Assessment of the Impact of Board Characteristics on Forensic Accounting Practices of Listed Deposit Money Banks (DMBs) in Nigeria
Keywords:
Board Characteristics, Board Composition, Board Independence, Board Expertise, Forensic Accounting Practices
Abstract
Due to economic uncertainty and stakeholders’ disillusionment, which has prompted calls for better financial system protection, extensive forensic accounting systems are needed. This study came into force to investigate how board characteristics affect forensic accounting practices in listed Nigerian Deposit Money Banks (DMBs). The longitudinal study included fifteen DMBs listed on the Nigerian Exchange Group as of December 31, 2022. The analysis used audited yearly financial records from 2013 to 2022 of these firms. The data was analysed using descriptive statistics and marginal logistic regression. This research found that board composition and competence positively affect forensic accounting adoption. The influence on board independence was positive but statistically negligible. This shows that board composition and expertise are key to forensic accounting practices implementation. This study concludes that board composition and experience help DMBs adopt forensic accounting practices. It was recommended that DMBs should adopt data analytics and AI. Policymakers should establish real-time information exchange methods, and banks should safeguard whistle-blowers and allow anonymous reporting. These methods are essential for improving forensic accounting, detecting fraud quickly, and protecting financial stability and reputation.
References
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Assenga, M. P., Aly, D., & Hussainey, K. (2018). The impact of board characteristics on the financial performance of Tanzanian firms. Corporate Governance: The International Journal of Business in Society, 18(6), 1089–1106. https://doi.org/10.1108/cg-09-2016-0174
Bangura, A. B. (2020). Forensic accounting techniques and fraud prevention in Sierra Leonean DMBs. Asian Journal of Economics, Business and Accounting, 14(2), 20–50. https://doi.org/10.9734/ajeba/2020/v14i230190
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Daghsni, O., Zouhayer, M., & Mbarek, K. B. H. (2016). Earnings Management and Board Characteristics: Evidence From French Listed Firms. Account and Financial Management Journal, 1(2), 92–110. https://everant.org/index.php/afmjh/article/view/258
Di Biase, P., & Onorato, G. (2021). An international empirical survey of board characteristics and financial performance in the insurance industry. Corporate Ownership and Control, 18(3), 8–18. https://doi.org/10.22495/cocv18i3art1
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Farhan, N., Tabash, M., Almaqtari, F., & Yahya, A. (2020). Board composition and firms’ profitability: Empirical evidence from pharmaceutical industry in India. Journal of International Studies, 13(3), 180–194. https://doi.org/10.14254/2071-8330.2020/13-3/12
Freeman, R. E., & McVea, J. (2017). A stakeholder approach to strategic management. The Blackwell Handbook of Strategic Management (pp. 183–201). https://doi.org/https://doi.org/10.1111/b.9780631218616.2006.00007.x
García-Meca, E., & Palacio, C. J. (2018). Board composition and firm reputation: The role of business experts, support specialists and community influentials. BRQ Business Research Quarterly, 21(2), 111–123. https://doi.org/10.1016/j.brq.2018.01.003
Inyada, S. J., Olopade, D. O., & Ugbede, J. (2019). Effect of forensic audit on bank fraud in Nigeria. American International Journal of Contemporary Research, 9(2). https://doi.org/10.30845/aijcr.v9n2p5
Jensen, M. C., & Meckling, W. H. (1976, October 19). Theory of the firm: Managerial Behavior, agency costs and ownership structure. Journal of Financial Economics. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=94043
