EMPIRICAL ANALYSIS OF FORENSIC ACCOUNTING

TECHNIQUES IN CURBING CREATIVE ACCOUNTING

IN NIGERIA

MOSES, AGUVA ISAAC

SU/PG/MSc/16/101012

A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE

REQUIREMENTS FOR THE AWARD OF A MASTER OF SCIENCE

(M.SC.) DEGREE IN ACCOUNTING,

DEPARTMENT OF MANAGEMENT SCIENCES,

COLLEGE OF MANAGEMENT AND SOCIAL SCIENCES,

SCHOOL OF POSTGRADUATE STUDIES,

SALEM UNIVERSITY, LOKOJA.

APRIL, 2019.

i
 CERTIFICATION

This is to certify that this thesis work was carried out by me for the partial fulfillment of
the requirements for the award of a Master of Science (M.Sc.) degree in accounting.

…………………….. …………………… ……………………

Thesis Supervisor Signature Date

…………………….. …………………… ……………………

Thesis Coordinator Signature Date

…………………….. …………………… ……………………

Head of Department Signature Date

ii
 DECLARATION

I declare that this thesis is a product of an original research work conducted by me. It has not
been presented for the award of any degree in any University. The ideas, observations,
comments, suggestions and expressions here in, represent my own convictions except
quotations which have been acknowledged in accordance with conventional academic
traditions.

___________________

MOSES, AGUVA ISAAC

APRIL, 2019.

iii
 DEDICATION

This research work is dedicated to Almighty God, who is the giver of wisdom, knowledge
and understanding.
Also, to my parent,, my precious wife, Moses Angela, my children, Onozasi, Ataba and
Onize for their support and understanding.

iv
 ACKNOWLEDGEMENTS

This research work could not have been successfully carried out without the help of

numerous people who immensely contributed in one way or the other towards the completion

of the work.

I am most grateful to my God, the giver and sustainer of lives, who preserved my life

throughout the period of my study.

My profound gratitude goes to my supervisor, Prof. S. Adediran, who painstakingly read

every line of the manuscript despite the load of work he had, making most valuable criticisms

and corrections, your massive capacity for hard work and intelligence mark you out as star

and a mentor.

I also acknowledged the indefatigable effort of the HOD Accounting, Dr. D. Olopade for his

contribution towards the success of this research work. May God reward you Sir.

My sincere gratitude goes to my beloved parents Mr. and Mrs. Moses Aguva, for all their

prayers and financial support during the course of my studies.

I want to appreciate the contributions of my mentor and also my boss, Alh. Sule, Salihu

Enehe, towards the success of this programme and my life in general. May God reward you

sir.

My gratitude also goes to my superior and friend both in the office and in school, Mr

Ovajimoh Ipemida Shegun, whom God has really used to transform my life in many ways.

His idea brought me to the pursuit of this course. May the good Lord increase you.

I acknowledge the works of the authors of various books, articles, journals, magazines and

newspapers from where useful extracts were made. My special thanks also go to the

organizations I visited for data collection.

v
I equally appreciate all my class mates, especially Mr John Itodo, our amiable class governor,

through whose effort has led to the success of this programme and all other members of the

class. We shall meet at greater heights to celebrate one another until Jesus comes in Jesus

name.

vi
 ABSTRACT

This study empirically examined the role of forensic accounting techniques in curbing
creative accounting. The sample size of the study was estimated using Walpole
formula. The data of the study were generated from primary and secondary sources.
The questionnaire was the major instrument for primary data collection. The
instrument was subjected to both content and faces validity by experts. Reliability test
was conducted using cronbach’s Alpha and the value of 0.90 was delivered. Three
research questions were raised giving three hypotheses which were tested with the
results obtained from primary data that evolved from the survey. The questions were
Likert Structured. And the result of responses were organized using tables to arrange
the responses in Columns and Rows and tested with one way ANOVA using SPSS
version 23.0 statistical package. The result of the tests suggests that we reject the
three stated hypotheses, giving rise to the findings that the techniques used by forensic
accountants have helped in curbing creative accounting, the skills of the forensic
accountant have aided the prevention of creative accounting, and that the emergence
of forensic accountants have restored confidence in credibility of corporate firms and
their report.

vii
Table of Contents
Title-------------------------------------------------------------------------------------------------------------------------------i

Certification ........................................................................................................................................... ii
Declaration ............................................................................................................................................iii
Dedication ..............................................................................................................................................iv
Abstract................................................................................................................................................. vii
Table of contents-----------------------------------------------------------------------------------------------------------viii

List of tables-------------------------------------------------------------------------------------------------------------------x

CHAPTER ONE ........................................................................................................................................ 1

INTRODUCTION...................................................................................................................................... 1
1.2 Statement of the problem .................................................................................................... 3
1.3 Objectives of the study......................................................................................................... 5
1.4 Research questions ............................................................................................................... 6
1.5 Statement of hypotheses ...................................................................................................... 6
1.6 Significance of the study ...................................................................................................... 6
1.7 Scope/ delimitation of the study .......................................................................................... 8
1.8 Limitations of the study ....................................................................................................... 8
CHAPTER TWO ....................................................................................................................................... 9
REVIEW OF RELATED LITERATURE ......................................................................................................... 9
2.1 Introduction .......................................................................................................................... 9
2.3 Theoretical framework ...................................................................................................... 18
2.3 (a) Theory of the fraud diamond ............................................................................................ 18
2.3 (b) Differential association theory of crime ....................................................................... 19
2.3(c) Fraud management theory ............................................................................................ 21
2.4 Forensic accounting and the role of forensic accountants in detecting frauds in
financial statements: ...................................................................................................................... 22
2.5 Drivers of creative accounting .......................................................................................... 25
2.7 Empirical studies............................................................................................................... 28
CHAPTER THREE ................................................................................................................................... 39
RESEARCH METHODOLOGY ................................................................................................................. 39
3.1 Introduction.............................................................................................................................. 39
3.2 Research design .................................................................................................................. 40
3.3 Population of the study ...................................................................................................... 40
3.4 Sample size and sampling techniques .................................................................................... 40

viii
 3.5 Instrument for data collection .......................................................................................... 41
3.6 Validation of instrument of data collection...................................................................... 42
3.7 Method of data analysis ..................................................................................................... 42
CHAPTER FOUR .................................................................................................................................... 44
DATA PRESENTATION AND ANALYSIS .................................................................................................. 44
4.1 Introduction ........................................................................................................................ 44
4.3 Data presentation and analysis ............................................................................................ 45
4.3(b) Presentation of field survey data relating to hypothesis two ...................................... 50
4.3(e) Presentation of field survey data relating to hypothesis one ...................................... 53
4.4 Discussion of Findings ............................................................................................................. 55
CHAPTER FIVE ...................................................................................................................................... 56
SUMMARY OF MAJOR FINDINGS, CONCLUSION AND RECOMENDATIONS ......................................... 56
5.1 Introduction……………………………………………………………………………………57
5.2 Summary of major findings .............................................................................................. 56
5.3 Conclusion .......................................................................................................................... 57
5.4 Recommendations .............................................................................................................. 58
5.5Contribution to knowledge....................................................................................................... 59
5.6Recommendation for future studies ........................................................................................ 60
REFERENCES ......................................................................................................................................... 61
APPENDIX I ........................................................................................................................................... 65

ix
 LIST OF TABLES

Table Page

4.2 Estimating cronbach’s Alpha------------------------------------------------------------------44

4.3 Techniques used by forensic Accountants have helped in curbing creative accounting--45

4.4 ANOVA Table------------------------------------------------------------------------------------49

4.5 Presentation of field survey data relating to hypothesis two--------------------------------50

4.6 ANOVA Table-------------------------------------------------------------------------------------52

4.7 Presentation of field survey data relating to hypothesis one ----------------------------------53

4.8 ANOVA Table --------------------------------------------------------------------------------------54

x
 CHAPTER ONE

INTRODUCTION

1.1 Background to the study

Forensic accounting has its root dated as far back as the early 1800’s to Glasgow,
Scotland. In the early 1900s, the Federal Bureau of Investigation (FBI) used forensic
accountants to snare criminals such as AI Capone. Yet, forensic accounting as a
profession remained unknown relatively until the recent large number of high profile
corporate scandals, financial and economic crimes and stricter reporting and internal
control regulations increases its public awareness and value in the business world.
Forensic accounting approach was developed in the United States; it was initially used
by government agencies such as the FBI, Control Intelligence Agency (CIA) and
Internal Revenue Service (IRS) to detect fraud (Brown, M. 2008). Forensic
accounting has vastly grown since the Enron scandals blew up in public in 2000.
After the scandals, there was awareness that the conventional audit and accounting
practices are not sufficient enough (Silverstone, 2004). The consequence of the
awareness was the new bills passed in United States Congress known as “Sarbanes-
Oxley” Act 2002. The bill promulgated a new audit approach which focused on fraud
detection and established public accounting oversight board (PCAOB) to oversee
public accounting firm practice.

Forensic accounting arises from the effect and cause of fraud and technical error made
by human. Forensic accounting is quite new in Nigeria as companies have realized
that the service of a forensic accountant is needed as fraud cases have substantially
increased in number. Examples of such fraud cases are attached to the appendix of
this project work. Forensic accounting is the application of financial skills and
investigative mentality to unsettled issues, conducted within the context of the rules of
evidence (Arokiasamy & Cristal, 2009).

Bologna and Lindquistn (2000) assert that forensic accounting as a discipline

encompasses fraud knowledge, financial expertise, and a sound knowledge and
understanding of business reality and the working of the legal system. Forensic
accounting may be one of the most effective and efficient way to decrease and check
accounting fraud. Presently, forensic accounting is gaining popularity worldwide. It is

1
been taught as a major course in many educational institutions in various countries.
Great financial frauds at the beginning of this century has imposed the need for deeper
investigation of irregularities in the area of financial reporting. In many quarters,
forensic accounting is equated to financial audit but they are miles apart. Forensic
accounting is usually described as the integration of accounting and auditing skills
with investigative techniques and professional skepticism. Alan Zysman, a noted
forensic accountant since 1987, states, Forensic accounting provides an accounting
analysis that is suitable to the court which will form the basis for discussion, debate
and ultimately dispute resolution.” (Hecht & Redmond, 2012).It deals with sensitive
matters that involve complex financial matters, incomplete records, deception,
lawyers, enforcement agencies and the legal system (www.deloitte/
forensicaccountinginvestigation.htm). Amat and Gowthorpe (n.d) posit that the
potentials for creative accounting exists in six major areas: a dearth of regulation, the
timing of some genuine transactions, regulatory flexibility, the use of artificial
transactions, a scope for managerial judgment in respect of assumptions about the
future and the reclassification and presentation of financial numbers. One area of
similarity is the provision in the Statement of Auditing Standard (SAS 1) that requires
an auditor to approach his assignment with ‘professional skepticism’ which requires
auditors to adopt a questioning mind and a critical assessment of audit evidence in
assessing audit risk of fraud (Ojo, 2012).

Creative accounting is not a new phenomenon. The practices of creative accounting

started since the industrial revolution and continued up to these days, but these
practices increased since in the early 18th century. As a result of the practices of
creative accounting, several large firms failed and closed over the world.
Several terms appeared to express the effect of management on the amounts of items
included in the financial statements. Those terms are: accounting manipulation,
fraudulent reporting, income smoothing, earnings management, and creative
accounting.

The questionable issue is why and how managements may practice creative
accounting. A financial statement is a summary of all financial events that occurred in
a particular firm during an accounting period. These statements are supposed to be
prepared based on the GAAP. The GAAP determine contents, items, order, form,
2
 measurement methods, and the time of recognition. Managements of firms are
responsible for the preparation and for the contents of these statements through its
determination of the accounting methods and procedures that accountants of firms can
use to prepare these statements. Managements of some firms attempt to practice what
is called creative accounting.

Sometimes, managements may exploit the available high degree of flexibility in the
accounting standards, such as the selection among the available methods of
depreciation in determining the annual depreciation expense in order to reduce the
total amount of expenses, and therefore, increase the amount of income. The selection
among the available methods of inventory valuation sometimes appears appropriate
by some management to increase inventory, so overvalued inventory leads to higher
amount of income. The growing demand for forensic accounting is a known
characteristic of most companies in the world

1.2 Statement of the problem

In August 14 2009, the military minded analyzed and called what happened to ten
banks in Nigeria “a smoking gun at CBN” (Central Bank of Nigeria) following
adverse findings reported after investigation by joint inspectors from Central Bank of
Nigeria and Nigerian Deposit Insurance Corporation (NDIC). Among the findings
was that their balance sheet had been creatively prepared to give a false picture. To
bail out the banks and protect depositors and investors interest, the CBN had to inject
#620 billion of funds. CBN annual report 2009(p33)

The Enron Saga revealed that its officers had used creative accounting practices to
conceal about $600 million in net losses over a period of three years 1997-2000 which
led to a crisis of confidence in the stock market. WorldCom another American giant
used creative accounting to re-classify and amortize revenue expenses amounting to
$3.85 billion over a long period of the time consequently the company went for
chapter 11 bankruptcy protections. There are many corporate entities misadventures
typified by such practices of using doubtful and questionable accounting practices to
conceal huge losses, concealing extensive borrowing by keeping them off the balance
sheet and consequently overall fraudulent reporting.

