A study and analysis on the role of legal accounting in fraud detection and prevention


  • Fatemeh Emani 1.Master of Accounting, Faculty of Literature and Humanities, Islamic Azad University, Khorramabad Branch, Lorestan, Iran,




Forensic Accounting Services; Fraud; Fraud Prevention


Forensic accountants are CPAs that look for evidence of crimes and commonly work for insurance companies, financial institutions, and law enforcement agencies. Forensic accountants analyze financial records and accounts that may be used as legal evidence and often testify in court cases as expert witnesses. Forensic accounting is a specialized area of accounting and a challenging one. A forensic accountant investigates incidents of fraud, bribery, money laundering and embezzlement by analyzing financial records and transactions, tracing assets, and more. This study on forensic accounting services and fraud prevention was empirically investigated. The study is vital as it portrays the extent to which the application of forensic accounting services influence the incidence of fraud in health care firms in Nigeria. Two hypotheses were formulated to guide the investigation and the statistical test of parameter estimates was conducted using Kendall’s Coefficient of Concordance. The study anchored on the White Collar Crime Theory adopted a Survey Design Approach. Hence, data were collected using questionnaire survey administered to the relevant accounting sections of health care firms in Nigeria. The empirical analysis of the study indicates that the application of forensic accounting service has reduced the incidence of frauds and has also led to fraud prevention at 1% significant level. Thus, the study concludes that the application of forensic accounting services prevents fraud in health care firms in Nigeria. In lieu of this, the study recommended that adequate internal control system should also be established to have checks and balances among the staff to reduce fraud to its nearest minimum, thereby, restoring confidence to potential and prospective investors. Also, since staff of health care firms in Nigeria are strategic in prevention of fraud, their remunerations and welfare should be made a priority and taken serious. Also, training and re-training of these staff would encourage them to detect early warning signals for fraud activities in the company.


Adebisi, J., & Gbegi, D. (2015). Fraud and the Nigerian public sector performance. The need for forensic accounting. Internal Journal of Business, Humanities and Technology, 5(5), 67-78

Adesina, K., Erin, O., Ajetunmobi, O., Ilogho, S., Asiriuwa, O. (2020). Does forensic audit fraud control; Evidence from Nigeria deposit money banks. Bank and Bank System, 15(2), 214-229

Akintoye, I. R. (2008). The basics of environmental and forensic accounting, Lagos: Unique Educational Publishers.

Arokiasamy, L., & Cristal-Lee, S. (2009). Forensic accounting: Public acceptance towards occurrence of fraud detection. International Journal of Business and Management, 4(11), 145-160.

Ayanwu, J. C. (1993). Monetary economics: Theory, policy and institution. Onitsha: Hybrid.

Davia, H. R. (2000). Fraud 101: Techniques and strategies for detection. New York, NY: John Wiley and Sons, Inc.

Davis, C., Farrell, R., & Ogilby, S. (2009). Characteristics and skills of the forensic accountant. AICPA FVS Section.

DiGabriele, J. A. (2008). An empirical investigation of relevant skills of forensic accountants. Journal of Education for Business, 83(6), 331-338.

Effiong, E. J. (2012). Forensic accountant education: An exploration of level of awareness in developing economies - Nigeria, as a case study. International Journal of Business and Management, 7(4), 27 - 34.

Elias, A. I. (2014). The use of forensic in fraud detection and control. International Journal of Research in Management, 4(5), 61-71.

Enofe, A. O., Omagbon, P. & Ehigiator, F. I. (2015). Forensic Audit And Corporate Fraud. International Journal of Economics and Business Management IIARD, 1 (7), 1 - 10.

Fredrichs, K. (2007). Extract from practices bureau in investigation, (FBI) publishers

Gates, T., & Jacob, K. (2009). Payments fraud: perception versus reality – a conference summary, Economic Perspectives, 33(1), 7-15

Gbegi, D., & Okoye, E. I. (2013). Forensic Accounting: A Tool for Fraud Detection and Prevention in the Public Sector. (A Study of Selected Ministries in Kogi State). International Journal of Academic Research in Business and Social Sciences, 3 (3), 1 - 19.

Gray, O. R., & Moussalli, S. D. (2006). Forensic accounting and auditing united again: A historical perspective. Journal of Business Issues, 4(2), 15-25.

