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![Evidence and Admissibility of Evidence in Court/8
However, a party who waves his right to Cross examine cannot subsequently exercise
such right. A party who does not apply to cross examine a witness before the party for
whom that witness testifies closes his case cannot subsequently during his own case,
apply for leave to cross examine such witness. see Onwuka v Owolewa supra P775,
Para. F.
Waiver is the voluntary relinquishment or abandonment, express or implied, of a legal
right or advantage. The party alleged to have waived a right must have had both
knowledge of the existing right and the intention of foregoing it. See Edozien v.
Edozien (1998) 12 NWLR (Pt.580) 133 referred to] (P. 714, Para. A). See Oniah v. Onyia
(1989) 1 NWLR (Pt.99) page 514 wherein Karibi Whyte JSC stated inter alia that: “The
concept of waiver presupposed that a person who is to enjoy a benefit or who has the
choice of two benefits fully aware of the benefits and has either neglected to exercise
his right to the benefit or exercise must be voluntary”.
For a party to be deemed to have waived his right to Cross examine he must have
knowledge of the existence of such right. If that party is not in court, the party who
called the witness in evidence in chief cannot apply to the court to close his case or
foreclose the other party from cross examining the witness without hearing notices
issued on the other side and proof of such notice. When the court forecloses the other
party from cross examining when such party has not been issued a hearing notice or is
deemed to have waived his right, amounts to breach of right to fair hearing.
SIMILAR CASES
OF RIGHT IN
CROSS
EXAMINATION OF
EVIDENCE](https://image.slidesharecdn.com/lagosstateauditorgeneralsofficefundamentalsofforensicaccounting-profgodwinoyedokun-240630214439-0336d51e/75/Lagos-State-Auditor-General-s-office-Fundamentals-of-Forensic-Accounting-Prof-Godwin-Oyedokun-pptx-58-2048.jpg)
Lagos State Auditor General's office Fundamentals of Forensic Accounting - Prof Godwin Oyedokun.pptx
The document outlines the fundamentals of forensic accounting as presented in a lecture by Professor Godwin Emmanuel Oyedokun, covering its applications, necessary skills, ethical considerations, and investigative techniques. Forensic accounting is defined as the integration of accounting, auditing, and investigative skills to resolve financial disputes and detect fraud, making it essential in legal contexts. The evolution of forensic accounting is traced from early 20th century practices to modern techniques involving technology and ongoing education in response to fraud and financial crimes.
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Lagos State Auditor General's office Fundamentals of Forensic Accounting - Prof Godwin Oyedokun.pptx
- 1. Fundamentals of ForensicAccounting Being a Lecture delivered at the Lagos State Office of Auditor General Staff Training on Monday, February 20, 2023. Prof. Godwin Emmanuel Oyedokun Professor of Accounting and Financial Development Department of Management & Accounting Faculty of Management and Social Sciences Lead City University, Ibadan, Nigeria Principal Partner; Oyedokun Godwin Emmanuel & Co (Chartered Accountants, Tax Practitioners & Forensic Auditors)
- 2. ND (Fin), HND(Acct.), BSc. (Acct. Ed), BSc (Fin.), BSc. (Bus. Admin), MBA (Acct. & Fin.), MSc. (Acct.), MSc. (Bus & Econs), MSc (Tax), MTP (SA), PhD (Acct), PhD (Fin), PhD (FA), FCA, FCTI, FCIB, ACS, ACIS, MNIM, FCNA, FCFIP, FCE, FERP, CICA, CFA, CFE, CIPFA, CPFA, ACAMS, ABR, CertIFR, IPA, IFA, FFAR, FPD-CR, FSEAN, FNIOAM, ACIrb
- 3.
