Effects Of Forensic Accounting

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Financial fraud have increased considerably over the years and it is likely to continue if not adequately dealt with. The Association of Certified Fraud Examiners (ACFE) “2012 Report to the Nation” is one study that describes the losses that an entity may experience as a result of fraud; A typical organization losses approximately 5 percent of its annual revenue to fraudulent acts. The cost of fraud to business and public can only be estimated as many crimes go unreported.
Fraud can have substantial impact on a business no matter what size it is. Damages done to business organizations can be enormous ranging from financial loss, problem of public trust in the organization, shattering the company’s culture and morale and increase in audit costs.
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George A. Manning in his book “Financial Investigation and Forensic Accounting” defines Forensic Accounting as the science of gathering and presenting financial information in a form that will be accepted by a court of jurisprudence against perpetrators of financial and or economic crimes. Okoye and Akamobi (2009) commented that forensic accounting is the practice of utilizing accounting, auditing and investigative skills to assist in legal matters. Forensic accounting is a new and rapidly growing area of accounting(especially in Nigeria) and is concerned with the detection and prevention of financial fraud and white-collar crimes.
Forensic accounting is said to bring significant improvement in the quality of fraud detection and prevention. Forensic accounting should be accountable for digging out frauds committed through application of auditing, accounting and investigative skills in order to come up with enough evidence that can be used in court proceedings(Albrecht et al,
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Financial reports as stated in IGBEN(1999), are meant to be a formal record of business activities and these reports are meant to provide an overview of the financial position and profitability in both short and long term of companies to the users of these financial statements, but in recent times; the financial manipulations, weak control system and other fraudulent activities that occur within companies creates a negative goodwill to the general public.
The impact of financial fraud in business organizations cannot be overemphasized. It has led many companies to liquidation and some to stagnation. It is against this landscape that the following questions will be raised:
Can forensic accounting minimize fraud in Nigeria companies?
Does forensic accounting increase the credibility of financial statements?
Do forensic accountants have a role in a business

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