Hopwood, W., Young, G., & Leiner, J. (2013). Forensic accounting and fraud examination, New York: McGraw Hill.

Ibanichuka, E., Ejimofor, L., & Okwu, P. (2020). Forensic accounting and quality financial reporting of quoted banks in Nigeria. International Journal of Innovative Finance and Economics Research, 8(3), 77-91

IFAC (2006). International Accounting Education Standard Board (IES 8, 2006).Competence Requirements for Audit Professionals. International Federation of Accountants.

Kolawole, K., Salman, R., Durodola, S., Babatunde, D., & Igbekoyi, E. (2018). Determinants of forensic accounting and its effect on alleviation of fraud practices in Nigerian deposit money banks. Journal of Sustainable Development in Africa, 20(1), 331-342

Mukuro, D., Yamusa, O., & Faboyede, S. (2013). The role of forensic accountants in fraud detection and national security in Nigeria. Change and Leadership, 17(2), 90-106.

Nwaiwu, N., & Aaron, F. (2018). Forensic accounting and quality assurance on financial reporting of public sector in Nigeria. International Journal of Advanced Academic Research in Social and Management Sciences, 4(3), 127-146

Nwaze, D. (2012). Due process and accountability: Advance fee fraud, Zenith Economic Quarterly, 8(2), 24-28

Ogutu, G. & Ngahu, S. (2016). Application of forensic auditing skills in fraud mitigation: a survey of accounting firms in the county government of Nakuru, Kenya. IOSR Journal of Business and Management, 18(4), 73-79.

Okoye, E. I., Nwoye, U. J., Akuchi, B. N. & Onyema, A. C. (2020). Effect of forensic investigation techniques in detecting occupational fraud in the public sector: A study of Ministry of Finance, Anambra State, International Journal of Innovative Finance and Economics Research, 8(1), 117-124.

Olajide, D. S. (2014). Forensic Accounting Technique: A means of successful eradication of corruption through fraud prevention, bribery prevention and embezzlement prevention in Nigeria. Kuwait Chapter of Arabian Journal of Business and Management Review, 4 (1), 176 - 186.

Owojori, A. A., & Asaolu, T. O. (2009). The role of forensic accounting in solving the vexed problem of corporate world. European Journal of Scientific Research, 29(2), 1450-216

Ozkul, F. U., & Pamukc¸ A. (2012). Fraud detection and Forensic Accounting, Istanbul, Turkey.

Popoola, O. M. J., Che-Ahmad, A., Samsudin, R. S., Rushami, Z. Y. (2013), Impact of task performance fraud risk assessment on forensic skills and mindsets: Experience from Nigeria. International Journal of Business and Social Sciences, 5(9), 216-224.

Rosen, L. S. (2006a). CAP forum on forensic accounting in the post-enron world forensic accounting: Where and when headed? Canadian Accounting Perspectives, 5 (2), 257-264.

Sidharta, E.A. & Fitriyah, F.K. (2015). Forensic accounting and fraud prevention in Indonesia public sector. International Journal of Business and Management, 4(1), 123-131.

Silverstone, H, & Sheetz, M. (2007). Forensic accounting and fraud investigation for non-expert. New York: Wiley

Singleton, T. W., Singleton, A. J., Bologna, G. J. & Lindquist. R. J. (2006). Fraud Auditing and Forensic Accounting (3rd Ed). Hoboken, NJ: John Wiley and Sons, Inc.

Uniamiogbo, E., Adeusi, A., & Amu, C. (2019). Forensic audit and fraud detection and prevention in the Nigerian banking sector. Accounting and Taxation Review, 3(3), 121-139

Wuerges, A. (2011). Auditors’ responsibility for fraud detection: New wine in old bottles? Available at: http://www.scribd.com/doc/63671899/Auditors-Responsibility-for-Fraud-Detection

Zhiwei, F., Lainhart, J., Stabbs, A. (2014). Manage what is known and what is not known: A road map to managing enterprise fraud risk. ISACA Journal, 5, 39-49.



How to Cite

Emani, F. (2023). A study and analysis on the role of legal accounting in fraud detection and prevention. International Journal of Applied Research in Management, Economics and Accounting, 1(1), 31–40. https://doi.org/10.63053/ijmea.4