposition, subsidies on gasoline (PMS) directly impact most citizens. The document aims to evaluate the impact of subsidy removal on manufacturing firms in southeast Nigeria, an important industrial region. Subsidy removal may affect firms' operations as they rely on diesel generators for power and use diesel and gasoline to run vehicles and equipment.
Application of forensic audit and investigation in resolving tax related frau...Newman Enyioko
The incessant tax related fraud and malfeasance 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. In view of the above, this paper considers the application of forensic audit and investigation in resolving tax related fraud and malfeasance. The study is a theoretical research which considers the roles of forensic auditors in combating fraudulent activities, distinction of forensic auditor and statutory auditor, and impact of forensic auditor on corporate governance. Based on the findings; this paper concludes that forensic auditing has improved management accountability, strengthened external auditor’s independence and assisting audit committee members in carrying out their oversight function by providing them assurance on internal audit report have impacted positively to corporate governance, thereby reducing tax related fraud and malfeasance. Therefore the study recommends that; the service of forensic auditors should be employed in Nigerian organisations.
Discover the 4 most common types of forensic accounting investigation and what you need to know before hiring a forensic accounting investigator for your case.
The document discusses theoretical and conceptual frameworks. It defines a theoretical framework as providing context and rationale for examining problems by developing hypotheses and guiding research design and interpretation. A conceptual framework outlines possible approaches to an idea. The document provides guidance on developing frameworks, including selecting concepts, identifying relationships between concepts, defining concepts, and formulating the theoretical rationale. Frameworks can be descriptive, explanatory, or predictive. The document also discusses critiquing frameworks and the contribution of nursing frameworks to research.
The document discusses conceptual frameworks and how they are formulated for research studies. It provides guidelines for writing qualitative and quantitative research questions and hypotheses. It also discusses how to incorporate theories and place them within research studies. Mixed methods approaches are also covered, including different ways to write research questions and hypotheses for mixed methods designs.
This document defines key terms related to theoretical and conceptual frameworks, including concepts, constructs, variables, conceptual framework, and theoretical framework. It explains that a conceptual framework consists of concepts and proposed relationships between concepts, while a theoretical framework is based on existing theories. The purposes of conceptual and theoretical frameworks are to clarify concepts, propose relationships between concepts, provide context for interpreting findings, and stimulate further research and theory development.
Forensic accounting as a tool for fighting financial crime in nigeriaAlexander Decker
This document discusses forensic accounting and its potential use as a tool to fight financial crimes in Nigeria. It defines forensic accounting as the application of accounting skills and techniques to legal issues. Forensic accountants look beyond financial statements and audit trails to examine the substance of transactions. They can help gather evidence of economic crimes in a way that is suitable for use in court. The document recommends that anti-corruption agencies in Nigeria consider engaging forensic accountants to strengthen evidence and improve conviction rates for fraud offenders.
Impact of Provision of Litigation Supports through Forensic Investigations on...Premier Publishers
This paper presents an argument through the fraud triangle theory that the provision of litigation supports through forensic audits and investigations in relation to corporate fraud cases is adequate for effective prosecution of perpetrators as well as corporate fraud prevention. To support this argument, this study operationalized provision of litigation supports through forensic audit and investigations, data mining for trends and patterns, and fraud data collection and preparation. A sample of 500 respondents was drawn from the population of professional accountants and legal practitioners in Nigeria. Questionnaire was used as the instrument for data collection and this was mailed to the respective respondents. Resulting responses were analyzed using the OLS multiple regression techniques via the SPSS statistical software. The results reveal that the provision of litigation supports through forensic audits and investigations, fraud data mining for trends and patterns and fraud data collection and preparation for court proceedings have a positive and significant impact on corporate fraud prevention in Nigeria. This study therefore recommends that regulators should promote the provision of litigation supports through forensic audits and investigations in relation to corporate fraud cases in publicly listed firms in Nigeria, as this will help provide reports that are acceptable in court proceedings.
The impact of forensic accounting on fraud detectionAlexander Decker
This document summarizes a research study that examined the impact of forensic accounting on fraud detection in Nigerian firms. The study aimed to determine the relationship between fraud detection and forensic accounting. It reviewed definitions and types of forensic accounting and fraud. Data was collected through questionnaires administered to 15 firms and analyzed using descriptive statistics and regression analysis. The study revealed that the application of forensic accounting services affects the level of fraudulent activities in firms. It concluded that forensic accounting can help curb fraud in companies.