3
The anti-corruption group, Transparency International has consistently ranked Nigeria
among countries most riddled with corruption. It described Nigeria as a Gangster’s
Paradise where you pay a bribe to see a key official in many an establishment. You
pay a bribe to get a job. You pay a bribe to get the passport that is yours by birthright.
If you do not give or collect bribes, you remain poor and an object of scorn despite
your several degrees and cognate experience until Providence intervenes for you” (TI,
2000). Other HDI for Nigeria include: Life expectancy 51.9 years; Education index
0.442; Multi-Dimensional Poverty Index 0.310; and Gross National Income per capita
2,069. Current statistics reveal that 1% of Nigeria’s population, enjoy the privileges of
80% of its oil wealth. Thus, 99% of the populations have barely 20% of the overall
wealth to struggle over; therefore Fraud is systemic in Nigeria with the ordinary
citizen being compelled to be a liar, a cheat or an outright thief. Fraud has stultified
growth and national development, subverted the nation’s values and norms, generated
a culture of illegality and impunity in public service, and frittered away the promise of
the nation’s future. Today, the nation faces the trauma of a State whose date with
destiny has been put on hold, for reasons that are completely self-made, and
completely avoidable.

According to Osisioma (2012) the global financial meltdown was made possible
because there was a failure on the part of gate keepers including the auditors. This has
brought the indispensable corporate accountant into disrepute and ridicule and a crisis
hour for the accountancy profession. New face of crime is mitigated by well-
articulated and professionally executed central schemes of an investigative, auditing
and accounting nature? Ofcourse this led to a development of regulatory landscape for
accountancy profession with new emphasis on forensic accounting. Accounting
procedure simply makes historic reporting or recording while auditing verifies and
validates the accuracy of such recording. The auditor by the scope of his work cannot
pontificate with any level of finality that fraud has occurred or not

4
 In Nigeria, there is a group of studies that have been devoted to providing an
understanding of the reasons for the rising spate of fraud and fraudulent activities and
their incidences (Okoye & Akamobi, 2009; Owojori & Asaolu, 2009; Izedomin &
Mgbame, 2011; Kasum, 2009). Indeed, Modugu and Anyaduba (2013) submitted that
financial irregularities have become the specialty of both private and public sector in
Nigeria as individual perpetrates fraud and corrupt practices according to the capacity
of their office. Consequently, there is a general expectation that forensic accounting
may be able to stem the tide of financial malfeasance witnessed in most sectors of the
Nigerian economy. However, there has not been adequate emphasis, especially survey
evidence on how forensic accounting can help curtail creative accounting beyond the
several general views that abound. Consequently, this present study fills this gap that
exists in the empirical investigation of the extent to which forensic accounting can
help to curb creative accounting, with specific focus on North Central Nigeria. North
central of Nigeria is used as the focus of study for this research work because of its
proximity and the nature of work of the researcher.

In the face of bourgeoning cases of fraud and malfeasance in organizations and nation
states, it becomes important to empirically examine the techniques of these
“Fraudulent reporting messiahs” so as to determine the efficacy of such techniques
and skills on their mission of providing “financial reporting real” to the world and
wiping the stigma on the accounting profession.

1.3 Objectives of the study

The main objective of this study is to examine empirical analyses of forensic

accounting techniques in curbing creative accounting.

The specific objectives of this study include:

i. To examine the techniques used by the forensic accountants with the view to
determine if they are capable of curbing creative accounting.
ii. To examine the effectiveness of the skills of the forensic accountant to determine
if these skills are capable of preventing the practice of creative accounting; and
iii. To examine if the emergence of forensic accountant has restored confidence in the
credibility of corporate firms and their report.

5
1.4 Research questions

Below are the research questions used for this research work.

i. To what extent has forensic accounting techniques helped in curbing of creative

accounting?
ii. To what extent has the skill of the forensic accountant aided in the prevention of
creative accounting?
iii. To what extent has the emergence of forensic accounting restored confidence in
the credibility of corporate firms and their report?

1.5 Statement of hypotheses

Below are the null statements of hypotheses used in this research work;

1. H0 Techniques used by forensic accountants have not helped in curbing

creative accounting.

2. H0 The skills of the forensic accountant have not aided the prevention of creative
accounting.

3. H0 The emergences of forensic accountants have not restored confidence in

credibility of corporate firms and their reports.

1.6 Significance of the study

This study will be of great significant value to many corporate organizations. It will

provide an insight in to organization by using forensic accounting techniques in

curbing creative accounting. The researcher believe that interested parties reading it

will gain an appreciation of the nature of fraud occurring in various organization, the

skill required to discover them and the best approach to curb creative accounting in

our society.

6
The beneficiaries of forensic accounting information are as follows;

1. Corporate investigator. Forensic accountant serves as intermediaries between

corporate investigators and individuals that are affected by the rumours with

the aims of engaging in meaningful discussion that would produce appropriate

evidence. Knowledge of forensic accounting will help the investigator in detail

evidence gathering that could be presented in law court.

2. Insurers. Both the insured and the insurers rely on forensic Accountant to

evaluate the integrity and the quantum of the amount involved in the claim.

This is common in cases involving the calculation of losses arising from

business losses, personal injuries claim and fidelity bonds. This is also made

easy by involving the services of forensic Accountant.

3. Criminal investigators. The information provided by Accountants and

Auditors are considered as expert witness information that can be used in court

when deciding on criminal matters like; investment scam, fraud arson, stock

market manipulations etc. The report to be presented in the court of law should

be done by forensic Accountant.

4. Litigation supporters. Lawyers working on litigation like bankruptcy supplied

by the forensic Accountants to serve as evidence of financial loss of a party or

gain another.

5. Government agents. Governments bank on the services of forensic

Accountants to ensure that companies comply with relevant regulations and

laws

6. Private investigators. They employ the services of forensic Accountant to

provide credible evidence that can be tendered in the court of law.

7
 The study will contribute to existing literature and enhance students’ and other

researchers, the theoretical and practical knowledge on the efficacy of forensic

accounting technique in curbing creative accounting.

1.7 Scope/ delimitation of the study

This research study covers the empirical analysis of forensic accounting techniques in

curbing creative accounting. As regards forensic accounting techniques, it covers such

areas as: auditing, value for money, data mining, and detection of early warning signs.

While for the skills, it covers areas as psychology of investigation, sound knowledge

of accounting, sound knowledge of criminal and civil law, sound mind of enquiry, and

creativity skill, among others. Data on these factors were collected from accounting

practitioners in the North Central States of Nigeria (Benue, Kogi, Kwara, Nasarawa,

Niger,Plateau)

1.8 Limitations of the study

This study made use of survey method to gather information from practicing and

experts of accounting in North central States of Nigeria in particular. One of the

challenges that confronted this study is the fact that these professionals are usually

busy with work, and therefore constraint with time to respond to questionnaires.

Another limitation is born out of the nature of the study, which limits the responses

that respondents can provide during survey. Using a closed-ended questionnaire

format, as intended in this study, respondents will be forced to provide certain

categories of responses, thereby limiting the range of responses provided by

respondents.

8
 CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction

This chapter deals with review of related literatures. It is broken down into three

segments respectively. Namely; Conceptual framework, theoretical and review of

empirical studies.

2.2 Conceptual frame work

The Webster's dictionary defined 'Forensic" as belonging to use in or suitable to a

court of judicature of to the public discussion or debate. While accounting is

commonly defined as "the art of recording, classifying, summarizing and interpreting

monetary transaction and event of a financial character".Izedomi (2000), defines

auditing as an Independent examination and expression of the financial statements of

an enterprise prepared by the management of that enterprise, by an appointed person,

called auditor, other is express a professional opinion whether financial statement

show a true and fair view position of the enterprise as at the end of the financial

period.

2.2.1 Forensic accounting is a rapidly growing field of accounting that describes the

engagement that results from actual or anticipated dispute or litigations. “Forensic”

means “suitable for use in a court of law”, and it is to that standard Forensic

Accountants generally work. Forensic Accounting is an investigative style of

accounting used to determine whether an individual or an organization has engaged in

any illegal financial activities.

9
The forensic accountant could be called the "Bloodhounds" of the accounting

profession, the nose -to-the – ground financial investigator who sniffs out complex

fraud plots and other fiscal Shenanigans that often go undetected by the other breads

within the accounting field (Voght, 2003).

Forensic accountants search for financial Shenanigans by using a mix of accounting

law, computer technology, ethics and criminology (Voght, 2003). Companies in

Nigeria, even" Government ministries and parastatals operate in the same global

economy and information technology environment, and as a result of the growth trend

of the banking industry especially, there is therefore the need for services of the

forensic accountant. The forensic accountant can be engaged in public practice or

retain by lawyers, banks and insurance companies, the law enforcement agency, the

court and the business community. A capable forensic accountant should, nevertheless

possess certain characteristics, these include: independence, confidence, sound

professional judgment, thoroughness, creativity and sensitive (Hills, 2004).

Gray (2008) summarised that forensic accounting professionals can be regarded as a

combination of auditors and fraud investigators, and forensic accountants are known

for utilizing special talents in auditing, finance, accounting, law and criminology to

analyse and assess evidence of fraud. In the same vein, Gramling(2012) argued that

forensic accounting can be regarded as one of the specialty fields of the accounting

science and can be defined as the extension of auditing that primarily concentrates on

well-established investigation of situations, where corporate frauds have already been

detected or corporate frauds are highly doubted. Indeed, Ozcan (2018) summarised

that Forensic accounting has successfully evolved to meet the changing needs of firms

that have suffered from corporate fraud. While Khersiat (2018) equally summarised

10
forensic accountants are primarily that charged with the responsibilities of detecting

financial fraud in financial statements, as they objectively, professionally and

appropriately conduct an in-depth examination of fraudulent activities, with the aim of

unraveling fraudulent manipulations.

According to Thomas Levanti (2011), A Forensic Accountant is indeed part

investigator, part auditor, part attorney and part accountant. A Forensic Accountant

reviews evidence, conducts analysis, interviews involved parties and draws

conclusions. A Forensic Accountant prepares each case as if it will result in litigation

in the future. Forensic Accountants are usually retained after an alleged fraud has

taken place to assess the extent of a fraud and to bring those responsible to justice.

Forensic Accountants are frequently called upon to provide expert testimony on fraud

and accounting-related matters. Forensic Accountants can also be used to set up

proactive fraud prevention programs.

Forensic Accountants can trace their roots back to America’s Prohibition days. Al

Capone, one of the most famous gangsters of the 20th century was prosecuted for tax

evasion with the use of a Forensic Accountant by the Internal Revenue Service.

Today, Forensic Accountants in their expanded role can be relied on to work on all

types of cases where having knowledge of accounting principles and investigations

has been applied to some of the biggest cases ever, including terrorism and corporate

fraud cases, especially in light of 9/11 and Enron. A Forensic Accountant possesses

the knowledge and expertise to interpret financial statements or to work under

circumstances where financial information has been destroyed or tampered with,

necessitating the recreation of information to determine if inappropriate actions have

taken place.

11
 2.2.2 Link between forensic accounting and forensic science.

Forensic accounting is concerned with the application of auditing, accounting and

analytical skills to aid legal matters. Forensic accountants who are also known as

forensic auditors provide proof or verify the evidence at the trial. Forensic science is

the use of a variety of sciences to give the answer for legal questions that are

connected with crime or civil actions.

Source: http://entrance-exam.net/difference-between-forensic-accounting-and-

forensic-science/#ixzz5rCQXRpCP

Forensic accounting is the area where data is provided by experts at trials that result from

disputes or lawsuits. Forensic Science is the field in which substantial proof is gathered for

the study of DNA (Deoxyribonucleic acid), blood spill and other evidence. This is used to

make a theory on the crime scenes, the victims and the criminals. While forensic accounting

includes areas like Financial Accounting/ Frauds, Criminology and Ethics, Fraud

Investigation, Legal Framework for Forensic Accounting, etc, Forensic science is concerned

With analyzing the criminal evidence found at the scene or on a victim. The evidence thus

gathered is reported as testimony either in court or to officials of law.

