FORENSIC ACCOUNTING, FRAUD ANALYSIS, INVESTIGATION AND PREVENTION: A CASE OF DEPOSIT MONEY BANKS IN NIGERIA Section Articles

Abstract

The study examines the role of forensic accounting in detecting, analysing, investigating
and preventing fraud in Nigerian Deposit Money Banks (DMBs). The banking sector is the
most vulnerable industry in Nigeria to fraud with the Nigeria Deposit Insurance
Corporation (NDIC) reporting cumulative losses in the sector from 2019 to 2023 has
surpassed ₦150 billion. The study was of a convergent mixed methodology. The
population consisted of forensic accountants, internal auditors, compliance officers, risk
officers and external forensic investigators in the 24 licensed DMBs in Nigeria. Stratified
random sampling was used to select a sample of 220 respondents (68 forensic accountants,
84 internal auditors, 48 compliance/risk officers, and 20 external investigators) and a fiveyear longitudinal analysis of NDIC fraud data, 2019-2023, supplemented with 12 semistructured expert interviews. The data were analysed using descriptive statistics, chi-square
tests and logistic regression. Those results show that insider-facilitated fraud is responsible
for 61.7% of all bank fraud cases, that forensic accounting technologies can shorten the
time to detect fraud by an average of 42.5% and that banks with forensic units report 35.4%
less in fraud losses than banks without forensic units. The study formulates and
recommends a Forensic Fraud Prevention Model (FFPM), which is a structured model of
the integration of detection, investigation and prevention layers along with institutional
enablers (CBN, NDIC, EFCC, and professional bodies). The study calls for an integrated
monitoring of transactions in real-time with the CBN's fraud reporting system, also
mandatory forensic accounting units in all the DMBs and strengthen whistle blowers’
protection.