Problem & Prospects of Forensic Accounting in IndiaCA. Sanjay Ruia
This document discusses the problems and prospects of forensic accounting as a profession in India. It begins with defining forensic accounting as the combination of accounting, auditing, and investigation skills used to deter, detect, and investigate financial reporting frauds. It then discusses how forensic accounting has gained prominence in India after major corporate scandals like Satyam. While the demand for forensic accountants is rising, it remains an emerging profession with problems like a lack of expertise in law enforcement. The document explores the scope and techniques of forensic accounting and analyzes the challenges and opportunities for its growth in India.
This literature review is organized in five sections. Firstly, we begin with general ideas and continue with the origin of the fraudulent. Secondly, we discuss the struggle of the phenomena, insisting on the available mechanisms. Finally, we’ll discuss the link between audit and fraud.
This review present some evidence on fraud, forensic accounting, the skills and education of the forensic investigator. Also, some explanation for the diverging views among academics and regulators in relation to detecting fraud are provided. To regulators, I address the question on why academic research in forensic accounting have little significance to inform policy. Further, I present some rich set of questions and identify a number of important directions for future research in forensic accounting. This paper is intended to stimulate debates and future research on the issues identified.
This document is a project report on forensic accounting in India written by Sridevi H.V. It discusses the evolution and increasing importance of forensic accounting due to rising financial frauds. It outlines the objectives and methodology of the study. Forensic accounting involves detecting fraud and investigating accounting irregularities by looking beyond raw numbers and applying skills from accounting, auditing and law. It is useful for fraud examinations, dispute resolution, and other legal proceedings. However, forensic accountants in India face difficulties due to a lack of organized databases and sometimes unreasonable client expectations. The report examines the nature, role and techniques of forensic accounting as well as common types of financial frauds.
This document provides an overview of forensic accounting and its role in combating corruption in Nigeria. It defines forensic accounting as the scientific application of accounting principles to legal problems, and notes that forensic accountants uncover and analyze fraud and present evidence for legal cases. The document then discusses concepts of corruption and defines it as the abuse of power for private gain. It notes widespread corruption in Nigeria and argues that forensic accounting techniques can help fight corruption by gathering evidence for prosecutions. Overall, the document examines the nexus between forensic accounting and combating political and financial corruption in Nigeria through litigation support and fraud detection.
Evaluation of fraud and internal control proceduresAlexander Decker
This document evaluates internal control procedures and fraud management in two government ministries in Nigeria. Through a survey of accounting, auditing, and management staff in the ministries, the study found clear failures of internal checks and an absence of proper segregation of duties. To address weaknesses in the fraud management and internal control systems, the author recommends improvements to make the systems more active and ensure greater accountability, transparency and integrity in the civil service.
Fraud Prevention, Mitigation and Management Practices In Nigerian FirmsIOSR Journals
This paper examined fraud prevention, mitigation and management practices. The respondents were 294 persons drawn from business owners, accountants, investors, bankers, and managers in Port Harcourt. The spearman’s rank order correlation coefficient statistical tool of the statistical package for social sciences (SPSS) was used to test the hypotheses. Results indicated that there is a significant relationship between internal control system and reduction in the manipulation of records; and there is a significant relationship between internal auditing and the prevention of assets defalcations.It was concluded that businesses operate in a risky environment where errors and irregularities which may result into fraud can occur. Fraud is an act of deception which is perpetrated by someone in authority for the illegal acquisition of the assets of an organization that he or she is entrusted to take care of. Thus, efficient and effective internal control system with adequate internal auditing should be provided to prevent, mitigate and manage all forms of fraudulent activities in organizations. In the lightof our findings from the study, we recommendedthat the management of firms should have mechanisms for theproper documentations of their assets, and that the management of organizations should provide mechanisms to safeguard all their physical assets.