- 4. Introduction Concept of Forensic Accounting Applicationof Forensic Accounting Forensic Accountant: Required Knowledge, Skills, and Abilities Forensic Accounting, Techniques and Set Skills Ethical Conduct for a Forensic Accountant Forensic Accounting Investigation Evolution of Forensic Accounting Auditing, Investigations, and Forensic Accounting Information Gathering and Admissibility of Evidence in Court Forensic Accounting Source Document Preserving Evidence of Gathered for Court Admissibility Forensic Data Analytical Tools Evidence and Admissibility of Evidence in Court Preservation and Analysis of Information Gathered for Evidence Admissibility Conclusion Recommendations Contents
- 5. Introduction Forensic accounting isa special type of financial knowledge which aims to detect and prevent fraud and other crimes Forensic accounting is a valuable investigation technique that allows information found in a company's financial statement and transactions to be presented in a way that is suitable for court The main goal of forensic investigation is to provide precise and accurate information about certain phenomena (events) based on the established processes and methodologies, along with the appropriate policies, best practices, and guidelines that stem from the theoretical foundations of forensic science (Slot 2012)
- 6. Introduction Forensic accountants compilefinancial evidence, develop computer applications to manage the information collected and communicate their findings in the form of reports or presentations The majority of the digital forensics community finds it agreeable, acceptable, and a correct reflection of reality within the specific scientific discipline, the theoretical basis acts as a foundation for the development of the tools and techniques used to carry out the different activities of a forensic process
- 7. Concept of ForensicAccounting 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.
- 8. Forensic Accounting Forensic accountinguses accounting, auditing, and investigative skills to conduct investigations into theft and fraud, encompasses litigation support investigative accounting Forensic accounting is the application of skills in potential or actual civil or criminal disputes, including commonly accepted accounting and auditing principles in establishing losses of profit, income, property, or damage, estimations of internal controls, frauds, and other such things that involve inclusion of accounting expertise into the legal system Forensic accounting refers to the application of analytical and investigative skills for the purpose of resolving financial issues in a manner that meets standards required by court of law Forensic accounting as a scientific accounting method for the detection, resolution, analysis and presentation of fraud cases that can be used in court (Oyedokun, 2013)
- 9. Component of ForensicAccounting Financial Accounting Economics Analysis Fiscal and Criminal Law Psychological Administrative Investigative Dispensation
- 10. 1 0 Branches of Accounting Financial Accounting Management Accounting CostAccounting Tax Accounting (Taxation) Project Accounting Not-For-Profit Accounting Petroleum/Oil and Gas Accounting International Accounting
- 11. 1 1 Branches of Accounting Auditing FiduciaryAccounting Financial Reporting Human Resources Accounting Corporate Accounting Accounting Information Systems Social Accounting Government Accounting Forensic Accounting
- 12. Forensic Accountant Skills Goodanalytical skills Creative thinking skill Strong knowledge of the legal environment Unstructured problem-solving competence Investigative flexibility Analytical proficiency including oral and written communication ability Practical business experience
- 13. Application of ForensicAccounting Fraud and white-collar crime investigations Criminal and civil investigations Preparation of expert reports, reviews and evidence Testifying as an expert witness Insolvency and liquidation support investigation Fraud prevention and awareness strategies
- 14. Application of ForensicAccounting Fraud and fund tracing Civil and criminal actions regarding fraud and financial irregularities Breach of contract Breach of warranty, particularly on company acquisitions Insurance claims Liquidation support Analyzing Financial Transactions Reconstruction of Incomplete Accounting Records
- 15. Application of ForensicAccounting Regulatory enquiries Investigations Financial Surveillance Anti-Money Laundering Programs Fraud and risk management surveys and reports Background checks
- 17. Forensic Accountant: RequiredKnowledge, Skills, and Abilities Ability to identify frauds with minimal initial information Interviewing Skill Mind-set Knowledge of Evidence Presentation of Findings Knowledge of Investigative Techniques Investigative skills are needed in litigation support Identification of Financial Issues Interpretation of Financial Information
- 18. Forensic Accounting, Techniquesand Set Skills Forensic accounting investigation involves things wherever there are unit prospects that dishonest accounting and reportage have occurred, and there is unit misappropriation of assets (Ranallo, 2006) Forensic accounting investigation tries to spot dishonest transactions by reviewing transactions mistreatment document reviews, interviews, and examination of electronic media Forensic accounting investigation area unit typically times intense and since the results could also be employed in court reviews, there's a really high proof commonplace that has to be maintained once forensic accounting investigations area unit is created Forensic accounting investigation typically uses interview techniques designed to get associate degree admission of guilt by the person(s) involved in the fraud theme The investigations additionally involve elaborate document reviews It’s vital that forensic accountants properly structure the interview method as a result of the results of the interview could also be employed in court and judgment processes