Mbir, D. E., Agyemang, O. S., Tackie, G., & Abeka, M. J. (2020). IFRS compliance, Corporate Governance, and financial reporting quality of GSE-listed non-financial firms. Cogent Business & Management, 7(1). https://doi.org/10.1080/23311975.2020.1759856
de Moraes, E. A., Ribeiro, F. G., de Carvalho, E., & da Silva, A. M. M. (2022). Disclosure of Social Information and Women on the Board of Directors. Revista De Gestão Social E Ambiental, 16(2), e02989. https://doi.org/10.24857/rgsa.v16n2-014
Moses, T. (2019). Board characteristics, audit committee composition, and financial reporting in Nigeria. International Journal of Innovative Social Sciences & Humanities Research, 7(1), 37–44. https://www.researchgate.net/profile/Temple-Moses/publication/331175190_Board_Characteristics_Audit_Committee_Composition_And_Financial_Reporting_in_Nigeria/links/5c6ac03b299bf1e3a5b0405c/Board-Characteristics-Audit-Committee-Composition-And-Financial-Reporting-in-Nigeria.pdf
Mosuro, F., & Martins-Wakwe, T. (2020). The Nigerian Code of corporate governance 2018: A synopsis. Dentons ACAS-Law. https://www.dentonsacaslaw.com/en/insights/articles/2020/april/15/the-nigerian-code-of-corporate-governance-2018-a-synopsis
Okeke, M. U. (2023). Empirical analysis of foreign ownership, institutional ownership, and modified going concern audit opinion of listed firms in Nigeria. Apex Journal International. https://apexjournal.org/jbamsr/archive/2023/January/fulltext/Okeke.pdf
Okolie, A. O., & Uwejeyan, J. C. (2022). Board characteristics and financial performance of conglomerates in Nigeria. European Journal of Business and Management Research, 7(2), 149–155. https://doi.org/10.24018/ejbmr.2022.7.2.1344
Olofinlade, S. O. (2021). The Role of Forensic Audit on Management Frauds in Nigerian DMBs. International Journal of Accounting, Finance and Risk Management, 6(3), 69. https://doi.org/10.11648/j.ijafrm.20210603.11
Oyedokun, G. E. (2015). Evolution of forensic accounting and its role in Nigeria’s economy. Share and Discover Knowledge on SlideShare. https://www.slideshare.net/godwinoye/evolution-of-forensic-accounting-and-its-role-in-nigeria-economy
Pucheta-Martínez, M. C., & Gallego-Álvarez, I. (2019). Do board characteristics drive firm performance? an international perspective. Review of Managerial Science, 14(6), 1251–1297. https://doi.org/10.1007/s11846-019-00330-x
Raed, K. (2021). The Impact of Board of Directors Characteristics on Firm Performance: A Case Study in Jordan. The Journal of Asian Finance, Economics and Business, 8(3), 341–350. https://doi.org/10.13106/jafeb.2021.vol8.no3.0341
Rehman, A., & Hashim, F. (2020). Can forensic accounting impact sustainable corporate governance? Corporate Governance: The International Journal of Business in Society, 21(1), 212–227. https://doi.org/10.1108/cg-06-2020-0269
Shettima, U., & Dzolkarnaini, N. (2018). Board characteristics and Microfinance Institutions’ performance. Journal of Accounting in Emerging Economies, 8(3), 369–386. https://doi.org/10.1108/jaee-01-2017-0006
Adebisi, A. W., Eko, E. U., Enang, O. P.-D., Etim, U. C., & Wilson, A. (2022). Econometric analysis of the causal link between forensic accounting techniques and fraud prevention in Nigeria. Scholars Journal of Economics, Business and Management, 9(10), 215–226. https://doi.org/10.36347/sjebm.2022.v09i10.002
Agboare, E. I. (2021). Impact of forensic accounting on financial fraud detection in DMBs in Nigeria. African Journal of Accounting and Financial Research, 4(3), 74–119. https://doi.org/10.52589/ajafr-ruc0s0iq
Ahmed, H. A., Abdullahi, B. A., Suleiman, A. B., & Janada, A. (2019). The effect of board characteristics on the financial performance of listed banks in Nigeria. MAUTECH–Nigerian Journal of Accounting and Finance (NIJAF), 10(2), 1–9.
