Forensic Accounting and Fraud Prevention in Owner-Managed Small and Medium Enterprises (SMEs) in Ogun State, Nigeria

Abstract

This study examined forensic accounting at fraud prevention in small and medium enterprises (SMEs) with emphasis on owner – managed entities. The study adopted a cross-sectional research design, a type of observational study designed with questionnaire administered on administered on selected 165 respondents (middle and senior level staff of Accounting, Finance, Logistics, and Human Resources) in 26 selected small and medium enterprises managed by the owners/family members in Abeokuta metropolis of Ogun State, Nigeria. Simple percentage and frequency tables were used to analyse the distribution of responses and data analysed through descriptive statistics and One Sample T-Test using IBM’s SPSS Statistics 22 to test for the hypothesis formulated in the study. The findings revealed that the application of forensic accounting, with appreciable progress in the developed world, but limited appreciation and usage in emerging economies will prevent fraud in Nigeria SMEs. The understanding of entrepreneurs’ owner-managers and their adoption of forensic accounting practices beyond the traditional auditing and investigation come to the fore. The study thus concluded that the adoption and application of forensic accounting by SMEs will greatly assist in the prevention and detection of fraud in this engine of economic growth. It therefore recommended that right attitude of SMEs owner managers, well defined business processes, controls and enhanced training on forensic accounting by academic, professional bodies and organizations is highly essential in preventing fraud not only in SMEs but in the private with no exception of the public sector.