Source: http://entrance-exam.net/difference-between-forensic-accounting-and-

forensic-science/#ixzz5rCQCDvOP

12
2.2.3 Forensic science

Schafer (2008) noted that the Forensic science deal with the application of a broad

spectrum of sciences which answer questions of interest to a legal system. This may

be in relation to a crime or a civil action. Shorter Oxford English Dictionary noted

that the word forensic comes from Latin Forensis, meaning of or before the forum. In

Roman times, a criminal charge meant presenting the case before a group of public,

individuals in the forum. Both the person accused of the crime and the accuser would

give speeches based on their side of the story. The individual with the best argument

and delivery would determine the outcome of the case. This origin is the source of

the two modern usages of the word forensic- as a form of legal evidence and as a

category of public presentation (Schafer. 2008).

Hopwood, Leinerand Young (2012) define forensic science or forensics as the

application of science to legal matters. They said that one of the earliest applications

of forensic sciences dates back to the 17th century when fingerprints on loan

documents were used to prove debtors’ identities. Since that time, forensic has

become much more sophisticated, especially with the explosion of scientific

knowledge in the 20th century.

According to Hopwood, Leinerand Young (2012) Forensic science has numerous

branches, many of which are important to forensic accountant. These include the

following:

a) Forensic ballistics : These deals with firearms

b) Computer forensics : These also deals with computer technology

c) Criminalistics: Its deals with the collection, processing and analysis of crime

scene evidence;

13
2.2.4 Creative accounting: The term “creative accounting” was first used in 1968 in

the film The Produce by Mel Brooks (http://chaumurky.net/criterion/indept-

184.html). When no fraud is involved, creative accounting in its strict sense involves

the transformation of financial accounts using accounting choices, estimates and other

practices allowed by accounting regulations. Ghosh (2010) defined creative

accounting as the transformation of accounting figures from what they actually are to

what perpetrators desire by taking advantage of the existing rules and/or ignoring

some or all of such rules/guidelines. They are, therefore, accounting practices that

may or may not follow the letters of the rules of standard accounting practices but

certainly are far from the spirit of those rules. Sen and Inanga (2005) see creative

accounting as referring to accounting techniques in which financial information is

distorted by window-dressing and various manipulations. This is done to present,

theoretically, a better financial picture by either increasing or reducing profit as the

case may be, by putting forward a misleading appearance of capital size or structure

and by concealing relevant information from existing or potential investors.

Creative accounting is not a new phenomenon. The practices of creative accounting

started since the industrial revolution and continued up to these days, but these

practices increased since the starting of 1980s of the previous century. As a result of

the practices of creative accounting, several large firms failed and closed over the

world.

Several terms appeared to express the effect of management on the amounts of items

included in the financial statements. Those terms are: accounting manipulation,

fraudulent reporting, income smoothing, earnings management, and creative

accounting.

14
The accounting process consists of dealing with many matters of judgment and of

resolving conflicts between competing approaches to the presentation of the results of

financial events and transactions... this flexibility provides opportunities for

manipulation, deceit and misrepresentation. These activities - practiced by the less

scrupulous elements of the accounting profession - have come to be known as

'creative accounting.

Terry Smith reports on his experience as an investment analyst: noted ‘We felt that

much of the apparent growth in profits which had occurred in the 1980s was the result

of accounting sleight of band rather than genuine economic growth, and we set out to

expose the main techniques involved, and to give live examples of companies using

those techniques.

Kamal Naser, presenting an academic view, offers this definition: Creative accounting

is the transformation of financial accounting figures from what they actually are to

what preparers’ desire by taking advantage of the existing rules and/or ignoring some

or all of them.

According to Rosner (2003), he mentioned that accounting manipulation and

fraudulent are two similar terms that represent management intent to interfere the

measurement and disclosure of accounting transactions and items of the financial

statements, even though the accounting standards do not permit these practices.

Rosner also mentioned that earnings manipulation is a studied selection methods of

the operating, financing, and investing operations.

Moreover, he mentioned that such selection of accounting methods and policies is

permitted by accounting standards, so this selection should be disclosed to users.

15
Bolkaoui (2004), mentioned that creative accounting is the process of converting

accounting numbers from its actual value toward a desired value by management,

whereas, income smoothing is an intended smoothing of the announced number of

income by management in order to decrease the variations in income from period to

period, therefore, income appears at its normal amount.

The role of forensic accountants under contemporary conditions is very important. It

stems from the need for identifying and analyzing certain causes of fraud appearance

as well as the jobs and tasks that forensic accountants perform.

2.2.5 Fraud

According to Wells(2007), fraud is seen as street crimes involving randomness,

violent act, or very little to no advance planning, fraud requires planning,

organization, trickery and false representation. In Black’s Dictionary of Law, Garner

(2004) defined fraud as “A knowing misrepresentation of the truth or concealment of

a material fact to induce another to act to his or her detriment” while the epistemology

of the first occurrence of fraud is arguable, the historiography of the original law that

formed the basis of fraud legislation in Nigeria and elsewhere in the United State was

the statute of frauds law enacted in England I n 1977 (Charles II, 1819). This law

sought to prevent fraud and perjuries (Garner, 2004).

The founder of the Association of Certified Fraud Examiners and former FBI

investigators explained that fraud is a social phenomenon (Wells, 2004). In the larger

context of criminology, crime and delinquency were understood as social phenomena

(Sutherland, Cressy, &Luckenbill, 1992; AbdulRahman, 2011). By itself, crime is

considered a complicated phenomenon (Lilly, Cullen, & Ball, 2002). Bases on

16
 research studies on the typology of fraud, several categories emerged. Albrecht and

Albrecht, (2004) noted One typology characterized fraud as

i) Embezzlement

ii) Management fraud

iii) Investment fraud

iv) Vendor fraud and

v) Customer fraud

Another notable typology involving white-collar crime contained three broad

categories:

i) Theft crimes

ii) Public crimes

iii) Regulatory crimes

According to Keshi (2011), economic and financial crimes that are common in Nigeria

include illegal bunkering, terrorism, embezzlement, racketeering, others include official

corruption, arson, extortion and blackmail, bribery, murder, assassinations, 419, illegal

arms trafficking, tax evasion, insider trading and market manipulation (stock markets),

smuggling and export control violations, trafficking in human beings, smuggling of

migrants (eg Women & Children) counterfeiting (currency, product, intellectual property,

piracy e.t.c), round tripping of foreign exchange and conspirators who facilitate money

laundry. In addition to what Keshi provided, others are procurement fraud and inflated

contract price (Jugu, 2007). A deliberate and purposeful war against corruption and other

related offences began with the enactment of the ICPC Act of 2000, followed by the

EFCC Act of 2004 in Nigeria. Unfortunately, the impact of these Acts and their

commissions are not well felt by Nigerians.

17
2.3 Theoretical framework

Theories build one upon another as new facts emerge from studies prompted by the

reigning theories. In criminology (as in virtually all the social science) theories

competes one with another for acceptance. Chukwuemeka (2003) contends that the

test of a theory is the degree to which its formulation seems congruent with our own

perception of real world situation. Theories therefore equip us with a way of looking

at reality. However, there have been a number of the theorists who have attempted to

explain this. The basic theory that has been established in this research work is

“White collar crime theory by Sutherland (1949) as cited in Michael (2004).

To build upon prior research and establish a conceptual framework, the investigators

of this study also focused on relevant theories related to expected criminal behavior

and how to manage it, they are as follow:

1. Theory of the Fraud Diamond

2. Differential Association Theory of Crime

3. Fraud Management Theory

2.3.1 Theory of the fraud diamond

Wolf and Hermanson (2004) proffer the Theory of the Fraud Diamond, in place of the

triangle. They argue that the diamond offers a better view of the factors leading to

fraud. They add a fourth variables, capacity, to the three-factor theory of Cressey.

Capabilities mean that, the fraud perpetrator must have the necessary traits, abilities,

or positional authority to pull off his crime.

18
 Figure 2.1The Fraud Diamond

Source: Wolf and Hermanson (2004)

Theory of fraud Diamond offers a better view of the factors to fraud. The theory

adds fourth variable, capabilities, to the three factor theory of fraud triangle. Wolf

and Hermanson believed many frauds would not have occurred without the right

person with the right capabilities implementing the details of the fraud. They also

suggested four observation traits for committing fraud; First, authoritative position

or function within the organization, Second capacity to understand and exploit

accounting systems and internal control weakness, Third, confidence that he/she

will not be detected or if caught he/she will get out of it easily, Fourth, capability

to deal with the stress created within and otherwise good person when he or she

commits bad acts.

2.3.2 Differential association theory of crime

Sutherland (1983:7) defined white collar crime as "a crime committed by a person of

respectability and high social status in the course of his occupation." The definition

has its problems. The concept of "respectability" defies precision of use. The

requirement that a crime cannot be a white collar crime unless perpetrated by a person

of "high social status" is an unfortunate mixing of definition and explanation,

especially when Sutherland used the widespread nature of white collar crime to refute

class-based theories of criminality. These deficiencies have rendered white collar

19
crime an impotent construct for theory building in sociology. No influential theory of

white collar crime has developed, let alone an attempt to links such work to wider

sociological theory.

Sutherland's theory of differential association in White Collar Crime was a general

theory of all crime, one whose generality borders on a platitudinous restatement of

social learning theory (CF Mathews 1983; Albanese 1984).

The term white-collar crime dates back to 1939. Sutherland (1949) as cited in Michael

(2004) was the first to coin the term, and hypothesis white-collar criminals, attributed

different characteristics and motives than typical street criminals. Sutherland

originally presented his theory in an address to the American Sociological Society in

attempt to study two field, crime and high society which had no previous empirical

correlation. He defined his idea as “crime committed by a person respectability and

high social status in the course of his occupation (Sutherland 1949, cited in Michael

2004). Sutherland noted that in his time, less than two (2) percent of the persons

committed to prison in a year belong to the upper class.” His goal was to prove a

relation between money, social status, and likelihood of going to jail for a white-collar

crime, compared to more visible, typical crimes, although, the percentage is a bit

higher today.

Much of Sutherlands work was to separate and define the difference in blue collar

street crimes, such as arson, burglary, theft, assault, rape and vandalism which are

often blamed on psychological, associational and structural factors. Instead, white-

collar criminals are opportunists, who over time learn they can take advantage of their

circumstances to accumulated financial gain. They are educated, intelligent, affluent,

individuals who are qualified enough to get a job which allows them the unmonitored

access to often large sum of money

20
 But the federal Bureau of Investigation (FBI) has adopted a narrow approach defining

white-collar crime as those illegal acts which are characterized by deceit,

concealment, or violation of trust and which are not dependent upon the application or

threat of physical force or violence.

The blue collar crime will more often use physical force, whereas, in the corporate

world, the identification of a victim is less obvious and the issuer of reporting is

complicated by a culture of commercial confidentially. Fredrichs (2007), stated that

the only way one crime differs from another is in the backgrounds and characteristics

of its perpetrators. Most, if not all white-collar offenders are distinguished by lives of

privilege, much of it with origins in class inequality. It is estimated that a great deal of

white-collar crimes is undetected or if detected, it is not reported. Because of the high

status of the perpetrators of these crimes, a highly trained and experienced examiner

or investigator like the Professional Forensic Accountant is needed to forestall the

occurrence of such high profile fraud.

2.3.3 Fraud management theory

Fraud Management Theory has to do with the effective Lifecycle of fraud. The

advocates of this theory explained it in stages of cycle in order to create an awareness

and understanding to all fraud management professionals (forensic accountants).

Webster’s Dictionary refers to a lifecycle as “a series of stages in form and functional

activity through which an organism passes between successive recurrences of a

specified primary stage” (1997, 1976, &1941). Webster’s refers to a FMT as “an

interconnected or interrelated chain, group or system. He describes fraud management

lifecycle as a combination of these two definitions: Network lifecycle (Wilhelm,

2004). Unlike a sequentially, where activities in one stage are completed and then the

21
 functioning passed on to the next stage in the chain. To the contrary, a network

lifecycle facilitates simultaneous and sequential actions within each of the lifecycle

stages or network nodes. The fraud management lifecycle theory is made up of eight

stages.