Fraud And Abuse In The U.S. Healthcare SystemKendra Cote
Fraud and abuse are significant problems in the U.S. healthcare system. Fraud involves intentional deception to obtain unauthorized benefits, while abuse involves practices that are inconsistent with professional standards of care. Medicaid and Medicare are especially vulnerable to fraud because individuals may not see their bills. Common types of fraud include billing for services not rendered and overbilling. Solutions to reduce fraud and abuse include training, computer-assisted coding, increased enforcement, and data analysis.
What is fraud?
A fraud is defined as a wrongful or criminal deception intended to result in financial or personal gain. "He was convicted of fraud" a person or thing intended to deceive others, typically by unjustifiably claiming or being credited with accomplishments or qualities.
What is Fraud Law?
In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate civil law (e.g., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compensation) or criminal law (e.g., a fraud perpetrator may be prosecuted and imprisoned by governmental authorities), or it may cause no loss of money, property, or legal right but still be an element of another civil or criminal wrong.
The purpose of fraud may be monetary gain or other benefits, for example by obtaining a passport, travel document, or driver's license, or mortgage fraud, where the perpetrator may attempt to qualify for a mortgage by way of false statements.
Terminology
Fraud can be defined as either a civil wrong or a criminal act. For civil fraud, a government agency or person or entity harmed by fraud may bring litigation to stop the fraud, seek monetary damages, or both. For criminal fraud, a person may be prosecuted for the fraud and potentially face fines, incarceration, or both.
Civil law
In common law jurisdictions, as a civil wrong, fraud is a tort While the precise definitions and requirements of proof vary among jurisdictions, the requisite elements of fraud as a tort generally are the intentional misrepresentation or concealment of an important fact upon which the victim is meant to rely, and in fact does rely, to the harm of the victim. Proving fraud in a court of law is often said to be difficult as the intention to defraud is the key element in question. As such, proving fraud comes with a "greater evidentiary burden than other civil claims". This difficulty is exacerbated by the fact that some jurisdictions require the victim to prove fraud by clear and convincing evidence.
The remedies for fraud may include rescission (i.e., reversal) of a fraudulently obtained agreement or transaction, the recovery of a monetary award to compensate for the harm caused, punitive damages to punish or deter the misconduct, and possibly others.
In cases of a fraudulently induced contract, fraud may serve as a defense in a civil action for breach of contract or specific performance of contract. Similarly, fraud may serve as a basis for a court to invoke its equitable jurisdiction.
Forensic Accounting - Tool for Fraud PreventionCA. Sanjay Ruia
The document discusses forensic accounting as a tool for fraud detection and prevention in the public sector. It examines the use of forensic accountants in selected ministries in Kogi State, Nigeria. The study found that the use of forensic accounting significantly reduces fraud cases compared to traditional external auditors. Forensic accountants are better equipped than external auditors to detect and prevent fraud through their investigative skills and fraud-focused approach. The document recommends replacing external auditors with forensic accountants in Kogi State and providing training to staff on forensic accounting techniques.
This summary analyzes a document that examines the relationship between corruption and welfare per capita. The document aims to determine if there is an optimal level of corruption that results in the highest welfare per capita for a country. It reviews literature on both the negative and positive impacts of corruption. While most research finds corruption harms economies, some argue it can facilitate growth in certain situations by reducing bureaucracy. The document uses corruption, GDP, and economic freedom data to estimate regression models analyzing this relationship. It hypothesizes an inverted U-shape, where moderate corruption may boost welfare more than very low or high levels by maneuvering around red tape but not undermining institutions.
The document outlines 4 major whistleblower programs in the United States: 1) The SEC Whistleblower Program created by Dodd-Frank which offers financial rewards for reporting securities violations. 2) The Sarbanes-Oxley Whistleblower Program which protects employees who report accounting fraud and securities violations. 3) The CFTC Whistleblower Program established by Dodd-Frank which rewards reports of commodities and futures trading fraud with 10-30% of sanctions. 4) The Foreign Corrupt Practices Act program run by the DOJ and SEC which rewards reporting of international financial crimes like money laundering. These programs are designed to encourage whistleblowing and protect whistleblowers.
The document outlines 4 major US whistleblower programs: 1) The SEC Whistleblower Program established by Dodd-Frank which offers financial rewards for reporting securities violations. 2) The Sarbanes-Oxley Whistleblower Program which protects employees who report accounting fraud and securities violations. 3) The CFTC Whistleblower Program established by Dodd-Frank which rewards reports of commodities and futures trading fraud. 4) The Foreign Corrupt Practices Act program run by the DOJ and SEC which rewards reports of international financial crimes like money laundering. These programs are designed to encourage whistleblowing and protect whistleblowers from retaliation.
