THE EFFECT OF FORENSIC ACCOUNTING ON BANK PERFORMANCE

Abstract

This study investigated the effects of forensic accounting on bank performance in Nigeria using four (4) measures of forensic accounting (money laundering fraud control, point of sales, money transfer fraud and automated teller machine fraud control) and one (1) performance measure (return on asset). Data were obtained from the annual reports and accounts of the banks and Central Bank of Nigeria Statistical Bulletin from 2012-2020. Data obtained were analyzed using descriptive statistics (mean, standard deviation, skewness, kurtosis and correlation) and inferential statistics (variance inflation factor and ordinary least square). Findings of the study showed that all the forensic accounting measures of the study (money laundering fraud, point of sales, money transfer fraud and automated teller machine fraud controls) negatively and significantly affected performance of banks in Nigeria. Based on the findings, it was recommended among others that bank management should employ forensic accounting by amending the existing statutes in such a way that forensic accountants are included in the management process. Through this, forensic accountants will have more tools to effectively deal with challenges in fraud control. Also, the negative relationship between forensic accounting and performance of banks suggests that it has not been effectively used by management; thus, there is need for Nigerian banks to further enhance and employ forensic accounting support services, fraud investigation and forensic audit by ensuring that they achieve what they intend to do for banks
 Keywords: Forensic Accounting, Bank, Performance, Nigeria.