2.4 Forensic accounting and the role of forensic accountants in detecting frauds in
financial statements:

Great financial frauds at the end of the past and the beginning of this century have

imposed the need for deeper investigation of irregularities in the area of financial

reporting in connection to that, control institutions, legislature and profession have as

the primary objective the creation of assumptions that frauds through financial

reporting should be prevented to a great extent and if they emerge they should be

detected before things come out of proportion. As a result of the effort in the area of

normative-legislature activities, for example, in the US in 2002 the famous Sarbanes-

Oxley Law was passed the purpose of which was to enlarge the reliability and

correctness of financial information and in turn reduce the possibility of the creation

of financial frauds. The EU, in that sense, has taken similar steps, primarily in the

direction of important changes in the Eight Directive and the like. However, within

profession, in the time after Enron, as the time after the great financial scandals is

called, it has led to the forming of new regulative bodies and the appearance of a new

profession-forensic accounting investigator, forensic accountant. The application of

the accounting concepts, principles and procedures in solving legal problems, is often

defined as forensic accounting.

In the accounting literature there is no unified definition of forensic accounting. From

numerous definitions that can be found in the literature that deals with forensic i.e.,

22
investigative accounting, the complete one was that by the Association of Certified

Fraud Examiners (ACFE). According to the Association, forensic accounting is the

use of skills in potential or real civil or criminal disputes, including generally accepted

accounting and auditing principles; establishing losses of profit, income, property or

damage, estimations of internal controls, frauds and other that involves inclusion of

accounting expertise into the legal system (11, www.forensicaccounting.com).

In other words, Forensic accounting or otherwise called investigative accounting

involves the application of accounting concepts and auditing techniques in solving

legal problems. Hence, according to many, the key components of forensic accounting

are accounting skills, auditing techniques and investigative procedures.

In accord with the described essence of forensic accounting, forensic accountants,

basically, investigate and document financial frauds. Also, they help lawyers, courts,

regulative bodies and other institutions in investigations of financial frauds. It goes

without saying that in order to perform efficiently tasks and activities that have been

assigned to them, forensic accountants must possess solid knowledge and skills in

accounting and auditing. Additionally, they should possess developed capabilities of

verbal and written communication, capability of perceiving details, capability of

efficient application of investigative techniques, experience in investigations as well

as independence and high degree of knowledge about the use of information

technology in the accounting and auditing procedures. A high degree of independence

and objectivity is expected of forensic accountants, in accordance with the ethical

code for professional accountants. Independence has an equal importance for a

forensic accountant as well as for an auditor. A forensic accountant will be considered

23
independent if they are intellectually honest, ready to make impartial decisions and

have no interests or obligations in relation to the client, management or the owner.

Independence is usually considered the prerequisite for objectivity. It is insisted on

objectivity when it comes to the proofs that support the claims of the management and

belong to the area that make greater subjectivity possible (e.g., with the estimate of

future losses). It is estimated that in the following years, in developed market

economies, a forensic accounting investigator will be one of the 20 most wanted

professions.

According to Osisioma (2012) Forensic accounting clearly demands a change in

scope, method and operational style for accountants. In financial audits, accountants

are alert to signs or evidence of errors and irregularities of a material nature. Small

errors are of less concern to financial auditors. Forensic accountants are very much

concerned about small errors and irregularities, particularly if they seem to be related

to the modus operandi of corrupt employees and fraudsters. Criminals usually cannot

bury all their tracks; small errors and irregularities may therefore be the tip of a

fraudulent iceberg.

Thus, the forensic auditor must look out for evidence of control procedure exceptions,

accounting classification anomalies, oddities in financial trends.

24
2.5 Drivers of creative accounting

Mulford and Comiskey (2002) posited that managers play the numbers game in

exchange for a variety of expected rewards. The rewards may be any of the following:

lower corporate borrowing costs as a result of an improved credit rating, favourable

effect on share prices, political gains, and/or incentive compensation plans involving

stock option or profit-sharing for top management and key employees which are tied

to income measurement. Amat and Gowthorpe (2004) reported that the existence of

tax levies based on income is one of the factors motivating creative accounting.

Secondly he noted that where management is able to report stable earnings obtain the

confidence of shareholders and employees another is the incidence of ‘big bath’

accounting whereby an organization that is currently making a bad loss decides to

maximize the reported loss in that year so that results of future years will look better.

Other motivations include the positive effects which income smoothing has on

securities valuation and the reduction of risk for financial analysts; where

management observes a gap between analysts’ expectation and the actual performance

of the company and when major capital market transactions are being expected.

Another motivation is the need to create an appearance of a good profit trend so that

the company can be able to raise capital through the issue of new shares, or resist

takeover bids, or offer its own shares in takeover bids. A study by Amat and

Gowthorpe (2004) in Spain between 1999 and 2001 suggests that the direction of

creative accounting (i.e. whether Reported earnings >< Adjusted earnings) could be

related to the general economic conditions prevailing in the country.

25
Ghosh (2010) suggests that in detecting and preventing creative accounting, the

following concepts must be considered: Nonrecurring accounting shenanigans (e.g.

“nonrecurring items”), Pro Forma earnings, spot the habitual users of nonrecurring

items, divide the figures by sales and obtain percentages to see trend, and use

Nonrecurring expense ratios. The emphasis on nonrecurring expenses here is because

the more expenses that can be defined as nonrecurring, the higher the reported

earnings. Ghosh further observed that firms that are known for fraudulent financial

reporting trend are characterized by weak internal control or a family relationship

among directors and officers and a board of directors dominated by individuals with

significant equity ownership and inadequate experience and no audit committee.

2.6 Recent cases of fraud treated by forensic accountant

The following is a list of cases of real life occupational fraud and scandals committed

in Nigeria in recent times as reported by the media unit of Economic and Financial

Crimes Commission (EFCC).

Nigeria probes funds embezzlement; Abuja - The Nigeria Senate is investigating the

controversy surrounding the sale of its foreign mission properties in the United States

26
amid allegations that US$27 million was embezzled in the process. The probe follows

a petition made by Daniel Elombah, on behalf of a non-governmental organization

that alleged Dr George Obiozor, who was the Nigerian Ambassador to the United

States at the time the properties were sold, misappropriated the proceeds.

Obiozor, Foreign Affairs Minister Professor GbengaAshiru and Current Ambassador

to the United States, Ade Adefuye, have appeared before the Committee on Foreign

Affairs in connection with the sale of the properties between 2004 and 2007.

Chairman of the Committee, Senator Matthew Nwagwu, said it was alleged that the

resources were squandered by embassy officials. “We will give them a chance to

address the committee, to tell us what they know about the administration and

management of the fund within their tenure from 2004 till date.

The EFCC anti-graft agency has instituted a trial against four officials of the Bayelsa

state government. The accused persons who are facing trial before a judge at a Federal

High Court, Abuja are; the Bayelsa State Commissioner of Finance, the State

Accountant General, the State Director of Treasury, and the Director of Finance over

the N2billion Naira Bayelsa Fund. They were earlier arraigned by the EFCCC on 23th

2010.

According to Oboh (2012), the audit done for ministry of finance by renowned audit

and advisory consultant KPMG, exposed the massive corruption in the NNPC

between2007 and 2009. The cooperation, the report says has also severally defrauded

the country subsidy claims. Auditors found that between 2007 and 2009 alone, the

NNPC over-deducted funds in subsidy claims to the tune of N28.5 billion. It has not

been able to account for the sum ever since. The ever deducted from its remittance to

the federation account for 2010 and 2011, believed to be in several billion of naira is

not captured in the report. The NNPC succeeded in cheating the three level of

27
 government of a whooping N85.2 billion in three years, N25.7 billion in 2007, N38.8

billion in 2008 and N26.7 billion in 2009. When the auditors requested explanations

for these exchange rate disparities the NNPC claimed it obtained the exchange rates it

used from the Central Bank of Nigeria through Telephone. The report also revealed

that NNPC over the shoddy and non-transparent manner it renew crude sale contracts

every year. It is also stated that Evaluation criteria for renewal of contracts are not

clearly stated in the contract documents and that the selection exercises were based on

individual discretion and wrong assumption and criteria “The NNPC claims that

renewal of contracts was based on performance off takers (buyers) but the auditors

observed that the basis and process for determining performance were not clearly

defined.

2.7 Empirical studies

This section is devoted to reviewing existing empirical studies on forensic accounting

and its influence on fraud related practices. The link between the use of Beneish M-

Score in the analysis of the financial statements of firms and the discovery of financial

fraud is also reviewed.

The relevance of Beneish M- score to creative accounting is that, Beneish M- score is

a statistical model use in measuring fraud and earning managements.

Beneish M-Score is a method that can be used to detect companies with a tendency to

commit fraud on their financial statements (Beneish, 2012). Empirically, companies

with higher M-Score have higher tendency to commit fraud. Beneish M-Score is a

probabilistic model, so that one of the limitations is that the ability to detect fraud is

not with 100% accuracy. it shows indications of financial fraud within companies.

28
Okoye and Gbegi (2013) examined the relevance of forensic accounting in fraud

detection and prevention in the public sector, with particular reference to Kogi State.

Both primary and secondary sources of data were appropriately used. 370

questionnaires were administered to staff of five (5) selected ministries in Kogi State

of Nigeria, along with interviews conducted with those ministries out of which 350

were filled and returned. By employing Analysis Of Variance (ANOVA) for the

purpose of data analysis, findings from the study revealed that the use of Forensic

Accounting do significantly reduce the occurrence of fraud cases in the public sector,

and that there is significance difference between Professional Forensic Accountants

and Traditional External Auditors and therefore the use of Forensic Accountants can

help better in detecting and preventing fraud cases in the public sector organizations.

Plausible as the findings of this study appear, the authors failed to capture the actual

impact of Forensic accounting in reducing Fraud in the state. The present study hopes

to fill in the gap by using regression analysis to determine the impact of Forensic

accounting on Fraud detection.

Joseph, Okike, and Yoko (2016) investigated the extent to which forensic accounting

contribute to the detection of fraud in Nigeria. By employing survey research, which

involves the collection of primary data with the aid of questionnaire administered to

92 sampled professional accountants in Nigerian public sector, and by analyzing data

gathered via the statistical method of chi-square, findings from the study suggest that

forensic accounting have a significant role to play in fraud detection and prevention in

Nigeria. However, this study suffers from the use of non-parametric statistical

technique, whose results cannot be meaningfully generalized.

29
Amake and Ikhatua (2016) examined the significant difference between forensic

accounting and the fraud detection in Edo state of Nigeria. By surveying the opinions

of 100 auditors and accountants in 4 ministries of the state, and employing ANOVA

to decompose the variations arising from the responses gathered, findings from the

study revealed the relevance of forensic accounting in the detection of fraud in the

public services.

The study by Simeunovic, Grubor and Ristic (2016) proposed the use of a real case

digital forensic analysis in organizational fraud auditing process using Tableau TD3

Touch Screen Forensic Imager and Access Data FTK Imager. The authors argued that

the success of digital forensic auditing lies in the ability of an organization to

effectively combine auditing, computer crime and digital forensic investigation skills,

which can be achieved through joint efforts and cooperation of both digital

investigator and fraud auditor.

Beneish (1999) developed the Beneish M-Score measure and use same to analyze the

financial statements data of 64 fraud firms and 2332 non-fraud firms by using the

probit regression method. The results of the empirical analysis show that firms that

committed financial statement fraud have low asset quality and gross margin ratio and

are highly leveraged. The author found that there is a systematic association between

the likelihood of financial statement fraud and accounting variables. He concluded

that the established model is very useful in the detection of financial statement frauds.

Franceschetti and Koschtial (2013) employed Beneish Model to uncover financial

statement frauds. Based on a sample of thirty bankrupt and thirty non-bankrupt firms,

they found that sales growth index, gross margin index, asset quality index, days'
30
sales in receivable index and total accruals to total assets contribute to the detection of

financial statement fraud committed by bankrupt firms. Curtis and Thalassinos (2005)

utilize Beneish Model to examine the financial statements of firms listed on Athens

Stock Exchange. They posit that Beneish Model yields more accurate results when

return on equity and Altman’s Z score accompany Beneish Model.

Groove and Cook (2004) test the usefulness of Beneish Model in detecting financial

statement frauds. In their study, Beneish Model is used in the high-profile fraud cases

such as Qwest, Enron, Global Crossing and WorldCom. They found that the ratios of

Beneish Model worked well in the detection of financial statement frauds that

occurred in Qwest, Enron, Global Crossing and WorldCom. Additionally, they state

that forensic accountants should use Beneish Model together with traditional vertical,

horizontal and ratio analysis in order to effectively detect financial statement frauds.

