PERCEIVED ROLE OF FORENSIC AUDIT IN FRAUD DETECTION IN DEPOSIT MONEY BANKS IN NIGERIA

Abstract

The prevalence of fraud in deposit money banks in Nigeria has reached an overwhelming crescendo, with far-reaching consequences; hence, the need to curb the tempo cannot be overemphasised. This study investigates the perceived role of forensic auditing in enhancing fraud detection within the Nigerian banking sector, with particular focus on selected commercial banks in Lagos State, Nigeria. Specifically, the study examines the relationship between key dimensions of forensic auditing, including litigation support services, arbitration, investigative accounting, and technological integration, and the effectiveness of fraud detection mechanisms. A cross-sectional research design was adopted, employing a quantitative approach to generate and analyse data. The target population comprised commercial banks operating within Lagos State. Using a convenience sampling technique, five banks, namely, First Bank of Nigeria Ltd., Guaranty Trust Bank Ltd., Zenith Bank Plc., Access Bank Plc., and Wema Bank Plc., were selected for the study. Primary data were collected through a structured questionnaire administered to relevant respondents. To ensure the reliability of the research instrument, Cronbach’s Alpha was utilised, with results indicating a high level of internal consistency. The findings indicate a significant positive relationship between forensic auditing practices and respondents' perceptions of fraud detection effectiveness in Deposit Money Banks. Based on these findings, the study recommends the institutionalisation of dedicated forensic audit units within banking institutions. Such units should operate with a degree of independence to effectively manage and investigate fraud-related cases, thereby strengthening internal control systems and enhancing overall financial integrity.