Automated forensic auditing and fraud control in nigeria

Project Abstract

Forensic auditing is a critical component in the fight against fraud and corruption in Nigeria. As the country grapples with increasing cases of financial mismanagement and fraudulent activities, the need for automated forensic auditing tools and techniques has become more pressing. This research project aims to explore the implementation of automated forensic auditing systems in Nigeria to enhance fraud detection and control mechanisms. The study will investigate the current state of forensic auditing practices in Nigeria and identify the limitations and challenges faced by forensic auditors in detecting and preventing fraud effectively. By leveraging automated tools such as data analysis software, artificial intelligence, and machine learning algorithms, the research seeks to streamline the forensic audit process and improve the efficiency and accuracy of fraud investigations. Furthermore, the project will examine the legal and regulatory framework governing forensic auditing in Nigeria to assess the adequacy of existing laws and regulations in combating financial crimes. By identifying gaps in the regulatory framework, the research aims to propose recommendations for strengthening the legal mechanisms for forensic auditing and fraud control in the country. The research will also explore the role of forensic auditors in collaborating with law enforcement agencies, regulatory bodies, and other stakeholders in the fight against fraud. By fostering partnerships and information sharing among relevant parties, the study aims to create a more cohesive and coordinated approach to combating financial crimes in Nigeria. Moreover, the project will investigate the potential benefits of automated forensic auditing systems, including cost savings, improved accuracy, and faster detection of fraudulent activities. By analyzing case studies and best practices from other countries that have successfully implemented automated forensic auditing tools, the research aims to provide insights and recommendations for adopting similar technologies in the Nigerian context. In conclusion, this research project on automated forensic auditing and fraud control in Nigeria seeks to contribute to the ongoing efforts to strengthen anti-fraud measures and enhance financial transparency in the country. By harnessing the power of technology and establishing strong partnerships among stakeholders, the study aims to pave the way for a more secure and accountable financial environment in Nigeria.

