An Evaluation of Forensic Auditing Techniques in Investigating Fraudulent Financial Reporting: A Study of Oando Plc
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Background of the Study
Financial reporting fraud has been a significant issue for corporations around the world, including in Nigeria, where the quality of financial disclosures is often called into question. Oando Plc, one of Nigeria’s largest integrated energy companies, faced a highly publicized case of financial reporting fraud in recent years, which drew attention to the need for stronger forensic auditing practices. Financial reporting fraud involves the intentional misrepresentation of financial data to mislead stakeholders, inflate performance metrics, or manipulate stock prices. These fraudulent activities can have severe consequences, including loss of investor confidence, legal action, and financial penalties (Chukwuma & Ogbonna, 2024).
Forensic auditing is crucial in identifying and addressing fraudulent financial reporting, as it involves the application of advanced techniques such as forensic analysis of financial statements, data mining, and the use of technology to detect discrepancies in reporting. Forensic auditors focus on tracing financial transactions, investigating accounting anomalies, and uncovering fraudulent schemes. The Oando Plc case serves as a valuable example of how forensic auditing techniques can be employed to investigate and address financial reporting fraud. However, the effectiveness of these techniques in preventing or mitigating such fraud in Nigerian corporations remains an area of ongoing research. This study aims to evaluate the forensic auditing techniques used in the investigation of financial reporting fraud at Oando Plc.
Statement of the Problem
Oando Plc’s experience with fraudulent financial reporting highlighted significant weaknesses in financial oversight, governance, and internal controls within the organization. While forensic auditing was employed to investigate the financial discrepancies, questions remain about the adequacy of the forensic auditing techniques used and whether they were sufficient to uncover all fraudulent activities before they escalated. This study seeks to evaluate the effectiveness of forensic auditing techniques in identifying fraudulent financial reporting and the challenges involved in investigating such fraud within large Nigerian corporations.
Objectives of the Study
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To evaluate the forensic auditing techniques used in investigating fraudulent financial reporting at Oando Plc.
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To assess the effectiveness of these forensic auditing techniques in identifying discrepancies and preventing financial reporting fraud.
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To identify the challenges faced in applying forensic auditing techniques in detecting financial fraud at Oando Plc.
Research Questions
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What forensic auditing techniques were used to investigate fraudulent financial reporting at Oando Plc?
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How effective were these forensic auditing techniques in identifying fraudulent activities at Oando Plc?
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What challenges were encountered in applying forensic auditing techniques to uncover financial reporting fraud at Oando Plc?
Research Hypotheses
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Forensic auditing techniques are effective in investigating fraudulent financial reporting at Oando Plc.
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The use of forensic auditing techniques significantly improves the detection of financial reporting fraud.
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Forensic auditing faces challenges in fully uncovering financial reporting fraud at Oando Plc.
Scope and Limitations of the Study
This study will focus on forensic auditing techniques used to investigate financial reporting fraud at Oando Plc. It will evaluate the methods employed, the challenges encountered, and the outcomes of the investigation. The study will be limited to cases from 2015 to 2025, with limitations related to the availability of internal audit data and the company’s willingness to share sensitive information.
Definitions of Terms
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Forensic Auditing Techniques: Methods used by forensic auditors to investigate and uncover fraudulent financial activities, including data analysis, forensic accounting, and financial statement reviews.
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Fraudulent Financial Reporting: The deliberate misrepresentation or manipulation of financial statements to deceive stakeholders, inflate performance metrics, or mislead investors.
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Oando Plc: A leading Nigerian energy company involved in oil and gas exploration, production, and marketing.
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