Corruption, Financial Statement Fraud, and Business Failure in Nigeria

Abstract

This research paper investigated the role of corruption and financial statement fraud in business failure in Nigeria. Data for the study was collected through the issuance of a structured questionnaire to professional accountants and auditors and analyzed using descriptive statistics and the OLS method of multiple regression analyses. The results of the analyses showed a positive relationship between the prevalence of corruption and the phenomenon of business failure as well as a positive relationship between financial statement fraud and business failure in Nigeria. From the findings, it was concluded that corruption increases the risk of business failure by causing an increase in the cost of doing business. It was also deduced that the menace of financial statement fraud significantly increases the risk of business failure. Thus, a reduction in institutional corruption will have a considerable effect on the ability of businesses to survive and thrive. It is recommended that the government take serious measures to curb the problem of corruption to guarantee safe economic environment for businesses to navigate. It is also recommended that regulators take proactive measures to reduce the incidences of financial statement fraud perpetrated in the country.