Dechow (2011) analyse the major characteristics of 676 firms that committed

financial statement fraud by extending Beneish Model. They claim that abnormal

growth in receivables and revenues can signal financial statement fraud and the firm’s

financial and nonfinancial performance indicators get worse during the period when

the firm manipulates financial statements. Repousis (2016) empirically investigated

the effectiveness of Beneish Model in detecting financial statement fraud by using a

sample that includes 25,468 firms operating in Greece. The empirical results showed

that sales growth index, depreciation index, gross margin index, asset quality index,

total accruals to total assets, days’ sales in receivables index, leverage index, sales,

general and administrative expenses index are statistically significant. Additionally,

the results of this study prove that Beneish Model enables forensic accountants to

comprehensively analyze the alleged financial statement fraud. Er and Varıcı(2013)

31
use Beneish model to identify fraudulent financial statements disclosed by the firms

listed on Borsa İstanbul. The data analyzed in this study is collected from thirty-nine

manufacturing firms’ financial statements published in 2010. They employed a

logistic regression model to discriminate between manipulator firms and non-

manipulator firms and found that days' sales in receivable index, depreciation index,

asset quality index, and total accruals to total assets play more prominent role than

other ratios in the detection of financial statement frauds.

Orellana and Marino (2017) apply Beneish Model to a Spanish food firm that went

bankrupt in 2013. The period analyzed in the study is of four years. They conclude

that Pescanova manipulated the days' sales in receivable index (DSRI) and total

accruals to total assets (TATA) before its bankruptcy. They claim that the empirical

results strongly demonstrate the validity of Beneish Model for Pescanova case.

KüçüksözenveKüçükkocaoğlu(2004) use Beneish Model to uncover fraudulent

financial statements prepared by firms listed on Borsa İstanbul between the time

period of 1992-2002. They concluded that four of Beneish ratios, days' sales in

receivable index, depreciation index, asset quality index and gross margin index, can

help in discriminating between manipulator and non-manipulator firms.

Aghghaleh (2016) investigate whether Beneish Model has any relations with the

detection of financial statements frauds committed by firms operating in Malaysia.

They found that Beneish Model is effective in detecting fraud firms with an accuracy

rate of 73%. Spathis (2002) created a model that effectively detects fraudulent

financial reporting. He stated that a low stock turnover ratio, low return on assets and

low Z-score increase the likelihood of financial statement fraud. He claimed that

analysis of financial statements is an important tool for detecting accounting fraud

32
using a sample that consists of seventy-six firms operating in Greece. Skousen (2009)

investigated the validity of fraud triangle theory in detecting financial statement fraud.

By using financial statements of 86 fraud firms, they conclude that rapid asset growth,

liquidity problems and debt financing increase the probability of financial statement

fraud.

Tahmina and Naima (2016) analyze the accounting data of 102 firms operating in

Bangladesh between the years of 2010 and 2013 by using Beneish Model. They state

that days' sales in receivable index (DSRI), asset quality index (AQI) and total

accruals to total assets (TATA) differ significantly between manipulator firms and

non-manipulator firms. They also found that overstating intangible assets, artificially

inflating earnings and capitalizing expenditures can signal financial statement frauds.

Ozcan (2018) examine the usefulness of the Beneish Model in the forensic accounting

practices. Logistic regression analysis was used to examine the empirical variables

adopted in the study. Based on a sample that includes 174 firms from 2005 to 2017,

the study concluded that Beneish Model aids effectively in the analyses of

quantitative characteristics of falsified financial statements.

This Khersiat (2018) examined the relevance of forensic accountants in detect the

manipulation of financial statements and combating tax fraud, by identifying the tax

fraud-detecting means used by the forensic accountants in Jordan. The author

prepared a questionnaire which was distributed among 125 forensic accountants

working in Jordanian accounting and auditing firms. After analyzing and testing the

hypotheses using SPSS, the following outcomes were drawn: The forensic accountant

has the qualifications, expertise and skills to detect tax fraud in financial statements as

well as detect the manipulation of financial statements figures.

33
The study by Suleiman, Yahaya and Abba (2018) examine the effect of forensic

accounting knowledge on fraud prevention among listed companies in Nigeria.

Questionnaires were administered to 177 Auditors of the listed companies out of

which 105 auditors responded. The paper also used the multiple regression model to

test the hypotheses formulated. The study reveals that forensic accounting knowledge

and complexity are significantly related with fraud prevention. It recommended that

auditing staff of listed companies should have more forensic accounting knowledge so

as to serve as a tool to deter and prevent fraudulent activities in companies and

Nigeria at large.

34
2.8 Reasons for creative accounting

Before itemizing reasons why companies actually manipulate their accounts, there is

the need to highlight the basic idea of creative accounting. According to Remenaric,

Mijoc, and Kenfelja (2018), creative accounting is based on finding the so-called

loopholes in laws and accounting standards with the intention of enhancing financial

statements and presenting the business in a positive light. Creative accounting can

have a positive impact on business, but only when it is applied in a positive sense and

in a minimal scope. However, it often happens that companies cross boundaries of

minimalism and abuse such practice, which can lead to fatal consequences. One thing

is certain, creative accounting most often has a negative effect on financial reporting.

In most cases, company management is responsible for the manipulation of financial

reporting, as their instructions are followed by the employees responsible for financial

reporting. The main motives for applying creative accounting are:

a. obtaining personal gain;

b. competition;

c. attracting investors;

d. increasing or maintaining the level of capital;

e. buying time for not settling debts;

f. beating analysts’ forecasts about future company performance.

35
Other reasons include:

(1) Changes in accounting method - Company directors may keep an income

boosting accounting policy change in hand to distract attention from

unwelcome news.

(2) Income smoothing - Companies generally prefer to report a steady trend of

growth in profit rather than to show volatile profits with a series of dramatic

rises and falls. This is achieved by making unnecessarily high provisions for

liabilities and against asset values in good years so that these provisions can be

reduced, thereby improving reported profits, in bad years. Advocates of this

approach argue that it is a measure against the =short-termism ‘of judging an

investment on the basis of the yields achieved in the immediate following

years. It also avoids raising expectations so high in good years that the

company is unable to deliver what is required subsequently.

(3) Boosting the market value of shares - Creative accounting may help

maintain or boost the share price both by reducing the apparent levels of

borrowing, so making the company appear subject to less risk, and by creating

the appearance of a good profit trend. This helps the company to raise capital

from new share issues, offer the own shares in takeover bids, and resist

takeover by other companies.

(4) Matching reported earning to profit forecast - A variant on income

smoothing is to manipulate profit to tie in to forecasts.

36
(5) Delaying market information - If the directors of a company engage in

insider dealing ‘in their company‘s shares they can use creative accounting to

delay the release of information for the market, thereby enhancing their

opportunity to benefit from inside knowledge.

The real causes of creative accounting lie in the conflicts of interest among

different interest groups. Managing shareholders’ interest is to pay less tax and

dividends. Investor-shareholders are interested to get more dividends and

capital gains. Country‘s tax authorities would like to collect more and more

taxes. Employees are interested to get better salary and higher profit share. But

creative accounting puts one group or two to advantageous position at the

expense of others. One day some researchers had an opportunity to have a

discussion with the Chief Accountant of an enterprise in this regard. The Chief

Accountant told, in the course of conversation, that he was determined to

retain profit for the expansion of his existing unit and establishment of new

ones. Quite naturally, his interest was to pay less tax and less dividend and,

accordingly, to create ‘financial statements.

37
 2.9 Summary of review

Having reviewed previous works on forensic accounting, it is discovered that a

lot have been discussed on the issue. Review of related literature stated that

creative accounting is more likely to occur when someone/ firm has pressure,

weak control, and oversight by management provide opportunity for the

person to commit fraud or apply creative method and the firm management

realize the fraudulent behavior. It is discovered that the majority of high level

fraud/ creative accounting in the public sector are prepared by management

which supposed to be the custodian of internal control. Though previous

researcher according to the reviewed literature made substantial effort to solve

the problem of creative accounting in our environment.

There are groups of studies that have been devoted to providing an understanding of
the reasons for the rising spate of fraud and fraudulent activities and their incidences
(Okoye&Akamobi, 2009; Owojori&Asaolu, 2009; Izedomin&Mgbame, 2011;
Kasum, 2009)., and there others that have equally demonstrated the relevance of
forensic accounting in curbing creative accounting in some part of Southwest and
some part of North-central part of Nigeria (Okoye&Gbegi, 2013;Okike, & Yoko,
2016; Amake&Ikhatua, 2016). However, on aggregate terms, and with particular
reference to the generality of the North-central zone, little is known on not only the
relevance of forensic accounting in curbing creative accounting; but also on the extent
to which the skills possessed by forensic accountant have helped or capable of
curbing corruption in within the study area in particular, and the nation in general; and
finally on the extent to which the application of forensic accounting practices by
corporate firms have helped to enhance the credibility of their business reputation and
that of their financial statements. These areas mentioned invariably shows the
knowledge gap which the researcher intends to fill.

38
 CHAPTER THREE

METHODOLOGY

3.1 Introduction

A decision is a judgment. It is a choice between alternatives. It is rarely a choice between

right and wrong. The right decision grows out of the clash and conflict of divergent opinions

and out of the serious consideration of competing alternatives (Osisioma,2004). Research is

the process of arriving at dependable solutions to problems through the planned and

systematic collection, analysis and interpretation of data is research.

Research having addressed a particular problem, contributes to the body of knowledge. In

line with the above, Baridam (2001) defines research operationally as: The activity of

investigating the phenomenon of human experience which leads to new knowledge, using

methods of inquiry which are currently accepted as adequate by scholars in the field.

Generally, in carrying out any meaningful investigation, the right starting point will be to

gather relevant data concerning the problem.

This chapter focuses on the method of inquiry adopted in this study. The methodology is

presented under the following headings:

(i) Research design

(ii) Population and sampling procedure

(iii) Sample size and sampling techniques

(iv) Sources of data

(v) Instrument for data collection

39
(vi)Validation of instrument of data collection

(vii) Method of data analysis

3.2 Research design

The research design adopted for this study is a survey method. The reason for this is
that it involves investigation of opinion of large number of people and it involves
inferences drawn from such investigation. This survey is expected to provide full
understanding of the empirical analysis of forensic accounting techniques in curbing
creative accounting.

3.3 Population of the study

The population comprised of practicing professional Accountants (Chartered

Accountants). We have about 43,293 total populations of chartered Accountants in
Nigeria according to ICAN annual report 31st December, 2018.

3.4 Sample size and sampling techniques

The sampling technique employed for this study was simple random sampling. The
researcher used simple random sampling techniques in conducting the study. A simple
random sampling technique was used in selecting respondents from the list of
members in each of the selected firm.

The sample size was arrived at using scientific sample method proposed by Walpole
(1974), - as in Osisioma (2004) as

! ! " (%&")
n= (!

Where:
n = Sample Size
Z= Z-value (e.g., 1.96 for a 95 percent confidence level)
P= Percentage of population picking a choice, taken to be 0.05

40
e= Margin of error, taken to be 0.05

A Z-value (Cumulative Normal Probability Table) represents the probability that a sample
will fall within a certain distribution.

The Z-values for confidence levels are:

1.645 = 90 percent confidence level
1.96 = 95 percent confidence level
2.58 = 99 percent confidence level

Thus,

(%.*+)! × -.. × (%&-..)

n= (-.-.)!

/.01%+× -.. × -..

n= -.--2.

-.*+-1
n = -.--2.

n = 384

3.5 Instrument for data collection

The research instrument used for data collection was questionnaire, which was
adapted from previous studies. It is made up of two sections. Sections A consist of
information on personnel data, qualifications and cognate working experience.
Section B is geared towards gathering the respondents’ opinions on items bordering
on empirical analysis of forensic accounting techniques in curbing creative
accounting. The responses of the subjects to the questionnaire items were structured
according to the 5-point likert summated type as follows:

Strongly Agreed (SA), - 5points

Agreed (A), - 4 points

41
 Undecided (UND), - 3 points
Disagreed (DA), - 2 points
Strongly Disagreed (SD), - 1point

3.6 Validation of instrument of data collection

A pre-test was used to ascertain the validity of the research instrument. Specifically,
the pre-test was to help researcher clarify questions and clear ambiguities that may
arise in completing the questionnaires. However, reliability of the instrument was
ascertained using the Cronbach’s Alpha test of internal consistency.

3.7 Reliability of the instrument.

A pretest was used to ascertain the reliability of the research instrument and the value
obtained was 0.90.

3.8 Method of data analysis

Data collected through questionnaires were analyzed using Analysis of variance

(ANOVA) for validation of hypotheses. According to Nwachukwu and Egbulonu,
(2000), ANOVA is a statistical method for determining the existence of differences
among several population means. While the aim of ANOVA is to detect differences
among several means, the technique requires the analysis of different forms of
variances associated with the random samples. In this study, ANOVA was employed
in order to determine whether there is a significant difference between those who
agreed that Forensic accounting has helped to curb creative accounting and those who
disagreed.

ANOVA were made used of, according to responses to research questions from
different respondents.

