Financial Fraud Case Study

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Recommended: Forensic accounting

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. …show more content…

The management of a business must make sure that the financial statement and disclosures are adequate according to the financial reporting standards and that all disclosures are truthful. It is the responsibility of management to detect fraud in the course of preparing the financial statements. In carrying out this function, management set in place systems to help prevent and detect fraud. Auditors are appointed to audit the financial statement of companies.
By the Companies and Allied Matters Acts 1990(CAMA), the primary function of an auditor is to audit the financial statements of the company and form an opinion as to whether a) proper accounting records have been kept by the company and b) the company’s balance sheet and profit and loss account are in agreement with the accounting records and returns provided to the auditor by the company. The True and Fair view opinion by auditors on the financial statements of companies gives credibility to such reports. This have a way of convincing the users of such information that the financial statements can be relied …show more content…

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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