What is fraud?
A fraud is defined as a wrongful or criminal deception intended to result in financial or personal gain. "He was convicted of fraud" a person or thing intended to deceive others, typically by unjustifiably claiming or being credited with accomplishments or qualities.
What is Fraud Law?
In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate civil law (e.g., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compensation) or criminal law (e.g., a fraud perpetrator may be prosecuted and imprisoned by governmental authorities), or it may cause no loss of money, property, or legal right but still be an element of another civil or criminal wrong.
The purpose of fraud may be monetary gain or other benefits, for example by obtaining a passport, travel document, or driver's license, or mortgage fraud, where the perpetrator may attempt to qualify for a mortgage by way of false statements.
Terminology
Fraud can be defined as either a civil wrong or a criminal act. For civil fraud, a government agency or person or entity harmed by fraud may bring litigation to stop the fraud, seek monetary damages, or both. For criminal fraud, a person may be prosecuted for the fraud and potentially face fines, incarceration, or both.
This document analyzes different fraud theories - the fraud triangle, fraud diamond, and fraud pentagon - and their ability to detect corporate fraud in Indonesia. It reviews the literature on each theory and their components (pressure, opportunity, rationalization, capability, arrogance). The study uses secondary data from 310 publicly listed Indonesian companies from 2012-2017 to empirically test if the theories significantly affect corporate fraud. The results of statistical tests show the data supports all the hypotheses, indicating all three fraud theories can be used to investigate corporate fraud based only on publicly available secondary data.
Fraud is an economic and social menace with multiplier adverse consequences
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proffering a permanent solution to this monster called fraud. The aim of this study
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governance tool in reducing fraud and improving internal control systems in the
Banking Industry. A Likert scale questionnaire was designed and used as the
research instrument for data generation from respondents. 120 questionnaires
were administered to bankers in Benin City using the judgmental sampling
technique. Data obtained were analyzed using Binomial test. Findings from the
study revealed that forensic accounting aside significantly reducing fraud in the
banking industry, has helped to improve considerably the internal control systems
of banks. It was recommended that the regulatory agencies and shareholders
should strictly enforce forensic accounting of banks and ensure that both internal
control and internal audit staff embrace this emerging trend. Similarly,
accounting professional bodies and academic institutions should provide the
required specialized courses to ensure that forensic accounting personnel are
adequately trained. Bank employees should be duly sensitize on the dangers
inherent in fraud and the imperative of morals. Finally, stakeholders should
cooperate to ensure a fraud free banking industry.
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Application of forensic audit and investigation in resolving tax related fraud and malfeasance
1. 1
APPLICATION OF FORENSIC AUDIT AND INVESTIGATION IN
RESOLVING TAX RELATED FRAUD AND MALFEASANCE
By
Cordelia Onyinyechi Omodera B.Sc., M.Sc.,ACA, Doctoral Student of Accounting
(Michael Okpara University of Agriculture, Umudike, Umuahia, Abia State,
Nigeria Affiliation: Medonice Consulting and Research Institute, Port Harcourt.
Abstract
The incessant tax related fraud and malfeasance 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. In view of the above, this paper considers the application of forensic
audit and investigation in resolving tax related fraud and malfeasance. The study is a
theoretical research which considers the roles of forensic auditors in combating
fraudulent activities, distinction of forensic auditor and statutory auditor, and impact of
forensic auditor on corporate governance. Based on the findings; this paper concludes
that forensic auditing has improved management accountability, strengthened external
auditor’s independence and assisting audit committee members in carrying out their
oversight function by providing them assurance on internal audit report have impacted
positively to corporate governance, thereby reducing tax related fraud and malfeasance.
Therefore the study recommends that; the service of forensic auditors should be
employed in Nigerian organisations.
Keywords: Forensic Audit, External Auditor, Tax Evasion, Tax Avoidance,
Fraud, Malfeasance, Corporate Governance.