42
Decision rule

Rejection Region at ᾳ Level of Significance

Acceptance Region

The null hypotheses is rejected (and the alternative accepted) if our calculated F value
is greater than the value found from the table. Otherwise, the null hypothesis is
accepted. Egbulonu, (2007).

43
 CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

4.1 Introduction

This section deals with data presentation and analysis. Data collected through field survey were
analyzed using mean, standard deviation and ONE-WAY ANOVA.

4.2 Reliability Test Result

A measure of the extent to which the questions raised in the questionnaires would elicit the

same responses and produce reliable and consistent results when recast and re-administered

to the same respondents was investigated using the Cronbach Alpha measure. Variables

derived from test instruments are declared to be reliable only when they provide stable and

reliable responses over a repeated administration of the test. The higher the alpha value, the

more reliable the generated scale is. Nunnaly (1978) has indicated 0.7 to be an acceptable

reliability coefficient but lower thresholds are sometimes used in the literature.

Table 4.2(a) Estimating Cronbach’s Alpha

Cronbach's Cronbach's No of
Alpha Alpha Based Items
on
Standardized
Items

.979 .982 5

Source: Computed with the aid of SPSS 23

From table 3.2 above, the Cronbach’s alpha value of 0.979 indicates a high level of internal

consistency with the scale used to measure the techniques and skills of forensic accountants

for curbing creative accounting.

44
4.3 Data presentation and analysis
Out of the 768 questionnaires distributed 65 were not returned, 15 were not usable thereby

constituting the invalid questionnaires to 80. While 688 questionnaires were returned and

valid.. Total number of valid questionnaires therefore is 688. The items in the questionnaire

were examined on the basis of respondents’ opinion. Respondents’ perception on the various

role of forensic accountant in curbing forensic accounting were assessed using a Likert scale

of five points, which ranges from strongly agreed responses to strongly disagreed in a

descending order. The table shows estimates of group means for each item and the

corresponding standard deviation. Group mean values that fall within 3.50-5.00 indicate

consensus among respondents on the item, those that fall within 2.50-3.49 indicate

respondents’ indecision on the item requiring more information, while those within 1.00-2.49

show disagreement among majority of respondents.

The data Collected from the questionnaire distributed are hereby presented below:

4.3 Presentation of field survey data relating to hypothesis one

Table 4.3 Techniques used by forensic accountants have helped in curbing creative
accounting

S/N ITEMS SA A UND DA SD Mean STD

1 CRITICAL POINT
AUDITING
a. Filtering out the symptoms 3.0 1.6
of fraud from regular and
normal transactions in 138 186 76 82 206
which they are mixed or
concealed.
b. Make trend analysis by 3.1 1.4
tabulating significant 137 172 103 172 104
financial transactions.
c. Ascertaining unusual debit 3.5 1.4
/ credits in accounts
241 172 34 172 69
normally closing to credit/
debit balances
d. Ascertaining false credits 3.5 1.4
213 193 69 131 82
to boost sales with

45
 corresponding debits to
non-existent during
personal accounts.
e. Filtering discrepancies in 3.5 1.4
debtors / creditors / stock
balances as evidenced
from the non-
241 172 34 172 69
reconciliation between
financial records and
corresponding subsidiary
records.
f. Analyze books with a view 3.1 1.4
to ascertaining
accumulation of debit 138 172 103 172 103
balances in loosely
controlled account.
g. Analyze cross debits and 3.7 1.3
credits and inter-account 241 206 34 172 35
transfers
h. Ascertaining weaknesses 3.6 1.9
and inadequacies in
241 172 69 138 68
internal central / check
system.
2 PROPRIETY AUDIT
a. Make a compliance test to 3.5 1.4
ascertain if all
expenditures sanctioned 213 193 69 131 82
and incurred are need
based
b. Ensure that all due 3.5 1.4
revenues have been
realized in time and 241 172 34 172 69
entered in the necessary
account.
3 VALUE FOR MONEY
TECHNIQUES
a. Report if the goal of 3.1 1.4
economy, efficiency and
effectiveness have been
achieved in the
138 172 103 172 103
transactions for which
expenditures have been
incurred or revenue
collected.
4 RELATIVE SIZE
FACTOR
a. This states that each field 3.7 1.3
in any transaction has a
241 206 34 172 35
normal range and any data
falling outside the range is

46
 unusual and need to be
further investigated.
5 DATA MINING
TECHNIQUES
a. The objective is to dig up 3.5 1.4
large amount of data to
discover previously
unknown, action oriented,
hidden trends, patterns and
complex relationships. The 213 193 69 131 82
three major activities of
data mining techniques are
Discovery, Predictive
Modeling and Deviation
Analysis.
6 INVESTIGATING THE
EARLY WARNINGS
OF CREATIVE
ACCOUNTING such as
a. Cash flows that are not 3.1 1.4
138 172 103 172 103
correlated with earnings
b. Debtors balances that are 3.5 1.4
not correlated with 241 172 34 172 69
revenue
c. Allowances for bad debt 3.7 1.3
that have no correlation 241 206 34 172 35
with debtors balances.
7 Resources that are not 3.6 1.39
correlated with balance 241 172 69 138 68
sheet items
a. Acquisitions with 3.5 1.4
apparently no business 213 193 69 131 82
purpose
b. Earnings that consequently 3.5 1.4
precisely meet the 241 172 34 172 69
expectations of analyze
Average Score 208 182 62 155 81 3.5 1.40
Sources: Field survey2018

The results in the table above shows an enquiry that was made as regards the extent to which

respondents agreed or not on the relevance of the techniques used by forensic accountant in

curbing creative accounting. Majority of the respondents indicated their agreement that the

most of the techniques used by forensic accountant have aided in curbing creative accounting,

but they were however indecisive on effectiveness of such techniques as: filtering out the

symptoms of fraud from regular and normal transaction (Mean = 3.0), making trend analysis

47
by tabulating significant financial transactions (Mean = 3.1), analyze books with a view to

ascertaining accumulation of debit balances in loosely controlled account (Mean = 3.1),

Report if the goal of economy, efficiency and effectiveness have been achieved in the

transactions for which expenditures have been incurred or revenue collected (Mean = 3.1),

investigating cash flows that are not correlated with earnings in order to establish early

warnings of creative accounting (Mean = 3.1).

48
 I. Data analysis

The data presented above were analysed using one-way ANOVA, as indicated in Chapter

Three. Eviews Statistical Software was utilized to aid the analysis.

Table 4.4 One-way analysis of variance results for hypothesis one

Test for Equality of Variances Between Series

Date: 07/20/18 Time: 08:49
Sample: 1 19
Included observations: 19

Method df Value Probability

Bartlett 4 23.85118 0.0001

Levene (4, 660) 4.303988 0.0031
Brown-Forsythe (4, 660) 1.604819 0.1800

Category Statistics

Mean Abs. Mean Abs.

Median
Variable Count Std. Dev. Mean Diff. Diff.
SA 208 44.49154 36.91967 33.05263
A 182 13.58663 12.18837 10.52632
UND 62 27.37107 23.40166 22.26316
DA 155 25.47215 21.40720 16.94737
SD 81 37.45852 23.51801 22.89474
All 688 65.06479 23.48698 21.13684

Bartlett weighted standard deviation: 31.51266

*Note: included observations here refer to
number of items in the questionnaire used for the
analysis, and not the sample size, as the latter
equals 688.

Decision rule: If p-value for Bartlett F-value calculated is less than 0.05, we reject the null
hypothesis, otherwise, we fail to reject it.

Decision

From the results above, the between mean difference of the various responses was estimated
at 23.48698, the median at 21.13684, while the Bartlett weighted standard deviation stood at
31.51266. The Bartlett estimated F statistics is 23.85118, while its associated p-value of

49
0.0001<0.005 suggests that there is a significant variation between those who agreed and
others that disagreed that the techniques used by forensic accounting to curb creative
accounting has helped curbed creative accounting. On this ground, we reject the first null
hypothesis, which says that the techniques used by forensic accountants have not helped in
curbing creative accounting, and conclude otherwise, that is the techniques used by forensic
accounting has helped in curbing creative accounting.

4.5 Presentation of field survey data relating to hypothesis two

Table 4.5 The skills of the forensic accountant have aided in the prevention of
creative accounting.

S/N ITEMS SA A UND DA SD Mean STD

To what extend do you believe
that the under listed skills will
enhance the work of the
forensic accountants towards
curbing creative accounting?
1 Being calm, collected and a 3.5 1.4
241 172 34 172 69
good listener
2 Curiosity 241 206 34 172 35 3.7 1.3
3 Having good idea of human 3.6 1.4
psychology in order to
241 172 69 138 68
understand the impulse behind
criminal behaviour
4 An indent knowledge of 3.5 1.4
213 193 69 131 82
financial books
5 Interpersonal and 1.4
communication skills which 3.5
and conducting of interviews 241 172 34 172 69
and extracting critical
information from employees.
6 Proficiency in computer and 3.1 1.4
138 172 103 172 103
knowledge of network system
7 A thorough understanding of 3.6 1.4
241 172 69 138 68
fraud schemes
8 Thorough knowledge of 3.5 1.4
company’s governance makes
213 193 69 131 82
out the laws that regulate these
policies
9 Command of criminal and civil 3.5 1.4
law, as well as of the legal
241 172 34 172 69
system, law of evidence and
court procedures
10 Creative i.e ability to venture 241 172 34 172 69 3.5 1.4
50
 into new things and depart from
the norm
11 Independent 241 206 34 172 35 3.7 1.3
12 Sense of urgency and 3.55 1.4
241 172 69 138 68
commitment
13 Ability to communicate 3.5 1.4
complex theoretical ideas in a
212 193 69 131 83
manner which is really
understandable by the layman
14 Sound understanding of 1.4
peculiarity of various business 241 172 34 172 69 3.5
methods.
15 Ability to review large volume 3.1 1.4
138 172 91 185 102
of documentation.
16 Ability appears objective and 3.6 1.4
professional even when taking
251 172 58 138 69
part in the inherently partisan
process in a court.
Average Score 223 180 57 157 71 3.5 1.40
Sources: Field survey2018

An enquiry was equally made as regard the extent to which respondents believe that
the some skills possessed by forensic accountant will aid them to prevent creative
accounting. The analyses as presented in the table above yield wide acceptance, with
the exemption of the following under listed skills for which respondents were
indecisive: being proficient in the knowledge of computer and network system (Mean
= 3.1), and being able to review large volume of documentation (Mean = 3.1).

II. Data analysis

The data presented above were analysed using one-way ANOVA, as indicated in Chapter

Three. Eviews Statistical Software was utilized to aid the analysis.

51
Table 4.6 One-way analysis of variance results for hypothesis two

Test for Equality of Variances Between Series

Date: 07/13/18 Time: 09:35
Sample: 1 16
Included observations: 16

Method df Value Probability

Bartlett 4 15.58552 0.0036

Levene (4, 660) 2.914006 0.0268
Brown-Forsythe (4, 660) 0.800492 0.5287

Category Statistics

Mean Abs. Mean Abs.

Median
Variable Count Std. Dev. Mean Diff. Diff.
SA 223 34.94162 24.92188 18.12500
A 180 13.07016 11.25781 8.187500
UND 57 24.39800 20.94531 19.56250
DA 157 19.10399 18.21094 16.18750
SD 71 18.70829 12.18750 11.25000
All 688 67.75326 17.50469 14.66250

Bartlett weighted standard deviation: 23.24638

Decision rule: If p-value for Bartlett F-statistic calculated is less than 0.05, we reject the
second null hypothesis; otherwise, we fail to reject it.

Decision

From the results above, the between mean difference of the various responses was estimated
at 17.50469, the median at 14.66250, while the Bartlett weighted standard deviation stood at
23.24638. The Bartlett estimated F statistics is 15.58552, while its associated p-value of
0.0036<0.005 suggests that there is a significant variation between those who agreed and
others that disagreed that the skills of the forensic accountants will enhance the work of the
forensic accountants towards curbing creative accounting. On this ground, we reject the
second null hypothesis, which says that the skills of the forensic accountant have not aided
the prevention of creative accounting, and conclude otherwise, that is the skills of the forensic
accountant have aided the prevention of creative accounting.

52
 4.7 Presentation of field survey data relating to hypothesis one

Table 4.7 The emergences of forensic accountants have not restored confidence in
credibility of corporate firms and their report.