- 19. Forensic Accounting, Techniquesand Set Skills Data mining is the use of specialised software to search for anomalies, trends, and correlations in datasets in order to anticipate outcomes It’s easier to extract hidden predictive information from massive databases and has the ability to help companies spot patterns, abnormalities, and other odd actions, allowing businesses to make proactive knowledge-driven decisions Data mining software, which has scripting capabilities and can scan businesses' datasets for abnormalities and suspicious patterns that are indications of fraud, is particularly useful in identifying fraud This technique depends on trying to mine a large amount of data in search of any new hidden or unexpected patterns or information, and this technique is implemented through computer programs designed for this purpose • Discovery: it is the links, trends and differences of data that are discovered logically or legally without any prior assumption about what the pattern is, that is, without prior knowledge of the fraud • Forecasting models: used to estimate the outputs that should be obtained from new values • Distinctiveness analysis: we extract the variance or difference by first identifying the rule or standard, and then we find the items that depart from the standard or rule, which are called anomalies and require additional examination Data Mining
- 20. Forensic Accounting, Techniquesand Set Skills Continuous Control Continuous Control is regarded as one of the forensic accounting approaches used to gather evidence of fraud Processes for continuous control are centred in audit departments, branches, customers, and agency owner Ratio Analysis Ratio Analysis is a forensic accounting approach, ratio analysis is performed to evaluate data on a historical, industry, or benchmark basis It detects fraud by studying data patterns to identify potentially deceptive transactions Ratio analysis is the process of determining the links between various financial statement items as well as these items and nonfinancial data Vertical analysis compares aspects of a financial statement to a common base item, Vertical analysis converts financial statements into percentages Horizontal analysis is used to analyse the ratio of change in distinct financial statement items over a specific period, horizontal analysis is concerned with changes throughout time
- 21. Forensic Accounting, Techniquesand Set Skills Benford's Law • Benford’s Law describes the sequence in which multiple numbers from real-life sources can be distributed in a specific, non-uniform way (Wells, 2012) • It has been established that this technique is applied in the summarization after the classification of the first digit field and the calculation of the observed count percentage • This technique is useful to determine if the variables under study was a result of fraud or unintentional error • It is one of the forensic accounting approaches, as well as one of the major rules in mathematics and statistics that have been used in auditing operations Computer-Assisted Auditing Software • These are computer programs that forensic accountants could make use of, in the audit procedure to process data of audit significance in client’s information system and at the same time not depending on that client • This technique assists experts in investigative and forensic accounting assignments to perform auditing procedures such as: Testing of transactions and balances in details; the identification of any inconsistencies or significant fluctuations; general testing in addition to computer systems application; sampling program in extracting data for audit testing; and the recording of the calculations performed by accounting systems • Technology is used and employed to perform certain auditing job that assists the forensic accountant in completing his assignment more efficiently, quickly, and at a reduced cost • The use of this technology requires the availability of all the necessary information for the process of auditing computer systems
- 22. Forensic Accounting, Techniquesand Set Skills Relative Size Factor (RSF) • This approach is the ratio of the greatest numbers in a given set to the second largest number, and when applied to figures, the unusual deviations may be traced back to fraud or actual errors (Wadhwa & Pal, 2012; Yadav & Yadav, 2013). • The authors also said that if any stray case is discovered outside of the typical range, more examination may be necessary to aid in the discovery of abnormalities or patterns. Net Worth Approach (NWA) • According to Biber (2010), there are two techniques for assessing and confirming taxpayers' income: which are the Direct Method and the Indirect Method • The direct method is the specific item relied upon in verifying income and expenses by referring to the books and records used in the preparation of the relevant tax computations while the indirect method involves the determination of tax liabilities through an analysis of a taxpayer’s financial affairs accumulating information beyond the taxpayer’s declaration and formal books and records (Biber, 2010). Net Worth Comparative Method • This approach is like NWA, but in its own application, the current net worth of the taxpayer will be compared with the value of the cumulative years in identifying the difference and treat as income not disclosed for the current year.
