FORENSIC ACCOUNTING AND LITIGATION SUPPORT FOR CORRUPTION CASES IN NIGERIA
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Abstract
Tis study was carried out to examine forensic accounting and litigation support for corruption cases in Nigeria. One of the issues mostly discussed in Nigeria today is about corruption. Almost every section of the country is affected by corruption ranging from education sector to the various organs of government. In the corporate world, many businesses have collapsed due to mismanagement by the corrupt directors appointed to manage them. This study examined the need for application of forensic accounting technique to successfully investigate and detect cases of corruption in Nigeria. Survey research design has been employed in this study. This research design was chosen because it ensures that reliable empirical data is obtained to test the relationship that exist between the dependent and independent variables in order to achieve the research objective and test the hypothesis formulated. The result of the regression analysis, the p-value (0.142) associated with the coefficient of β0 is greater than 0.05 level of significance; R² of 0.129 has low explanatory power on the dependent variable (corruption prevention), and the F calculated of 1.920 is less than the F tabulated of 4.08, hence the Null hypothesis (Ho) (Fraud prevention, bribery prevention and embezzlement prevention will not significantly ensure effective prevention of corruption through the application of forensic accounting technique) is therefore accepted.
This study has been able to establish the need for application of forensic accounting technique to investigate and detect cases of corruption in Nigeria. The court system that usually causes delays in the trial of accused persons needs to be strengthened, to ensure the success of the efforts of EFCC. There is no forensic accounting unit in EFCC, and the professional firms that have forensic expertise are not consulted to carry out proper investigation of corrupt cases.
It is recommended that EFCC should set up a forensic accounting unit where trained expert should be employed to carry out investigation. Forensic accounting experts from the professional accounting firms should be retained by EFCC to carry out investigations
CHAPTER ONE
INTRODUCTION
- Background of study
Corruption seems to be the most popular issue discussed as a cause of underdevelopment in Nigeria today. Almost every section of the country is affected by corruption ranging from education sector to the various organs of government. In the corporate world, many businesses have collapsed due to mismanagement by the corrupt directors appointed to manage them. Corrupt practices are reported in the area of pensions, salaries and wages, in legislative process as well as other areas of government business. It undermines good government, fundamentally distorts public policy, leads to the misappropriation of resources, harms the public sector and private sector development, and particularly it hurts the poor. To combat the menace, many tribunals, probe panels and anti corruption institutions had been set up to reduce corruption, but it appears they lacked investigative skills that will ensure successful prosecution of persons accused of corrupt practices. There is therefore the need to adopt effective investigation technique that will assist the anticorruption institutions to successfully reduce corruption. Corruption is seen as the abuse of entrusted power for private gain (Golden, Skalak, and Clayton, 2006). Corruption is the largest single inhibitor of equitable economic development in many countries of the world including Nigeria. It is a form of behaviour, which includes conflict of interest, embezzlement, fraud, bribery, political corruption and extortion (Onakuse, 2004). According to Mazumder (2011), the law enforcement personnel in recent years have become more aware of white-collar crimes, they however have lacked the training and expertise in combating such crimes.
Despite the establishment of anti corruption agencies, cases of corrupt practices both in the public and private sectors appear to be on the increase and it seems difficult for anti corruption agencies to successfully prosecute many of the alleged cases of corruption involving billions of naira by government functionaries, contractors, as well as private individuals and organizations. Before the establishment of the Economic and Financial Crimes Commission (EFCC) and Independent Corrupt Practices Commission (ICPC), successive governments had been handling cases of corruption by setting up special military tribunals, banks and miscellaneous offences tribunal, Okigbo panel, as well as many other ad hoc bodies. None of such efforts seem to have yielded results (Adegbie and Fakile, 2012). The Obasanjo administration set up EFCC and ICPC as the institutions that were to be on standing basis.
There are, seemingly, inadequate competent professionals to handle cases of corruption as alluded to by Ribadu (2006) and the judicial system in Nigeria is slow leading to delay in the prosecution process. The immediate past chairman of EFCC, Waziri, (2011) complained of unnecessary delay by the judiciary in prosecuting persons accused of corruption. For the court to be able to deliver judgments without delay, investigation must be thorough. EFCC must therefore ensure that competent personnel handle investigation on corruption and other financial crimes. This is where the expertise of forensic accountants is required hence this study examined the need for application of forensic accounting technique to successfully investigate and detect cases of corruption in Nigeria since it was successfully employed by the Central Bank of Nigeria and Securities and Exchange Commission in 2009 and 2011 respectively.
Following this background the the objective of this study was to determine how forensic accounting can act as litigation support for the eradication corruption through fraud prevention, bribery prevention and embezzlement prevention.
1.2 Statement of the Problem
Despite the establishment of anti corruption agencies, cases of corrupt practices both in the public and private sectors appear to be on the increase and it seems difficult for anti corruption agencies to successfully prosecute many of the alleged cases of corruption involving billions of naira by government functionaries, contractors, as well as private individuals and organizations. Before the establishment of the Economic and Financial Crimes Commission (EFCC) and Independent Corrupt Practices Commission (ICPC), successive governments had been handling cases of corruption by setting up special military tribunals, banks and miscellaneous offences tribunal, Okigbo panel, as well as many other ad hoc bodies. None of such efforts seem to have yielded results (Adegbie and Fakile, 2012). The Obasanjo administration set up EFCC and ICPC as the institutions that were to be on standing basis.
There are, seemingly, inadequate competent professionals to handle cases of corruption as alluded to by Ribadu (2006) and the judicial system in Nigeria is slow leading to delay in the prosecution process. The immediate past chairman of EFCC, Waziri, (2011) complained of unnecessary delay by the judiciary in prosecuting persons accused of corruption. For the court to be able to deliver judgments without delay, investigation must be thorough. EFCC must therefore ensure that competent personnel handle investigation on corruption and other financial crimes. This is where the expertise of forensic accountants is required hence this study examined the need for application of forensic accounting technique to successfully investigate and detect cases of corruption in Nigeria since it was successfully employed by the Central Bank of Nigeria and Securities and Exchange Commission in 2009 and 2011 respectively.
1.3 Objectives of the Study
The objective of this study was to determine how corruption can be eradicated through fraud prevention, bribery prevention and embezzlement prevention with the application of forensic accounting technique in Nigeria.
1.4 Statement of Hypothesis
Fraud prevention, bribery prevention and embezzlement prevention will not significantly ensure effective eradication of corruption through the application of forensic accounting technique.
1.5 Significance of study
The EFCC and the Nigerian government at large will benefit since the study findings can be factored when decisions to prevent and detect fraud are made by the commission. The EFCC will therefore be more equipped in understanding how they can practically employ forensic accounting practices in fraud detection and prevention.
1.6 Operationalization of the variables
From the hypothesis stated above, the functional relationships of the variables are as follows: Y = f(X)
Where:
Y = Application of forensic accounting X = Eradication of Corruption
X = f (x1, x2, x3) Where:
x1 = Fraud prevention x2 = Bribery prevention
x3 = Embezzlement prevention Therefore
Y = f (x1, x2, x3)———— (i)
This equation (i) was investigated in this study.
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