Items SA A UND DA SD Mean STD

1 Do you think that the activities or the role 3.1 1.4
forensic accountants have played so far in
investigation and detention of fraud in
138 172 103 172 103
Nigeria has restored confidence in the
credibility of corporate firms and their
report?
2 Would you advocate that forensic audit 3.6 1.4
should be made mandatory for every 244 172 69 138 65
company and all public sector organization?
3 Do you think their mandatory existence in 3.5 1.4
all company and all public sector
213 193 69 131 83
organization will reduce corruption and give
quality assurance to financial reporting?
Average Score 198 179 80 147 84 3.5 1.40
Sources: Field survey2018
-

An enquiry was also made as regards the extent to which respondents believe that the

emergence of forensic accountants have restored confidence in the credibility of corporate

firms and their report. The analyses yield wide acceptance from respondents as the mean

scores of the items used indicate, only with the exemption of the item that measures the

extent to which respondents think that the activities or the role forensic accountants have

played so far in investigation and detention of fraud in Nigeria has restored confidence in the

credibility of corporate firms and their report, which Mean = 3.1.

53
 III. Data analysis

The data presented above were analysed using one-way ANOVA, as indicated in Chapter

Three. Eviews Statistical Software was utilized to aid the analysis.

Table 4.8 One-way analysis of variance results for hypothesis three

Test for Equality of Variances Between Series

Date: 07/13/18 Time: 09:57
Sample: 1 16
Included observations: 16

Method df Value Probability

Bartlett 4 24.30599 0.0001

Levene (4, 660) 4.267288 0.0036
Brown-Forsythe (4, 660) 1.806162 0.1365

Category Statistics

Mean Abs. Mean Abs.

Median
Variable Count Std. Dev. Mean Diff. Diff.
SA 198 39.90442 29.60156 26.31250
A 179 11.68974 10.14063 7.375000
UND 80 24.84611 19.02344 17.31250
DA 147 19.53288 18.75000 18.75000
SD 84 17.38090 13.02344 12.06250
All 688 63.38342 18.10781 16.36250

Bartlett weighted standard deviation: 24.61695

Decision rule: If p-value for Bartlett F-statistic calculated is less than 0.05, we reject the
third null hypothesis; otherwise, we fail to reject it.

Decision

From the results above, the between mean difference of the various responses was

estimated at 18.10781, the median at 18.36250, while the Bartlett weighted standard

deviation stood at 24.61695. The Bartlett estimated F statistics is 24.30599, while it’s

associated p-value of 0.0001<0.005 suggests that there is a significant variation

between those who agreed and others that disagreed that the emergence of forensic
54
accountants has restored confidence in credibility of corporate firms and their reports.

On this ground, we reject the third null hypothesis, which says otherwise and

conclude that the emergence of forensic accountants have restored confidence in the

credibility of corporate firms and their report.

4.9 Discussion of Findings

This study reveals a number of important findings on the influence of forensic accounting on
creative accounting. Specifically, the study shows that forensic accounting has played a
significant role in curbing creative accounting within the North central area of Nigeria. This
finding is consistent with that of Okoye and Gbegi (2013) found that the use of Forensic
Accounting do significantly reduce the occurrence of fraud cases in the public sector and
equally argued that the use of Forensic Accountants can help better in detecting and
preventing fraud cases in the public sector organizations. It is also in agreement with that of
Joseph, Okike, and Yoko (2016) study which revealed that forensic accounting have a
significant role to play in fraud detection and prevention in Nigeria. It equally support the
study by Amake and Ikhatua (2016) which showed that forensic accounting is highly relevant
in the detection of fraud, particularly in the Public sector.

Additionally, the study also revealed that accounting Professionals within the study area are
not only in the know of the modus operandi of forensic accountants, as regards the skills they
employ when doing their forensic investigations, but also verified or attest to the proposition
that the skills used by this locational forensic accountants have profoundly helped to reduce
the prevalence of creative accounting. This finding echoes the effort of Beneish (1999) who
developed the Beneish M-Score measure and proved that when forensic accountants master
the use of this score, their skill in the detection of fraud and fraudulent practices will be better
enhanced.

Finally, this study also showed that investors, regulators and customers of the business
corporations within the study area have begun to have confidence in the financial reports
presented by the corporate firms. This is particularly so, as the responses of the sampled
professional accountants within the study area confirm that general public now have
confidence in the credibility of the reports presented by corporate firms.

55
 CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSION AND RECOMENDATION

5.1 Introduction.

This chapter consists of discussions on summary of major findings, conclusion,

recommendations and contribution to knowledge.

5.2 Summary of findings

Forensic accounting has been very effective in curbing creative accounting in

financial reporting in many organizations. This precipitated the researcher’s interest
into investigating the extent to which the forensic accountant will help in curbing
fraud in Nigeria firms. Cases of creative accounting have being identified in this study
ranging from that the Enron Saga revelation were officers used creative accounting
practices to conceal about $600 million in net losses over a period of three years
1997-2000; WorldCom, another American giant, were creative accounting was used
to re-classify and amortize revenue expenses amounting to $3.85 billion over a long
period of the time.

In other to achieve the stated objectives, the study review the position of extant
literature and found that predominantly, there has been an established connection
between forensic accounting and creative accounting, especially developed countries.

To obtain an empirical understanding of the relationship between these phenomena,

the survey method of research design was adopted, using the questionnaire approach
to obtain information from professional accountants within the North central zone-
Nigeria. Data analysis commenced by describing responses to the items used to
measure the underlying variables of the study, with particular reference to frequency
distribution of responses. Further analysis was conducted using One-way analysis of
variance to verify the position of the stated hypotheses in the study.

The study has been able to demonstrate that the techniques used to Forensic
accountants, have helped to stem the tide of creative accounting. This is particularly

56
 so pertaining to such skills as critical point auditing, propriety auditing, ensuring
corporations gets value for their money, using relative size factor to guide against the
normal amount required to spend on each transaction, using data to discover; predict;
and identify deviations from conventional accounting practices, and finally,
investigating the early warnings of creative accounting.

Of the skills that have being identified in this study as worthy of possessing in order
for Forensic accountant to be able to curb creative accounting, the following are
worthy of mentioning, due to their being most favoured by the findings of the study:
being calm and listening carefully, being curious, possessing good psychology of
criminal tendencies, having an indebt knowledge of financial books, having good
understanding of criminal and civil laws,

Additional findings suggest that the emergence of forensic accounting in Nigeria have
played a significant role in the investigation and detection of fraud and consequently
helped to restore some measure of confidence in the credibility if corporate
accounting.

From the analysis of this work, alternative hypotheses were accepted; indicating that
forensic accounting plays a major role in fraud management; therefore Techniques
used by forensic accountants have helped in curbing creative accounting. Respondents
also agreed that the emergence of forensic accountants have restored confidence in the
credibility of corporate firms and their report.

5.3 Conclusion

The growing demand for forensic accounting is a known characteristic of most

companies in the world. Forensic accounting arises from the effect and cause of fraud
and technical error made by human. Forensic accounting is quite new in Nigeria as
companies have realized that the service of a forensic accountant is needed as fraud
cases have substantially increased in number. Forensic accounting is the application
of financial skills and investigative mentality to unsettled issues, conducted within the
context of the rules of evidence.
The role of a forensic accountant under contemporary conditions is very important.
This is because forensic accountants, in accordance with the essence of forensic
accounting, investigate and document frauds. By applying accounting principles,

57
 auditing skills and investigative procedures in solving certain legal problems, forensic
accountants help lawyers, courts, regulatory bodies and other institutions in
investigating financial frauds. Base on the findings of this study, it can be concluded
that the techniques used by forensic accounting has helped in curbing creative
accounting; the skills of the forensic accountant have aided the prevention of creative
accounting; and that the emergences of forensic accountants have restored confidence
in credibility of corporate firms and their report.

5.4 Recommendations

In the light of the observations made, the following recommendations are made:

1. In the area of the techniques used by forensic accountants to detect creative

accounting, it is recommended that forensic accountants should strive to learn the skill
of filtering, which is required to differentiate fraudulent entries from non-fraudulent
entries. They should also ensure that they learn relevant statistical analyses like trend
and cluster analyses so as to be able to identify the spate of crime and classifying
them according to certain relationships that they exhibit. These techniques can
facilitate in the identification of criminal practices in corporate organizations.
2. In the area of acquiring skills, forensic accountants should ensure that they are
proficient in the use of computer, as particularly in the use of spreadsheet programmes
like Excel and other related computational programmes. They should also be
conversant with Microsoft word programme so that they can easily review large
volume of documentations through relevant search and review options.
3. Government and regulatory authorities should ensure the provision of standards and
guidelines to regulate forensic activities and above all Nigerians should embrace
integrity, objectivity, fairness and accountability in their day-to-day activities
4. There is the need that forensic accountant must possess solid knowledge and skills in
the area of accounting and auditing, and A code of conduct should be established in
every ministry in the state and officers or staff should be made to declare their assets
from time to time. More training or favourable environment like attributes of
independence, transparency, accountability, competence etc should be created to
enhance the practice or operation of Forensic Accounting

58
 5. A forensic accountant should be considered independent if they are intellectually
honest, ready to make impartial decisions and have no interests or obligations in
relation to the client, management or the owner.
6. Also, they must have a developed capability of verbal and written communication,
capability of perceiving details and of the efficient application of investigative
activities as well as a considerable degree of knowledge about information
technologies in accounting and auditing procedures.
7. Finally, Forensic Accounting will institute good corporate governance in the public
sector which will install public confidence in the government and the entire system.

5.5 Contribution to knowledge

As earlier described in the preceding chapters, there are groups of studies that have
been devoted to providing an understanding of the reasons for the rising spate of fraud
and fraudulent activities and their incidences (Okoye&Akamobi, 2009;
Owojori&Asaolu, 2009; Izedomin&Mgbame, 2011; Kasum, 2009)., and there others
that have equally demonstrated the relevance of forensic accounting in curbing
creative accounting in some part of Southwest and some part of North-central part of
Nigeria (Okoye&Gbegi, 2013;Okike, & Yoko, 2016; Amake&Ikhatua, 2016).
However, on aggregate terms, and with particular reference to the generality of the
North-central zone, little is known on not only the relevance of forensic accounting in
curbing creative accounting; but also on the extent to which the skills possessed by
forensic accountant have helped or capable of curbing corruption in within the study
area in particular, and the nation in general; and finally on the extent to which the
application of forensic accounting practices by corporate firms have helped to
enhance the credibility of their business reputation and that of their financial
statements. These areas mentioned invariably formed the contribution of the study to
knowledge.

North central zone was chosen for the research work because of the proximity to
research questionnaires’ respondents, data and other necessary information for the
success of the research.

59
5.6 Recommendation for future studies
This study has been able to show the relevance of forensic accounting in curbing
creative accounting within the North-central area. Future studies should provide
similar zonal knowledge, with either reference to Northwest or Northeast or even any
other zones in the Southern part of Nigeria, on the relevance of forensic accounting in
curbing creative accounting. They (future studies) might not utilize only survey
approach, but could utilize a mixture of primary data, involving also interview to gain
an in-depth understanding of the relationship between the variables under study. They
could also use such data analysis techniques as ANCOVA (Analysis of Covariance)
and regression analysis to not only determine whether a significant relationship exists
between the variable sets, but also to be able to tell the magnitude and the direction of
such relationship.

60
 REFERENCES

Aghghaleh S.F., Mohamed Z.M., & Rahmat M.M. (2016). Detecting financial statement
frauds in Malaysia: Comparing the abilities of Beneish and Dechow models. Asian
Journal of Accounting and Governance 7(1), 57-65.

Albrecht, W.S.,& Albrecht, C.O. (2004).fraud examination & prevention. Manson, OH:
Thomson South-Western.

Arokiasamy, L., & Cristal-Lee.S. (2009). Forensic accounting: Public Acceptance towards
occurrence of fraud detection.International Journal of Business and
Management.145-160.

Beneish, M.D (2009). The Detection of Earnings Manipulation. Indiana University, Kelley
School of Business, 1-27.

Bolkaoui, A. R. (2004). Accounting Theory (5th ed.). Thompson Learn.

Curtis P, Thalassinos J. (2005). Equity fund raising and creative accounting practices:
Indications from the Athens Stock Exchange for the 1999-2000 period. European
Research Studies Journal. 8(1-2), 127-135.

Dechow P.M., Ge W, Larson C.R., & Sloan R.G. (2011). Predicting material accounting
misstatements. 28(1), 17-82.

Er B. & Varıcı İ, (2013). Muhasebe manipülasyonu ve firma performansı ilişkisi: İMKB

uygulaması. Ege Akademik Bakış13:1, 43-52.

Fredrichs, K. (2007). Extract from Practices Bureau in Investigation, (FBI) Publishers.

Franceschetti B.M, & KoschtialC. (2013). Do bankrupt companies manipulate earnings more
than the non-bankrupt ones? Journal of Finance and Accountancy. 12(1), 1-23.