- 23. Forensic Accounting, Techniquesand Set Skills Expenditure Approach • This involves the use of the expenditure of the taxpayer to determine the undisclosed income • This approach assumes that every expenditure must have its respective source and if this has not been included in the income disclosed by the taxpayer, then the forensic accountants and the tax authorities will treat as undisclosed income and will be adequately taxed • Biber (2010) asserted that the purchasing of capital items by cash, personal and business loan repayments through cash, personal expenses paid with cash, in addition to increases in cash on hand should be determined through an in-depth examination of taxpayer’s financial affair Trend Analysis • The emphasis is on transactions that are unusual in nature • Certain transactions may be difficult to recognise from current data, but when the transactions' current records are compared to past year data entries, they can readily be identified as fraudulent • It is simple to determine if the level of sales rises at the same pace as the level of bad debts increases in a business by comparing sales and bad debts data over time • In such a case, it is reasonable to believe that such bad debts are the result of fraudulent sales transactions or manipulations made into the system to improve turnover. Such fraudulent changes could not be detected without the use of trend analysis during a certain time period
- 24. Forensic Accounting, Techniquesand Set Skills Beneish Model • The Beneish Model is one of the most amazing instruments in rhetorical accounting research. Messod Daniel Beneish, an accounting professor at Indiana University, developed the Beneish model • The variables used in this model are obtained from the business entity's record and profit and loss statement (Beneish, 1999) • The Beneish Model enables rhetorical accountants to evaluate corporate financial accounts from several perspectives. • According to the Beneish Model, the following variables have a high potential for detecting monetary data manipulation by business entities: days' sales in assets index; quality index; total accruals to total assets index; leverage index; sales; general and body expenses index; sales growth index; depreciation index; and margin of profit index. Beneish Model reveals that, higher days' sales in assets, higher accruals, higher declines in gross margins, and higher quality indicators of economic data manipulation (Mbasiti, Gyang & Ojaide, 2021).
- 25. Forensic Accounting, Techniquesand Set Skills • This denotes the sending of information, tips and ideas that could aid the prosecution of fraudsters without revelation of identity • Anonymous tips come in a wide variety of forms and quite several channels and are addressed to various individuals and groups within or outside the entity • Anonymous communication tip includes comments from suggestion box; emails messages; anonymous phone calls and letters; posts on bulletin boards, written confirmation from debtors or/and creditors; fax messages (Ezenwafor & Udukeke, 2019). • The recipients of anonymous communications within a business organisation include legal counsel, audit committee members, senior management, departmental supervisors and the compliance or ethics officer • Agbawe (2012) maintained that tips may also be duplicated from news agencies, competitors, internet website postings, chat rooms or government agencies Anonymous Communicatio
- 26. Ethical Conduct forA Forensic Accountant Integrity Objectivity Professional Competence and Due Care Confidentiality Professional Behavior
- 27. Forensic Investigation isanother 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
- 28. A forensic investigatorcan 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 Assisting in legal proceedings, including testifying in court as an expert witness and preparing visual aids to Forensic Accounting Investigation
- 29. Evolution of ForensicAccounting/1 The earliest known evidence of forensic accounting has been traced to an advertisement in a newspaper in Glasgow, Scotland, appearing in 1824 At that time, arbiters’ courts and counsels used forensic accountants to investigate fraudulent activities However, it was not unit the early 1900s in the United States and England, when articles provided guidance on giving expert testimony appeared (Erumbley, 2003) As the forensic accounting profession has grown over time, several publications have been produced to provide guidance In 1946, Maurice Peloubet an accountant from New York published the article entitled forensic accounting its place in today’s economy The book, forensic accountings the accountant as an export witness was written by Francis C. Dykeman, (1982) The American institute of certified public accountants (AICPA) issued practice aid 7 in 1986, which outline six areas of litigation services which include damage antitrust and accounting