2. 2
Introduction
The incessant tax related fraud & malfeasance and its impact on corporate
performance has led to the need for multi-dimensional relationship (that is inter-
relationship between the audit committee, the external auditor and the management) in
corporate governance as to protecting the interest of shareholders and other market
participants with the common goal of improving oversight function and ensuring good
corporate governance (Deloitte and Touch 2006). However, in spite of the multi
dimensional relationship between the three major groups in corporate governance, tax
related fraud & malfeasance which had led to poor performance and most times to
corporate collapse resulting to huge lost of investment and impoverishment of many
investors has continued to be on increase (Rezae 2005). Ramaswamy (2009) in line with
the above statement there is a great need for skilled professionals that can identify,
expose and prevent weaknesses in three key areas: poor corporate governance, flawed
internal controls and fraudulent financial statements. Owojori and Asoula (2009) states
that the Failure of Statutory audit to prevent and reduce misappropriation of corporate
fraud and increase in corporate crime has put pressure on the professional
accountant and legal practitioner to find a better way of exposing fraud in business
world .
The above problems have posed serious concern to the accounting
profession, and users of accounting information, thus giving rise to the call for
forensic auditors. In view of the above, this paper aims at examining the application of
forensic audit and investigation in resolving tax related fraud and malfeasance.
Objectives of the Study
In view of the above problem this study considers the following:
i. Examining the application of forensic audit and investigation in combating
fraudulent activities in corporate organization.
ii. Determining the characteristics required by forensic auditors as to combat
fraudulent activities.
iii. Differentiating between Forensic Auditor and Financial Auditor.
Methodology
This paper is a theoretical study on the application of forensic audit and
investigation in resolving tax related fraud and malfeasance and it which employed the
3. 3
secondary source of data collection by making use of available literature on forensic
auditing and investigations with respect to resolving tax related fraud and malfeasance.
Literature Review
The Concept of Fraud
Different scholars have varied definitions of fraud. Adewumi (1986) defined fraud
as a conscious premeditated action of a person or group of persons with the intention of
altering the truth and or fact for selfish personal monetary gain. It involves the use of
deceit and trick and sometimes highly intelligent cunning and know-how. Watoseninyi
(1996) views fraud as irregularity involving criminal deception to obtain an unjust or
illegal advantage. He further explains that fraud is the deviation of a person’s or
organisation’s money or goods for satisfaction of personal or selfish desires using
criminal deception techniques which are identified to include defalcation by way of
misappropriation of money or goods or manipulation of accounts. From the legal point
of view, fraud situates itself as generic term which embraces all multifarious means,
which human ingenuity can devise, that are resorted to by one individual to get an
advantage over another by false pretences (Nigerian Criminal Code, 1990). According to
Chambers Universal Learners’ Dictionary (1985), a The defunct Common Law Manual
(Masango, 1998) argues that fraud is an unlawful making, with intention to defraud, a
misrepresentation which causes actual prejudice or which is potentially prejudicial to
another. It identifies essential elements as follows: unlawfulness, misrepresentation
(which could be in the form of words, conduct, or failure to disclose); prejudice (which
could either be actual or potential), and intention.
The United States Association of Fraud Examiners (1999), in a rather conservative
fashion, identifies fraud as the fraudulent conversion and obtaining of money or property
by false pretences; included are larcenies by bailee and bad cheque. Ihiagarajah (2008)
views fraud to mean any of a number of actions carried out with the intent of defrauding
an institution or organisation. Similarly, the concept has been stated to mean the use of
fraudulent means to obtain money, assets, or other property owned or held by an
organisation (Wikipedia, 2013). One thing stands out from the various definitions above
which is the fact that fraud vary widely in nature, character and method of perpetration.
4. 4
The Concept Misfeasance
Misfeasance in public office is a cause of action in the civil
courts of England and Wales and certain Commonwealth countries. It is an action
against the holder of a public office, alleging in essence that the office-holder has
misused or abused his power. The tort can be traced back to 1703 when Chief Justice Sir
John Holt decided that a landowner could sue a police Constable who deprived him of
his right to vote (Ashby v White), (Hill and Hill,2005). The tort was revived in 1985
when it was used so that French turkey producers could sue the Ministry of
Agriculture over a dispute that harmed their sales.
