Olayinka Erin

This study examines the importance of the application of forensic audit in controlling financial frauds that ravage or threaten the soundness and business continuity of Deposit Money Banks (DMBs) in Nigeria. The study used survey design methods, and the primary data were obtained through the administration of structured questionnaire covering seventeen (17) banks out of twenty-two (22) Deposit Money Banks (DMBs) operating in the country, which is 77.3%. In this study, the Ordinary Least Squares (OLS) method was used to analyze and test hypotheses, and the findings showed that the involvement of qualified and experienced forensic auditors would not only contribute to the amelioration of financial frauds in DMBs, but would also lead to much-needed sanity in the banking sector of Nigeria. The study recommends that regulatory agencies, within the limits prescribed by law, mandate all the banks to create a special forensic department, managed by a professional forensic auditor, which will develop and constantly implement effective and efficient internal control, timely prosecution of fraudsters by considering them to be criminals and as a deterrent to others, and work out adequate training and development programs for their staff, especially in fraud control, in order to reduce the number of fraud cases in Nigerian banks.

Regulation and regulatory agencies are to serve as external control mechanisms to ensure that the financial statements provide a fair view of the company’s operating performance and financial position, free of any unethical practice and suitable for all stakeholders’ needs. Despite the increasing importance of regulatory agencies in enforcing compliance with the standards and laws, it occupies a limited space in accounting research. This study, therefore, investigated the impact of regulatory agencies on creative accounting practices. The study used descriptive and survey research design to achieve its aim. It employed a multi-stage sampling technique, also questionnaires were distributed among 405 respondents consisting of preparers of accounts, users of accounts, and regulators. Out of the number distributed, the respondents returned 241 copies, and all of them were found suitable. The study used Ordinary Least Squares (OLS) to analyze the data and test the hypothesis. The empirical findings showed that the regulatory agencies jointly show a significant impact on creative accounting practices, but the level of contribution to the overall impact by each regulatory agency varies. The study concludes that Nigeria’s regulatory agencies are weak and inefficient in enforcing compliance with the relevant rules. The study recommends that the institutional capacity of the regulatory agencies should be strengthened by enforcing compliance with financial reporting rules and regulation. Most of these agencies should develop capacity in the areas of manpower, information technology infrastructures, and funding.

Acknowledgment
The authors acknowledge Covenant University who has solely provided the platform for this research and has also fully sponsored the research cluster search for data across the country.