- 30. Evolution of ForensicAccounting/2 The constant need for forensic accounting in fighting crimes has resulted from regulatory and criminal passed over time In the early 1900s, the adoption of the federal income tax evasion As a result, the internal revenue service (IRS) developed many of the forensic techniques s used to detect tax evaders One of the first income tax evasion cases uncovered by forensic accountants was that of the infamous gangster, al Capone During World War II, the federal Bureau of Investigation (FBI) employs over 500 forensic accountants who were used to employed and monitor financial transactions (Ziegenfuss, 2003) Equally important is the creation of a culture and environment which is aimed at the prevention of fraud and a response policy which is designed to respond to fraud detection as effectively as possible According to a report released by Nedcor, crime cost South Africa R31 billion rends in 1994/1995 A large part of this amount can be attributed to white – collar crime
- 31. Evolution of ForensicAccounting/3 Like any other job, forensic accounting has evolved with time The industry has been affected by changes in technology, society, and the economy As one aspect of the world changes so has the job of a Forensic Accountant Continuous education is only one way in which forensic accountants learn how to adjust to new challenges The profession has been around since the early 1900s and has altered the way fraud is discovered and handled since its inception In the 1990s the FBI announced that white – collar crime made up only 5% of all case they saw They also noted that white – collar crime was responsible for 95% of the financials losses suffered by victims (Manning, 2005) Forensic Accountants are used to mitigating these losses and recover them if possible
- 32. Evolution of ForensicAccounting/4 Forensic accounting has gained recognition in the past few decades with the publicity of high-profile criminal cases. However, the profession is anything but new, with evidence dating back to its presence in the 16th century. As the field continues to expand, the need for educated professionals is growing too, and for those looking for a more exciting path within an accounting career, forensic accounting is proving to fill that void. Forensic accounting is also making its debut in educational venues across the country, sparking the interest of many intrigued students and causing them to ask
- 33. Auditing, Investigations, andForensic Accounting - Similarities and Differences Auditing checks the accuracy and authenticity of accounting records to make sure that the financial statements comply with the relevant accounting standards An audit involves the examination of financial statements, which are the records of the financial activities of a business or any other non-profit organization that include net profits, expenditure, investment activities, etc. Audit is the active verification and a critical assessment of the accounting system of an organisation Audit is a check on fraudulent activities inside the organization and hence is conducted by external entities like the government or the stakeholders The main objective of auditing is to check for any errors in these statements and ensure an accurate representation of the financial position of an organization Auditing
- 34. Auditing, Investigations, andForensic Accounting - Similarities and Differences Powers and Duties of an Auditor Right to Access • The power of an auditor includes the right to access the books of accounts and vouchers of the company at all time • The auditor is entitled to obtain information as and when it is necessary for him to perform his duties Right to Inquire • The auditor also has the power to inquire into the matters of the company relating to the advancing of loans, any transactions, assets and liabilities, etc. Duty to Report on Financial Matters • The auditor is required to make reports on the financial statements and accounts which are examined by him • The auditor in an audit report shall give information to the best of his knowledge and the true financial position of the company at the end of a financial year Duty to Comply with the Auditing Standards • The auditor is required to comply with the auditing standards which have been recommended by the Institute of Chartered Accountants Duty to Disclose Fraud • The auditor, on examination, on finding some evidence or has a reason to believe that there have been instances of fraud on part of the company employees against the interests of the company in its financial matters, must disclose such fraud to the government • Such a disclosure needs to be done to the central government Duty to Sign Audit Reports • The auditor has to sign the audit report made by him and all such documents of the company
- 35. Auditing, Investigations, andForensic Accounting - Similarities and Differences Powers and Duties of an Auditor All these powers given to the statutory auditors allow them to conduct audits independently and make unbiased reports. However, their independence came into question in the case Central Bureau of Investigation, Hyderabad v. Subramani Gopalakrishnan, 2011 as it was found that the auditors had aided the management to commit the accounting fraud that led to great losses to the company.