In theory, misfeasance is distinct from nonfeasance. Nonfeasance is a term that
describes a failure to act that results in harm to another party. Misfeasance, by contrast,
describes some affirmative act that, though legal, causes harm. In practice, the
distinction is confusing and un-instructive. Courts often have difficulty determining
whether harm resulted from a failure to act or from an act that was improperly
performed.
Malfeasance is a comprehensive term used in both civil and Criminal Law to
describe any act that is wrongful. It is not a distinct crime or TORT, but may be
used generally to describe any act that is criminal or that is wrongful and gives
rise to, or somehow contributes to, the injury of another person, (West's
Encyclopedia of American Law, 2008).
Malfeasance is an affirmative act that is illegal or wrongful. In tort law it is
distinct from misfeasance, which is an act that is not illegal but is improperly
performed. It is also distinct from Nonfeasance, which is a failure to act that
results in injury.
Malfeasance is intentionally doing something either legally or morally wrong
which one had no right to do. It always involves dishonesty, illegality, or knowingly
exceeding authority for improper reasons. Malfeasance is distinguished
from "misfeasance," which is committing a wrong or error by mistake, negligence
or inadvertence, but not by intentional wrongdoing.
The Concept of Forensic Auditing
The concept forensic auditing and forensic accounting are used interchangeably.
The concept has been enunciated by several authors and scholars. According to Dahli
(2008), forensic comes from the Latin word ‘for public’ and specifically to ‘forum’. The
forum was where the Ancient Romans were taught to do business and settle disputes
5. 5
among other things. He further buttressed that forensic relates to the application of
knowledge to legal problems such as crimes. This definition traces the history of
forensic accounting and its application in litigation support. Forensic is as old as history
but its usage got little attention in the past. It is now becoming prominent because of
increase in financial scandals. Joshi (2003) ascribed the origination of forensic
accounting to Kutilya, the first economist whom he said mentioned 40 ways of
embezzlement centuries ago.
However, he stated that the term forensic accounting was coined by Peloubet in
1946, when he defined forensic accounting as the application of accounting knowledge
and investigative skills to identify and resolve legal issues. Crumbley (2003) defined
forensic auditing as an accounting analysis that can uncover possible fraud that is
suitable for presentation in court. A forensic accountant uses his knowledge of
accounting, law, investigative auditing, criminology, and psychology to uncover fraud,
find evidence and present such evidence in court if required. According to him person
who pretends to be something that he is not is fraud, a snare, a deceptive, trick, cheat and
a swindler. Forensic accounting is different from the old debit or credit accounting as it
provides an accounting analysis that is suitable to the organization, which will help in
resolving the disputes that arise in the organization.
Forensic accountants are often retained to analyze, interpret, summarize and
present complex financial and business related issues in a manner, which is both
understandable and properly supported. Albretch and Albretch (2001), described
forensic auditing as the utilization of specialized investigative skills in carrying out an
enquiry conducted in such a manner that the outcome will have application to the court
of law. They further stated that the primary aim of forensic auditing is fraud detection,
unlike the traditional auditing that focuses on review of internal control system, error
identification and prevention. Forensic auditors are experienced auditors, accountants,
and investigators of legal and financial documents that are hired to look into possible
suspicion of fraudulent activity within a company; or are hired by a company who may
just want to prevent fraudulent activities from occurring. It demands reporting, where
accountability of the fraud is established and the report is considered as evidence in the
court of law or in administrative proceedings.
Also known as investigative accounting, forensic accounting is a detailed
examination and analysis of financial documents and records for use as evidence in a
court of law. The term forensic accounting can refer to anything from the execution of a
6. 6
fraud analysis to the recreation of true accounting records after the discovery that they
have been manipulated.
Conceptual Definition of Strategic Tax Behaviors: Tax Evasion, Tax Avoidance
and Licit Savings of Taxes
For the purpose of this study, strategic tax behaviors (or aggressive tax planning
strategies) are all those actions designed solely to minimize corporate tax obligations
whose legality may be under doubt. Three categories of tax behaviors can be identified:
tax evasion, tax avoidance and licit saving of taxes, (Akindele, 2011). Tax evasion can
be synthetically defined as intentional illegal behavior, (behavior involving a direct
violation of tax law, in order to escape payment of taxes).
