Forensic accounting skills and tax evasion detection in Lagos State, Nigeria

Asaolu Taiwo O, ,Akinkoye Ebenezer Y,Akinadewo Israel S

doi:10.24052/ijbed/v08n02/art-06

Abstract

The study investigated the application of Forensic Accounting Skills on Tax Evasion Detection in Lagos State, Nigeria. Data were sourced with the aid of structured questionnaire administered on respondents. The sample size was 301 comprising forensic accountants and Lagos State Internal Revenue officials. Multiple regression analysis results show a positive nexus between Forensic Accounting skills and tax evasion detection as the t-calculated (4.579) is greater than the t-tabulated (0.000) at 5% significance level. The forensic accounting skills proxied by Detection, Prevention, Deterrence Skills (DPDS); Forensic Audit, Investigation, Interviewing Skills (FAIIS); Arbitration, Mediation, Litigation Skills (AMLS); Honesty, High Integrity, Communication Skills (HHICS) indicated by the individual level of significance of 0.000, 0.054, 0.054 and 0.122 respectively which are less than 5% acceptable level of significance also shows that there is a significant positive relationship in the effect of forensic accounting on tax evasion detection. The finding indicates the existence of tax evasion and that the application of forensic accounting will drastically lead to the reduction. This will enhance government’s accessibility to more revenue in meeting up with its constitutional responsibilities. The study recommends among others of the need for the government to institutionalize forensic accounting in the country for effective tax administration.

Highlights

Governments derive their revenue from various sources including taxes
Conceptual Framework The conceptual framework of this study gives the direction to explain the nexus between the components of the independent variable and the dependent variable as detailed below: TED = Tax Evasion Detection = Dependent Variable FA = Forensic Accounting = Independent Variable The independent variable is proxied by: DPDS = Detection, Prevention and Deterrence Skills FAIIS = Forensic Audit, Investigation, and Interviewing Skills AMLS = Arbitration, Mediation and Litigation Skills HHICS = Honesty, High Integrity and Communication Skills These components were adopted from Oyedokun, Enyi and Dada (2018), with little modification
This implies the existence of a significant positive relationship in the effect of Forensic Accounting on tax Evasion Detection in Lagos State

Summary

Introduction

Governments derive their revenue from various sources including taxes. the revenue of the respective government will be improved upon if the eligible taxpayers comply significantly with tax policies. Governments in Nigeria, especially the state governments, have had their revenue projections unattainable partly through tax evasion (Akinadewo, Akinkoye, Oyedokun & Asaolu, 2019; Folayan & Adeniyi, 2018) Due to this concern, the respective state governments have intensified more efforts in tackling the problems of tax evasion. In Nigeria, studies have been carried out on the impact of forensic accounting on the integrity of financial statements, on fraud detection in the banking sector, and on the detection and management of fraud, among others, with few literatures on tax evasion from the exclusive revenue of state governments (Akinadewo & Akinkoye, 2019; Oyedokun & Enyi, 2018; Enofe, Okpako & Atube, 2013; Bassey, 2018). The study will want to look at the link between forensic accounting and tax evasion detection, with the use of different components for forensic accounting to represent the independent variable

Literature review Tax Evasion and Tax Compliance Enforcement

Discussion

Findings

Standardized Coefficients