The Role of Forensic Accounting in Fraud Detection in Nigerian Public Institutions: A Case Study of Lagos State Government
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Background of the Study
Fraud has become a pervasive issue in public institutions, undermining governance, public trust, and economic development. In Nigeria, public institutions have been plagued by financial mismanagement, corruption, and embezzlement, with billions of naira lost annually due to fraudulent practices (Adeyemi & Kolawole, 2023). As traditional audit techniques often fail to uncover sophisticated fraud schemes, forensic accounting has emerged as a critical tool for detecting and preventing financial crimes in public institutions (Okoro & Eze, 2024).
Forensic accounting involves the integration of accounting, auditing, and investigative skills to uncover fraud and irregularities. In Lagos State, being Nigeria’s economic hub, public institutions are particularly vulnerable due to the high volume of transactions and the complexity of operations. The Lagos State Government has implemented several measures, including engaging forensic accountants, to combat fraud and enhance financial transparency (Adekoya & Omotosho, 2025).
This study explores the role of forensic accounting in detecting fraud in Lagos State public institutions, focusing on its effectiveness, challenges, and impact on governance.
Statement of the Problem
Despite efforts to improve financial management, fraud continues to pose significant challenges to Nigerian public institutions. Traditional audits often fail to uncover fraudulent activities due to collusion, manipulation, and systemic weaknesses (Olumide & Lawal, 2024). Although forensic accounting has proven effective in combating fraud globally, its adoption in Nigeria is limited, particularly in public institutions.
In Lagos State, instances of financial fraud persist despite deploying forensic accounting techniques. Challenges such as inadequate resources, lack of expertise, and resistance to change hinder its effectiveness. This study addresses the gap in understanding how forensic accounting can be better utilized to detect and prevent fraud in Nigerian public institutions, with Lagos State Government as a case study.
Objectives of the Study
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To assess the effectiveness of forensic accounting in detecting fraud in Lagos State public institutions.
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To identify challenges faced in implementing forensic accounting in fraud detection.
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To evaluate the impact of forensic accounting on governance and financial transparency in Lagos State.
Research Questions
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How effective is forensic accounting in detecting fraud in Lagos State public institutions?
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What challenges hinder the implementation of forensic accounting in fraud detection?
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What impact does forensic accounting have on governance and financial transparency in Lagos State?
Research Hypotheses
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Forensic accounting is not significantly effective in detecting fraud in Lagos State public institutions.
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Challenges faced in implementing forensic accounting do not significantly affect fraud detection.
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Forensic accounting does not significantly impact governance and financial transparency in Lagos State.
Scope and Limitations of the Study
The study focuses on the role of forensic accounting in fraud detection within Lagos State public institutions from 2015 to 2024. It examines its implementation, challenges, and outcomes. Limitations include reliance on secondary data and potential difficulties in accessing sensitive information related to fraud cases.
Definitions of Terms
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Forensic Accounting: The use of accounting, auditing, and investigative skills to examine financial statements for fraud or other criminal activity.
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Fraud Detection: The process of identifying and uncovering fraudulent activities within an organization.
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Governance: The structures, processes, and policies that ensure accountability and transparency in public administration.