Tax evasion is the illegal evasion of taxes by individuals, corporations and trusts. Tax
evasion often entails taxpayers deliberately misrepresenting the true state of their affairs
to the tax authorities to reduce their tax liability and includes dishonest tax reporting,
such as declaring less income, profits or gains than the amounts actually earned, or
overstating deductions.
In contrast, tax avoidance is the legal use of tax laws to reduce one's tax burden.
Both tax evasion and avoidance can be viewed as forms of tax noncompliance, as they
describe a range of activities that intend to subvert a state's tax system, although such
classification of tax avoidance is not indisputable, given that avoidance is lawful, within
self-creating systems.
Licit saving of taxes can be defined as commonly accepted forms of behaviors
which are neither against the law nor against the spirit of the law. The scope of each of
these concepts varies from country to country depending on government’s policies, court
decisions, tax authorities’ attitudes and public opinion. In this study, strategic tax
behaviors are therefore all behaviors identified as tax evasion or tax avoidance.
Activities being carried out by Forensic Auditors
Institute of forensic auditors (IFA) defines forensic activity as the activity
that consists of gathering, verifying, processing, analyzing of and reporting on data
in order to obtain facts and or evidence in a predefined context in the area of legal
financial disputes and or regulative (including fraud) and giving preventative
advice. From the above one can say that a forensic auditor is an expert in
accounting with experiences and special skill in Auditing, Fraud detection and
criminology that carries out investigation which is usable in the Law Court. In
7. 7
order to understand activities been carried out by the forensic auditor there is need
to know the objective of forensic audit. The objectives of forensic audit will help
us to understand the role of forensic auditor and its impact on corporate
governance. These objectives are:
To improve management accountability.
To improve corporate governance and the statutory audit function.
To improving financial reporting system.
Help in detecting tax related fraud & malfeasance.
Help in strengthening auditors independence
Providing additional assurance for audit committees.
Financial statement auditors to take greater responsibility for the detection of fraud
and illegal acts when auditing financial statement due to the fact that another set of
auditors (forensic auditors) would be critically evaluating their role.
Forensic audits conceivably could give the audit committees tool to better evaluate
the quality of the financial statement audited by the external auditor.
Table 1. Differences between Forensic Auditing and Financial Auditing
Forensic Auditor Financial Auditor
Forensic auditor or Non-statutory auditor
is employed or appointed by organization
to resolve allegations and detect or
prevent fraudulent activities suspected or
envisaged in the organization. Thus,
Forensic auditors carry out investigation
as to resolve allegations on fraudulent
financial matters through court. Thus, it is
not a normal audit but audit which may or
may not follow auditing procedures and
GAAP in carrying out its function.
Zimbeldam etal (2012) states that, such
audit is a proactive audit which goes
beyond normal audit procedures.
Forensic audit is directed at specific
allegations- Forensic Auditors carries out
Financial auditor or statutory auditor is
usually appointed to carryout statutory
audit. The financial audit is usually
carried out to satisfy statutory
requirements, and ensure that accounts
prepared/maintained are in line with
GAAP. Millichamp (1990) states that the
statutory audit is a compulsory audit which
ensures that financial statement are in line
with GAAP. From the above, it can be said
that statutory auditor may or may not go
beyond the procedural audit since he is not
compelled by law to search for fraud but
rather in carrying out its audit function if
fraud is detected he will unveil it.
Financial audit carried out by the financial
8. 8
investigation on specific allegations.
Hence he has much time to investigate and
analyze thoroughly specific fraudulent
financial issue with emphasis of using such
as evidence in law court in case of dispute
(Albrecht and Albrecht 2009).
Forensic Auditor is not apt to accept
explanations and documents at face value
– Forensic Auditors is not apt to
accept explanations and documents at face
value, (Cole 2009). From the above the
forensic auditor is expected to always go
beyond the normal audit and search for
fraud which are to be reported to who so
ever have appointed the forensic auditor
or to be used as expert evidence in the law
courts.
auditor is general in nature. According to
Millucky and Mac (2013) Financial audit
is carried out on general financial
matters.(that means the auditor considers
all issues which concerns all relating to
accounting).