- 36. Auditing, Investigations, andForensic Accounting - Similarities and Differences Investigation An investigation is a form of an examination or inquiry into the accounts of a company which have to be analyzed for a specific purpose The main objective of an investigation is to collect information or evidence about the financial activities of a business organization The investigation involves finding out the facts of the activity and discovering the truth rather than verifying the accuracy of the accounts The process of investigation involves searching, observation, interrogation, inspection, etc
- 37. Auditing, Investigations, andForensic Accounting - Similarities and Differences Similarities Investigation and Auditing Investigation is similar to auditing and can be called a narrower form of auditing confined to one special purpose Like auditing, an investigation is also conducted by experts according to the required standards of the organization
- 38. Auditing, Investigations, andForensic Accounting - Similarities and Differences Differences Investigation and Auditing BASIS AUDITING INVESTIGATION Meaning Examination of the financial records of a company for verification Enquiry of the financial activities of a company for a special purpose Objectives Check accuracy and find errors Find the cause of errors Nature Mandatory routine Only for special purposes, occasionally Subject matter Examination of all the financial records of a company Examination of only relevant records Scope Wide coverage of records Narrow coverage of records True position Ascertains the true financial position of the company Does not give the true financial position of the company Conducting Authority Only by Chartered Accountants Any inspector appointed Period One financial year No fixed period Predetermined findings Conducted without any predetermined findings Based on some preconceived notion Evidence Gathers only persuasive evidence Gathers conclusive evidence Guiding Standards Guided by standards set by the Institute of Chartered Accountants No set of standards
- 39. Auditing, Investigations, andForensic Accounting - Similarities and Differences Similarities Forensic Accounting vs Auditing Forensic Accounting and Auditing are both disciplines that require a thorough knowledge and understanding of accounting principles and basics They are also carried out by professionals who hold a degree in accountancy
- 40. Auditing, Investigations, andForensic Accounting - Similarities and Differences Investigation in Auditing Investigation in Auditing comprises the counteraction, recognition and measurement of extortion, tax evasion, dread account and debasement Investigation in Auditing includes the assessment of records and the utilization of bookkeeping techniques to find money-related inconsistencies and to follow the movement of assets and funds all through associations
- 41. Auditing, Investigations, andForensic Accounting - Similarities and Differences Types of Investigation in Auditing Acquisition of companies Purchase of business Prospective investments Admission of new partners Fraud Systems breakdown Prospective lending Company Acts Investigation
- 42. Auditing, Investigations, andForensic Accounting - Similarities and Differences Procedures for Conducting Investigation in Auditing • The directions of the clients in regards to nature, degree and objective ought to be acquired in certain and unambiguous terms • The directions should cover the territory of the investigation, the motivation behind the investigation and the period to be researched Determination of Nature and Scope • The finding of the previous steps will choose the further course of the investigation • The rundown of records and reports to be confirmed are to be resolved at this stage keeping the goal and motivation behind the investigation intact Formulation of Investigation Programme • An intensive investigation, i.e., assessment