Ghosh, S. (2010).Creative accounting: A Fraudulent Practice Leading to Corporate

collapses. Research and Practice in Social Sciences. 6 (1), February, 1 –
15.http://m.news24.com/nigeria/National/News/Nigeria-probes-funds-
embezzlement-20180628.

Grove H,& Cook T. (2004). Lessons for auditors: Quantitative and qualitative red flags.
Journal of Forensic Accounting. 5(1), 131-146.

Hecht, M. & Redmond. (2012). Unveiling the Mystery of Forensic Accounting.Oregon

Society of Certified Public Accountants.Published by AccountingToday Retrieved on
12/11/2017 from www.orcpa.org.

Izedonmi F.P. (2000). Introduction to Auditing (1st Ed). Benin. Ambik Press

61
Jugu, Y.G. (2007). Corruption in the Public Sector: An Issue of Serious Concern. The
Nigerian Accounting Horison, 1 (1) Jul-Dec. 2007: A Journal Publication of the
Department of Accounting University of Jos.

Jugu, Y.G. (2012). An Empirical Search for Appropriate Skill of Forensic Accountants.

Khersiat, O.M. (2018). The Role of the Forensic Accountant in the Detection of Tax Fraud in
Financial Statements: A Survey Study in the Jordanian Accounting and Auditing
Offices and Firms. International Journal of Economics and Finance; 10(5), 145-153.

Keshi, O. N. (2011). Nature and taxonomy of fraud.Institute of Chartered Accountants of

Nigeria Forensic Audit & Investigation Faculty.

Küçüksözen C, Küçükkocaoğlu G.(2004). Finansalbilgi manipülasyonu: İMKB şirketleri

üzerine ampirik bir çalışma. 1st International Accounting Conference on the Way to
Convergence, MÖDAV, İstanbul.

Lilly, J.R., Cullen, F.T., & Ball, R.A. (2002). Criminology Theory: Context and
Consequences (3rded.)Thousand Oaks, C.A. Sage Publications.

Lungu, I., Potecca, C., &Rotaru.H. (2009). Techniques Used in Creative Accounting.Annals
of DAAAM & Proceedings: DAAAM International Vienna. Accessed 02/26/2018
from www.google.com.
Merriam-Webster's collegiate dictionary (10th ed.). (1999). Springfield, MA: Merriam-
Webster Incorporated. May 2, 2017

Michael, B. (2004). Forensic Accounting: Its Positively Ancient, Rosenfrab, M & K

Publisher

Mulford, C. W., &Comiskey, E. M. (2002).The Financial Numbers Game: Detecting

Creative Accounting Practices. New York: John Wiley & Sons.

Okoye, E.I.&Gbegi, D.O., (2013).Forensic Accounting: A Tool for Fraud Detection and
Prevention in the Public Sector. (A Study of Selected Ministries in Kogi
State).International Journal of Academic Research in Business and Social Sciences
March 2013, 3,( 3).

Ojo, M. (2012).A global Perspective on the changing perceptions of the role of the external
auditor and the significance of audit developments, Working Paper, University of
Heidelberg, Munich.

Osisioma, H.E. (2004).Conflict Management in Nigeria; a PhD Thesis Submitted to

Universityof Nigeria, Nsukka.

Osisioma, B. C. (2012). Combatting Fraud and White Collar Crimes: Lessons From Nigeria.

62
Osisioma, B. C. (2010). Electoral Reforms and Good Governance: Path to a New Dawn,
Public Lecture Presented on the Occasion of Inauguration of the Executive Governor
of Anambra State, For a Second Term in Office, Women Development Centre, Awka.
March 16.

Özcan, A. (2018). The Use of Beneish Model in Forensic Accounting: Evidence from
Turkey, Journal of Applied Economics and Business Research JAEBR, 8(1):57-67.

Orellana, A. & Marino G.T.(2017) Measuring fraud and earnings management by a case
study; Evidence from international family business, European Journal, 7;1-2, 41-53.

Repousis, S. & Repousis S. (2016). Using Beneish model to detect corporate financial
statement fraud in Greece.Journal of Financial Crime 23:4, 1063-1073.

Rosner.(2003) Earnings Manipulation in Failing Firms, Contemporary Accounting Research.

20,( 2), Summer 2003

Rosner, Rebecca L.(2003).Earnings Manipulation in Failing Firms. Contemporary

Accounting Research,20 ( 2), Summer 2003. Available at SSRN:
http://ssrn.com/abstract=427661

Remenaric, B., Mijoc, I, &Kenfelja, I. (2018). Creative Accounting- Motives, Techniques

and possibilities of prevention.ECONVIEWS, 1/2018,!93-199.

Schafer, E.D .(2008). Ancient Science and Forensics. In AynEmbar-seddon,

Allan D. Pass (ed). Forensic sciences.Salem Press. P.40. ISBN 978-1-58765-423-7

Simeunović, N., Grubor, G. &Ristic, N. (2016).Forensic accounting.

Skousen, C.J., Smith, K.R. & Wright, C.J. (2009).Detecting and predicting financial
statement fraud: The effectiveness of the fraudtriangle.Advances in Financial
Economics. Emerald Group Publishing Limited, 53-81.

Spathis, C.T.( 2002). Detecting false financial statements using published data: Some
evidence from Greece.Managerial Auditing Journal 17(4), 179-191.

Suleiman, N., Yahaya, L & Abba, M. (2018). Influence of Forensic Accounting Practices on
Fraud Prevention among Listed Companies in Nigeria.Research Gate.

Sutherland, E.H. & Orellana (2017). Principles of criminology (4thed). Philadelphia: J.B.
Lippincott.

Sutherland. (1983). White collar crime: the uncut version. New haven, CT: Yale University
Press.Tahmina, A. &Naima, J. (2016).Detection and analysis of probable earnings
manipulation by firms in a developing country.Asian Journal of Business and
Accounting 9(1), 59-82.

63
Thomas Levanti. (2011). Litigation Services Committee of the NYSSCPA:
http://www.nysscpa.org/sound_advice/forensic_acc.htm.

Varıcı İ, Er, B. (2013).Muhasebemanipülasyonuve firma performansıilişkisi:

İMKBuygulaması.EgeAkademikBakış13(1), 43-52.

Voght, P. (2003). Forensic Accounting Emerges as a Hot Field. Retrieved June 17, 2018.from
http:www.rgl.com.

Wells, J.T. (2004). Corporate Fraud Handbook: Prevention and Detection. John Wily &
Sons.

Wolf, D.T. &Hermanson, D.R. (2004).The Fraud Diamond: Considering The Four Elements
of Fraud.The CPA Journal, December.

www.forensicaccounting.com/there.htm.Wikipedia, (2018),
http://en.wikipedia.org/wiki/Good_governance

: http://entrance-exam.net/difference-between-forensic-accounting-and-forensic-
science/#ixzz5rCQCDvOP

64
 APPENDIX I

QUESTIONNAIRE

SECTION A

To what extent do you think the under listed techniques employed by forensic
auditors will help to curb creative accounting / fraudulent financial reporting.

S/N ITEMS SA A UND DA SD

1 CRITICAL POINT AUDITING
Ø Filtering out the symptoms of fraud from regular and normal
transactions in which they are mixed or concealed.
Ø Make trend analysis by tabulating significant financial
transactions.
Ø Ascertaining unusual debit / credits in accounts normally
closing to credit/ debit balances
Ø Ascertaining false credits to boost sales with corresponding
debits to non-existent during personal accounts.
Ø Filtering discrepancies in debtors / creditors / stock balances as
evidenced from the non-reconciliation between financial
records and corresponding subsidiary records.
Ø Analyze books with a view to ascertaining accumulation of
debit balances in loosely controlled account.
Ø Analyze cross debits and credits and inter-account transfers
Ø Ascertaining weaknesses and inadequacies in internal central /
check system.
2 PROPRIETY AUDIT
Ø Make a compliance test to ascertain if all expenditures
sanctioned and incurred are need based
Ø Ensure that all due revenues have been realized in time and
entered in the necessary account.
3 VALUE FOR MONEY TECHNIQUES
Ø Report if the goal of economy, efficiency and effectiveness
have been achieved in the transactions for which expenditures

65
 have been incurred or revenue collected.
4 RELATIVE SIZE FACTOR
Ø This states that each field in any transaction has a normal range
and any data falling outside the range is unusual and need to be
further investigated.
5 DATA MINING TECHNIQUES
Ø The objective is to dig up large amount of data to discover
previously unknown, action oriented, hidden trends, patterns
and complex relationships. The three major activities of data
mining techniques are Discovery, Predictive Modeling and
Deviation Analysis.
6 INVESTIGATING THE EARLY WARNINGS OF
CREATIVE ACCOUNTING such as
Ø Cash flows that are not correlated with earnings
Ø Debtors balances that are not correlated with revenue
Ø Allowances for bad debt that have no correlation with debtors
balances.
7 Resources that are not correlated with balance sheet items
Acquisitions with apparently no business purpose
Earnings that consequently precisely meet the expectations of
analyze

SECTION 2
To what extend do you believe that the underlisted skills will
enhance the work of the forensic account;
1 Being calm, collected and a good listener
2 Curiosity
3 Having good idea of human psychology in order to understand
the impulse behind criminal behaviour
4 An indent knowledge of financial books
5 Interpersonal and communication skills which and conducting
of interviews and extracting critical information from

66
 employees.
6 Proficiency in computer and knowledge of network system
7 A thorough understanding of fraud schemes
8 Thorough knowledge of company’s governance makes out the
laws that regulate these policies
9 Command of criminal and civil law, as well as of the legal
system, law of evidence and court procedures
10 Creative i.e ability to venture into new things and depart from
the norm
11 Independent
12 Sense of urgency and commitment
13 Ability to communicate complex theoretical ideas in a manner
which is really understandable by the layman
14 Sound understanding of peculiarity of various business
methods.
15 Ability to review large volume of documentation.
16 Ability appears objective and professional even when taking
part in the inherently partisan process in a court.

SECTION 3
Do you think that the activities or the role forensic accountants
have played so far in investigation and detention of fraud in
Nigeria has restored confidence in the credibility of corporate
firms and their report.
1 Would you advocate that forensic audit should be made
mandatory for every company and all public sector
organization.
2 Do you think their mandatory existence in all company and all
public sector organization will reduce corruption and give
quality assurance to financial reporting.

67
 CASES OF FRAUD IN NIGERIA PUBLIC SECTOR

Table 2.1

S/N DATE TRIAL FRAUD AMOUNT STATE PERPETRATOR

COURT COMMITTED INVOLVED
1 2007 Abuja, Cheating (use of N25.7 billion FCT NNPC
Federalexchange rate for
High Court
lower than those
published by
CBN in
remitting crude
allocation
th
2 13 August, FHC, Abuja Misappropriation N1.5 billion FTC/ SaniLulu and 3
2010 Justice of public fund Abuja other sacked NFF
Donatus board members
3 3rd April, 012 Lagos High Conspiracy N109 million FCT Three civil

Court, forgery and service

Justice fraudulent commission staff

MohdShuai conversion of

bu fund of the

commission

4 9th Feb, 012 FHC, Abuja Corruption and 1.3 billion FCT Formal Health

Defrauding Minister, Sen.

Federal IyaboObasanjo

68
 Government

5 28th May,012 FHC, Abuja Defrauding N38 billion FCT Office of the

Police Pension police pension

Office board

6 2010 Anambra Forgery and 252.9 million Anambra College of

High Court, Alteration Education Bursar

7 22/2/012 FHC, Abuja Using a non- N9 Billion FCT Formal house of

existing representative

company to speaker

obtain contract

8 2009 Fed High Misappropriation N80 billion Lagos Francis Atuche,

Court, of public fund Former CEO,

Lagos Bank PHB

9 2010 Fed High Misappropriation N55 billion Lagos Chief OsaOsunde

(formal chairman
Court, of public fund Afribank) and 4
directors:
Lagos JibrinIsah, Isa
Zailani,
ChineduOnyia
and Henry
Arogundade
10 2010 Fed High N136 million Kaduna Mr.
OladeleShittu,
Court, CEO of Credence
Investment
Kaduna,

Justice

MohdShaib

11 2013 Federal Charged for N11 billion Kogi AuduAbubakar

and Anor.

69
 High Court corruption

Abuja related money

laundering

allegedly

committed by

him while in

office as

executive

Governor of the

state.

12 2015 Federal Charged for Bayelsa Timipre Sylva.

High Court corruption

Abuja related money

laundering

allegedly

committed by

him while he

was the governor

of the state.

13 2016 Federal Dasukigate arms S2.1 billion Abuja Col.

SamboDasuki
High Court deal scandal (retd).

Abuja.

Source: EFCC Media Unit Published; (2016)

70