Financial auditors usually do not burrow
deeper into documents and explanations
– This means that financial auditor
usually do not carry out detailed
analytical study of financial documents and
explanations rather the try to lay credence
that accounts prepared by management
and their employees are in line with
GAAP and statutory regulation, (Cole
2009)
Responsibilities of Forensic Auditors in combating Fraudulent Activities and
Malfeasance
The forensic auditors or fraud auditors have the responsibilities that are listed
below:
i. Conducting Investigation: The forensic auditor does not carry out procedural audit,
but carries an audit which conducts investigation as to detect fraud or crime using
computer programs or scientific knowledge. This means the forensic auditor should
have the capability to use computer forensic tools that could be both software and
hardware in carrying out its function as to detect or prevent fraudulent activities. Thus
by using the computer forensic tools in carrying out his responsibilities, sophisticated
fraudulent activities can be combated.
ii. Analyzing Financial Transaction: Forensic auditor in carrying out his
function analyzes financial transaction involving unauthorized transfers of cash
between companies. (Owojori and Asolu 2009). Cole (2009) states that the forensic
auditors are required to have special skills in inspecting documents for
9. 9
authenticity, alteration, forgery or counterfeiting. Hence, by possessing such skills, the
forensic auditor in carrying out his duties can easily detect errors, fraudulent
activities and omissions thereby preventing and reducing fraudulent activities.
zimbleman et-al (2012) states that the forensic auditor is responsible for analyzing,
identifying the kinds of fraud that could occur and their symptoms.
iii. Reconstruction of incomplete accounting records: The forensic auditor in
carrying out his function reconstructs incomplete accounting records as to settle
insurance claims, over inventory valuation, proving money laundering activities by
reconstructing cash transactions. (Owojori and Asaolu 2009). In order to combat
fraudulent activities, the forensic auditor with his skills (Technological, communication
and expertise skills) in accounting knowledge can reconstruct incomplete accounting
records, hence helping to detect and prevent fraud and ensuring good internal control
system and good corporate governance.
iv. Embezzlement investigation: In carrying out embezzlement investigation and
providing documentation, and negotiation of insurance settlements the forensic auditor
uses his special skill and experience, thus helping to detect the culprit and amount
embezzled.
Cabole (2009) states that what forensic auditors do includes:
a. Fraud detection, documentation and presentation in criminal trials and claims.
b. Calculate economic damages; trace income and assets, often in an attempt to find
hidden assets or income,
c Reconstruction of financial statement that may have been destroyed or
manipulated. iv. Expert witness.
The above responsibilities listed by Cabole (2009) and Wallace (2009) show that
the forensic auditors must be specialist (experts) in financial matters and must have legal
knowledge which could enable him detect fraudulent activities which are to be presented
in the law suit.
Detecting Tax related fraud & malfeasance
With the use of analytical and technological skill, the forensic auditor can
easily detect tax related fraud and malfeasance perpetrated by management thereby
preventing corporate failure and ensuring good corporate governance. Cleary and
Thibodean, (2005) states that the forensic auditor knows how to detect and prevent
business fraud using Benford law (a fraud analytical digital tool). Thus, from the above,
it could be said that forensic auditors in helping to detect and prevent fraudulent
10. 10
activities could be seen to have helped organizations in reducing tax related fraud
& malfeasance which most time had led to corporate collapse.
Conclusion and Recommendations
The capability to detect fraud or tax evasion is crucial to tax compliance. As it
would not be practical to audit all cases, the fear of being caught would be sufficient to
act as a deterrent. Tax officials should be exposed to adequate and continuous training;
both at home and abroad, for a better understanding of recent domestic and international
tax issues, which could then be utilized, to formulate successful tax compliance
strategies. The importance of forensic auditing cannot be underestimated as a result of
global persistent perpetration of fraud in organisations. This indeed has made researchers
and management of companies to look into other means of tackling and reducing the
menace of fraud. The following recommendations are therefore made:
1. The service of forensic auditors should be employed in Nigerian organisations. This
could be done by amending the existing statutes, thereby making forensic auditors one of
the audit team.
2. Forensic auditing should be taught in tertiary institutions to better train accountants in
the field.
3. There should be ethical campaign among employees towards developing high moral
standards.
4. Practicing Accountants should also specialize in forensic auditing.
5. Fraud perpetrators should be properly sanctioned without any fear or favour
11. 11
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