of different records and archives and assessment of different people of the worry, identifying with the investigation region are to be directed • At each stage, the agent may choose the further course of investigation dependent on the conditions and different discoveries Conduct of Investigation • The investigator may respond to every one of his discoveries, break down all the supporting reports and explanations, completely look at the investigation records and make inferences • At the same time, he should have a receptive outlook, free from pre-imagined thoughts Investigation Report
- 43. Information Gathering andAdmissibility 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
- 44. Forensic Accounting Source Document COMPANYDOCUMENT A company is a legal entity, registered for the stated purpose(s) These purposes of every organization are usually included in her various documents which serve as sources of vital information for forensic investigation PRIMARY BOOKS OF ACCOUNT Books used to register daily business activities are an essential source of information in the forensic accounting process Business transactions are to be recorded as daily as at when effected, PERFORMING INTERVIEWS Interviewing is a critical part of a forensic investigation, as it can assist the forensic accountant in establishing the: who, what, when, where, how, and why
- 45. Forensic Accounting SourceDocument RESEARCH The forensic investigator is burdened with the enormous task of obtaining all the information to put the case together (Manning, 2005). A vast amount of information about individuals and businesses can be sourced from public sources, which states that a wide variety of information has been digitized to be available online. The ACFE (2011) identifies the following searches that can be conducted by the forensic accountant: NEWSPAPER/M EDIA DATABASES BACKGROUND SEARCHES INTERNET SEARCHES ASSET SEARCHES COMPANY SEARCHES DEED SEARCH FOR PROPERTY
- 46. Forensic Accounting SourceDocument 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
- 47. Forensic Accounting SourceDocument 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
- 48. Preserving Evidence ofGathered 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
- 49. • This iscritical in any fraud investigation, larger cases mean more documents, so the process of managing them is even more important Document management • Digital Evidence is relatively easy to preserve if you use the help of a knowledgeable professional Engage a Professional • 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 No External Engagement • Investigators should not write on originals in any way or otherwise destroy or mark them Keep Original Document Saved 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
- 50. ANALYTICS Forensic analytics describes theact 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 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 Forensic Data Analytical Tools
- 51. Evidence and Admissibilityof 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: CONCEP T OF EVIDENC E INTELLECTUAL EVIDENCE EMPIRICAL EVIDENCE
- 52. Evidence and Admissibilityof 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 FORMS OF EVIDENCE
- 53. SIMPLICITY This relationshipbetween 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. 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 CHARACTERISTICES OF EVIDENCE Evidence and Admissibility of Evidence in Court/3
- 54. QUALITIES OF LEGAL EVIDENCE Evidenceand Admissibility of Evidence in Court/4 RELEVANT EVIDENCE MATERIAL EVIDENCE PROBATIVE VALUE SAFE CHAIN OF CUSTODY COMPLETE AUTHENTIC ADMISSIBLE RELIABLE BELIEVABLE
- 55. Evidence and Admissibilityof Evidence in Court/5 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 ADMISSIBI LITY OF EVIDENCE IN LAW COURT
- 56. Evidence and Admissibilityof Evidence in Court/6 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.