Akinadewo, I. S., & Asaolu, T. O. (2020). Problems of forensic accounting practice in Nigeria: Appraising the mitigating factors. International Journal of Management Studies and Social Science, 2(4), 222-230. https://www.academia.edu/43872919/PROBLEMS_OF_FORENSIC_ACCOUNTING_PRACTICE_IN_NIGERIA_APPRAISING_THE_MITIGATING_FACTORS
Akinadewo, I. S., & Akinkoye, E. Y. (2020). Application of forensic accounting on fraud detection in Nigerian DMBs (dmbs). Review of Socio-Economic Perspectives - RSEP. Https://www.academia.edu/43708261/APPLICATION_OF_FORENSIC_ACCOUNTING_ON_FRAUD_DETECTION_IN_NIGERIAN_DEPOSIT_MONEY_BANKS_dmbs_
Akpokerere, O. E., & Obonofiemro, G. (2022). Board characteristics: Implications on financial performance of DMBs in Nigeria. Finance and Accounting Research Journal, 4(4), 144–161. https://doi.org/10.51594/farj.v4i4.398
Albrecht, W. S., Albrecht, C. O., Albrecht, C. C., & Zimbelman, M. F. (2018). Fraud examination. Amazon. https://www.amazon.com/Fraud-Examination-W-Steve-Albrecht/dp/1337619671
Assenga, M. P., Aly, D., & Hussainey, K. (2018). The impact of board characteristics on the financial performance of Tanzanian firms. Corporate Governance: The International Journal of Business in Society, 18(6), 1089–1106. https://doi.org/10.1108/cg-09-2016-0174
Bangura, A. B. (2020). Forensic accounting techniques and fraud prevention in Sierra Leonean DMBs. Asian Journal of Economics, Business and Accounting, 14(2), 20–50. https://doi.org/10.9734/ajeba/2020/v14i230190
Bhat, S. (2023). The Effectiveness of Internal Controls in Preventing Fraud and Financial Misconduct. Journal of Law and Sustainable Development, 11(5), e1178. https://doi.org/10.55908/sdgs.v11i5.1178
Daghsni, O., Zouhayer, M., & Mbarek, K. B. H. (2016). Earnings Management and Board Characteristics: Evidence From French Listed Firms. Account and Financial Management Journal, 1(2), 92–110. https://everant.org/index.php/afmjh/article/view/258
Di Biase, P., & Onorato, G. (2021). An international empirical survey of board characteristics and financial performance in the insurance industry. Corporate Ownership and Control, 18(3), 8–18. https://doi.org/10.22495/cocv18i3art1
Donaldson, L., & Davis, J. H. (1991). Stewardship theory or agency theory: CEO governance and shareholder returns. Australian Journal of Management, 16(1), 49–64. https://doi.org/10.1177/031289629101600103
Ehiedu, V. C. (2022). Corporate Finance Alternative and Shareholders’ Value Creation in Nigeria. International Journal of Academic Accounting, Finance & Management Research (IJAAFMR), 6(6), 26–33.
Enofe, A. O., Abilogun, T. O., & Omoolorun, A. J. (2017). Bank fraud and preventive measures in Nigeria: An empirical review. International Journal of Academic Research in Business and Social Sciences, 7(7), 40–51. https://doi.org/10.6007/ijarbss/v7-i7/3076
Fama, E. F., & Jensen, M. C. (1983). Separation of ownership and Control. The Journal of Law and Economics, 26(2), 301–325. https://doi.org/10.1086/467037
Farhan, N., Tabash, M., Almaqtari, F., & Yahya, A. (2020). Board composition and firms’ profitability: Empirical evidence from pharmaceutical industry in India. Journal of International Studies, 13(3), 180–194. https://doi.org/10.14254/2071-8330.2020/13-3/12
Freeman, R. E., & McVea, J. (2017). A stakeholder approach to strategic management. The Blackwell Handbook of Strategic Management (pp. 183–201). https://doi.org/https://doi.org/10.1111/b.9780631218616.2006.00007.x
García-Meca, E., & Palacio, C. J. (2018). Board composition and firm reputation: The role of business experts, support specialists and community influentials. BRQ Business Research Quarterly, 21(2), 111–123. https://doi.org/10.1016/j.brq.2018.01.003
