The Effect of Forensic Investigation on Financial Crime in Nigeria Economy
Vol.6 Issue 2
This study is aimed at investigating the relationship between Forensic Audit and Financial Crimes in the Nigerian Economy. The ex post facto research design was adopted. Time series data on different variables of Forensic Audit and Financial Crime spanning from 2016-2020 with a sample of twenty (20) observations made on quarterly basis from secondary sources were collected from the Economic and Financial Crime Commission website, the data were analyzed descriptively with mean, standard deviation, minimum and maximum values, skewness and Kurtosis. The robustness test of the variables was conducted on stationarity, co-integration, error correction model, autocorrelation, and Granger causality with Augmented Dickey Fuller (ADF) model. In testing the hypotheses of the study, the Auto-Regressive Distributed Lag (ARDL) regression technique was applied. The empirical results indicate that Forensic Audit significantly relate to Financial crime; explaining about 65.0% and 73.0% of variation in assets misappropriation and money laundry respectively. Whistle blowing, expert witnessing and forensic investigation were each found to significantly relate to financial crime. Information and communication technology training does not significantly moderate forensic audit and financial crime in Nigeria. The study therefore conclude that forensic audit has the potency to significantly mitigate the incidences of financial crime in Nigeria. It is recommended that forensic auditors of corporate bodies should work closely with the anti-graft agencies (EFCC, ICPC etc.) and provide them with all relevant information that would enhance the fight against assets misappropriation. Further, government should enact and implement effective legislation for the protection of whistle blowers in Nigeria. Forensic auditors who carries out forensic investigation of financial crimes should be well remunerated by their employers and regular Information and Communication Technology training should be organized for forensic auditors to enhance their skills in fighting financial crime in Nigeria.; there should be a statutory requirement for forensic auditor to certify financial statements and external auditors’ reports of both public and private sectors organizations to promote transparency and accountability; and Section 14(2) of the Economic and Financial Crime Commission (EFCC), which provide for an option of plea bargaining should be repealed. The biblical injunction of Exodus 22:7, which commands that criminals should pay double of the amount stolen should be invoked.