- 57. Evidence and Admissibilityof Evidence in Court/7 In the case of Onwuka v Owolewa (ca) 2001, Karibi Whyte JSC stated inter alia ……” right to cross examination is important under our civil process by virtue of Section 189 Evidence Act Cap 112 Laws of the Federation of Nigeria 1990. A denial of such right of cross examination is denial of fair hearing to appellant was wrongful exercise of judicial discretion. Mike Omhenkc Obomhvnse v Richard Erhahon 1993) 7 SCNJ 479 at 499;(1993) 7 NWLR (Pt.303) 22 SC; Rasaki Salu v. Madam Towuro Egeibon (1994) 6 SCNJ 223 at 237, (1994) 6 NWLR (Pt.348) 23. Cross examination is an integral part of fair hearing, it goes to the root of a case. Denial of that right can vitiate the entire proceedings. This can serve as a ground for appeal. In Onwuka v Owolewa (ca) 2001 it was held that under the adversarial system of jurisprudence, the art of cross examination is the greatest weapon to attack an adversary. It is fundamental, it is the pivot, the central hub and gravity of the civil system. This is so because, cross examination is based on the rules of pleadings with its source on the rule of natural justice of audi alteram partem (that is, hear the other side). To deny a party the right to cross-examine his adversary without legal reasons amounts to denial of fair hearing as enshrined in sec. 36 (1) of the 1999 Constitution of Nigeria (P. 713, paras. C-H). Where the adverse party is not in court to cross examine the witness, the SIMILAR CASES OF RIGHT IN CROSS EXAMINATION OF EVIDENCE
- 58. Evidence and Admissibilityof Evidence in Court/8 However, a party who waves his right to Cross examine cannot subsequently exercise such right. A party who does not apply to cross examine a witness before the party for whom that witness testifies closes his case cannot subsequently during his own case, apply for leave to cross examine such witness. see Onwuka v Owolewa supra P775, Para. F. Waiver is the voluntary relinquishment or abandonment, express or implied, of a legal right or advantage. The party alleged to have waived a right must have had both knowledge of the existing right and the intention of foregoing it. See Edozien v. Edozien (1998) 12 NWLR (Pt.580) 133 referred to] (P. 714, Para. A). See Oniah v. Onyia (1989) 1 NWLR (Pt.99) page 514 wherein Karibi Whyte JSC stated inter alia that: “The concept of waiver presupposed that a person who is to enjoy a benefit or who has the choice of two benefits fully aware of the benefits and has either neglected to exercise his right to the benefit or exercise must be voluntary”. For a party to be deemed to have waived his right to Cross examine he must have knowledge of the existence of such right. If that party is not in court, the party who called the witness in evidence in chief cannot apply to the court to close his case or foreclose the other party from cross examining the witness without hearing notices issued on the other side and proof of such notice. When the court forecloses the other party from cross examining when such party has not been issued a hearing notice or is deemed to have waived his right, amounts to breach of right to fair hearing. SIMILAR CASES OF RIGHT IN CROSS EXAMINATION OF EVIDENCE
- 59. Insufficient preparationand 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 Evidence and Admissibility of Evidence in Court/9 ATTACKS AGAINST EVIDENCE ON CROSS- EXAMINATION
- 60. Preservation and Analysisof 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.
- 61. The integrityof 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 integrity, 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 Preservation and Analysis of Information Gathered for Evidence Admissibility
- 62. Conclusion Forensic accountants needmany skills to perform their specialized jobs, education and training in accounting and business, as well as communication skills, are necessary alongside techniques Forensic accountants are in high demand because they play a critical role in an investigation of suspected financial scandals and misappropriation of assets, it is their job to bring independence and credibility to these investigations Forensic Accounting experience is gained through simply maturing in the profession, the forensic accounting requires skills in accounting and auditing, taxation, law, economics, information technology, business operations, and management, internal controls, interpersonal relationships, communication, and people Forensic accountants must be as good with people as they are with numbers, they should also be inclined to be aggressive rather than timid and shy
- 63. Recommendations The use ofanonymous communication methods should be encouraged as well as extensive awareness put in place for the attention of the public as well as quick responses from the banks to queries MDAs should mandatorily be required to acquire robust data mining software facilities as well as enhanced training on the application of data mining and its usefulness in the banking sector Government offices in Nigeria are advised to step up their forensic accounting desks in order to deter fraudulent activities Educational and training institutions should consider the inclusion of forensic accounting curriculum in the relevant executive trainings Public and private sectors should engage, recruit, and employ services of forensic accountants to review, strengthen, reappraises records and internal control systems on routine basis
- 64. Prof. Godwin Emmanuel Oyedokun Professorof Accounting and Financial Development Lead City University, Ibadan, Nigeria Principal Partner; Oyedokun Godwin Emmanuel & Co (Chartered Accountants, Tax Practitioners & Forensic Auditors)