Project Overview

<p> </p><p><strong>INTRODUCTION</strong></p><p>Mobile wise geek (2011) defined fraud as a deliberate misrepresentation that causes a form of monetary losses. All of these are usually required for an act to be considered fraud, if someone lied about his name. United states legal (2011), defined fraud an international misrepresentation of material existing facts made by one person to another with the knowledge of its falsity and for the purpose of inducing the other person to act, and upon which the other person relies with resulting injuries or damages. Fraud has been in existence from the beginning of creation, and the increase of fraud on daily basis brought about forensic auditing. Forensic auditing is defined as the activity that consist of gathering, verifying, processing, analyzing of and reporting of data in order to obtain facts and /or evidence in the area of legal of financial disputes and or irregularities including fraud and giving preventative advice. IFA (2011). Fraud is an independent criminal offence, and it is the main phenomenon that gave birth to forensic auditing, especially those related to economic crime. These economic crimes are known to be an unpleasant fact and a disheartening issue in the heart of many organizations, and the control of it, is a concern for any organization that employs employees, accountants or other hired professional that have access to the organization’s income, receipts or funds.</p><p>Therefore, we are faced with the inescapable conclusion that forensic auditors are charged with the responsibility of controlling and preventing those fraudulent practices.</p><p><strong>1.1 BACKGROUND OF THE STUDY</strong></p><p>Brief History of Economic and Financial Crime Commission (EFCC) The Economic and Financial Crime Commission (EFCC) has grown to a robust and reputable national institution that now commands respect. They have gained the admiration of Nigerians and the international community as a whole as the most vibrant anti-corruption fighting organization that has fought corruption to a standstill within the short time of its existence. Over the years, Nigeria suffered tremendously in her economy in the hands of corrupt leaders who for selfish reasons reduced a country like Nigeria which is rich in oil to one of the poorest countries in the world. All these brought about the establishment of EFCC. i. Formation of the Economic and Financial Crime Commission (EFCC) The Economic and Financial Crime Commission (EFCC) was established in 2003 by the Economic and Financial Crimes Commission Act 2002, and re-enacted in 2004 by the Act as a body corporate with perpetual succession and common seal. It has its headquarter at No 5 Fomella Street, Off Crescent, Wuse 11, Abuja. With Nuhu Ribadu as the first executive chairman until 2008 he was replaced by Farida Waziri, and Mr. Ibrahim Lamorde was appointed the chairman of the commission on 15th February 2012 and he is still the substantive chairman till date. Its establishment was partially in response to pressure from the financial task force on money laundering (FATF), which named Nigeria as one of the 23 countries non-cooperative in international communities’ effort to fight money laundering. ii. Vision statement: To make Nigeria a safe and corrupt free business environment for sound health and positive image of the country. iii. Mission statement: The mission statement of the commission includes;</p><p>a. To curb the menace of corruption that constitutes the cog in the wheel of progress of Nigerians.</p><p>b. To protect national and foreign investments in the country.</p><p>c. To imbibe the spirit of hard work in the citizenry and discourage ill-gotten wealth.</p><p>d. To identify illegally acquired wealth and confiscate it. e. To build an upright workforce in both public and private sector of the economy.</p><p>f. To contribute to the global war against financial crimes and terrorism financing in Nigeria.</p><p><strong>1.2 STATEMENT OF THE PROBLEM</strong></p><p>In this study, there are certain problems that are related to the application of forensic auditing and the include;</p><p>1. Insufficient skilled manpower for the use of automated tools or software.</p><p>2. Insufficient documented materials for investigating suspects.</p><p>3. Inadequate techniques for obtaining evidence.</p><p>4. High cost of analysis.</p><p><strong>1.3 STATEMENT OF OBJECTIVES</strong></p><p>The general objectives of the study, is to examine the role of automated forensic auditing on fraud control, while the specific objectives of the study are as follows.</p><p>1. To determine why there are insufficient skilled manpower needed for operating automated tools.</p><p>2. To investigate the reasons for insufficient documented materials.</p><p>3. To examine the cause of not obtaining enough techniques used as evidence.</p><p>4. To evaluate the reasons for high cost of analysis.</p><p><strong>1.4 RESEARCH QUESTION</strong></p><p>Based on the foregoing, the following research questions were formulated:</p><p>i. Is there any significant relationship between automated forensic auditing and fraud control?</p><p>ii. Are there methods adopted to adequately train forensic auditors with investigative skills?</p><p>iii. Are these measures employed to solve the problem of insufficient documented materials necessary for investigating suspects?</p><p>iv. Are these standards set for improving on techniques that are meant for obtaining evidence?</p><p><strong>1.5 RESEARCH HYPOTHESES</strong></p><p>The following are the hypotheses to be tested.</p><p>Ho1: There is no significant relationship between automated forensic auditing and fraud control.</p><p>HA1: There is a significant relationship between automated forensic auditing and fraud control.</p><p>Ho2: There are no methods adopted to adequately train forensic auditors with investigative skills.</p><p>HA2: There are methods adopted to adequately train forensic auditors with investigative skills.</p><p>H03: There are no measures employed to solve the problem of insufficient documented materials necessary for investigating suspects.</p><p>HA3: There are measures employed to solve the problem of insufficient documented materials necessary for investigating suspects.</p><p><strong>1.6 SIGNIFICANCE OF THE STUDY</strong></p><p>This study of forensic auditing will be helpful to the following categories of users. For Management: It will serve as a reference document for management to use as a guide for investigating and controlling fraud. For Auditors: It will serve as a revision kit for practicing auditors in the field. For the Public: It will add to existing knowledge by exposing the public on the matter of fraud, making them know that even if fraud cannot be completely eradicated, it can be controlled.</p><p>For Researchers/Analyst: It will serve for future research study.</p><p><strong>1.7. SCOPE OF THE STUDY</strong></p><p>This study covers the activities of the Economic and Financial Crime Commission (EFCC), in Nigeria, especially the branch that is situated in Port-Harcourt.</p><p><strong>1.8. LIMITATIONS OF THE STUDY</strong></p><p>This research work was faced with certain challenges owing to the fact that the topic in question is not yet widely known. VI2: i. Inadequate Materials: This was the major constraint of the research work, for it was limited to few materials and mainly on internet. ii. Time Factor: This is another factor that limited the flow of this research work. Time factor is a constraints limitation the study. Inadequate time to work due to some school activities that restricts student from going out to research. iii. Distance: The different location of where the materials are to be gathered from posed a problem to this work, since it requires going from one accounting firm to another to gather facts relating to the topic. iv. School Exeat: Here getting permission to sign out of school is a very big problem to the researcher. School exeat sometimes limits us student from gathering enough material for our work.</p><p>v. Fund: This serves as a major constraint to the research work. Enough funds are required in getting materials for this work.</p><p><strong>1.9. DEFINITION OF TERMS AUTOMATION:</strong></p><p>This is the use of control systems and information technology to reduce the need for human work in the production of goods and services.</p><p>FORENSIC: Belonging to, used in or suitable to courts of judicature.</p><p>FRAUD: Irregularities involving the use of criminal detection to obtain unjust or illegal advantage.</p> <br><p></p>