Inyada, S. J., Olopade, D. O., & Ugbede, J. (2019). Effect of forensic audit on bank fraud in Nigeria. American International Journal of Contemporary Research, 9(2). https://doi.org/10.30845/aijcr.v9n2p5
Jensen, M. C., & Meckling, W. H. (1976, October 19). Theory of the firm: Managerial Behavior, agency costs and ownership structure. Journal of Financial Economics. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=94043
Mbir, D. E., Agyemang, O. S., Tackie, G., & Abeka, M. J. (2020). IFRS compliance, Corporate Governance, and financial reporting quality of GSE-listed non-financial firms. Cogent Business & Management, 7(1). https://doi.org/10.1080/23311975.2020.1759856
de Moraes, E. A., Ribeiro, F. G., de Carvalho, E., & da Silva, A. M. M. (2022). Disclosure of Social Information and Women on the Board of Directors. Revista De Gestão Social E Ambiental, 16(2), e02989. https://doi.org/10.24857/rgsa.v16n2-014
Moses, T. (2019). Board characteristics, audit committee composition, and financial reporting in Nigeria. International Journal of Innovative Social Sciences & Humanities Research, 7(1), 37–44. https://www.researchgate.net/profile/Temple-Moses/publication/331175190_Board_Characteristics_Audit_Committee_Composition_And_Financial_Reporting_in_Nigeria/links/5c6ac03b299bf1e3a5b0405c/Board-Characteristics-Audit-Committee-Composition-And-Financial-Reporting-in-Nigeria.pdf
Mosuro, F., & Martins-Wakwe, T. (2020). The Nigerian Code of corporate governance 2018: A synopsis. Dentons ACAS-Law. https://www.dentonsacaslaw.com/en/insights/articles/2020/april/15/the-nigerian-code-of-corporate-governance-2018-a-synopsis
Okeke, M. U. (2023). Empirical analysis of foreign ownership, institutional ownership, and modified going concern audit opinion of listed firms in Nigeria. Apex Journal International. https://apexjournal.org/jbamsr/archive/2023/January/fulltext/Okeke.pdf
Okolie, A. O., & Uwejeyan, J. C. (2022). Board characteristics and financial performance of conglomerates in Nigeria. European Journal of Business and Management Research, 7(2), 149–155. https://doi.org/10.24018/ejbmr.2022.7.2.1344
Olofinlade, S. O. (2021). The Role of Forensic Audit on Management Frauds in Nigerian DMBs. International Journal of Accounting, Finance and Risk Management, 6(3), 69. https://doi.org/10.11648/j.ijafrm.20210603.11
Oyedokun, G. E. (2015). Evolution of forensic accounting and its role in Nigeria’s economy. Share and Discover Knowledge on SlideShare. https://www.slideshare.net/godwinoye/evolution-of-forensic-accounting-and-its-role-in-nigeria-economy
Pucheta-Martínez, M. C., & Gallego-Álvarez, I. (2019). Do board characteristics drive firm performance? an international perspective. Review of Managerial Science, 14(6), 1251–1297. https://doi.org/10.1007/s11846-019-00330-x
Raed, K. (2021). The Impact of Board of Directors Characteristics on Firm Performance: A Case Study in Jordan. The Journal of Asian Finance, Economics and Business, 8(3), 341–350. https://doi.org/10.13106/jafeb.2021.vol8.no3.0341
Rehman, A., & Hashim, F. (2020). Can forensic accounting impact sustainable corporate governance? Corporate Governance: The International Journal of Business in Society, 21(1), 212–227. https://doi.org/10.1108/cg-06-2020-0269
Shettima, U., & Dzolkarnaini, N. (2018). Board characteristics and Microfinance Institutions’ performance. Journal of Accounting in Emerging Economies, 8(3), 369–386. https://doi.org/10.1108/jaee-01-2017-0006
Published
2024-02-10
How to Cite
Akinadewo, J. O., Akinadewo, I. S., & Igbekoyi, O. E. (2024). Assessment of the Impact of Board Characteristics on Forensic Accounting Practices of Listed Deposit Money Banks (DMBs) in Nigeria. European Journal of Science, Innovation and Technology, 4(1), 108-124. Retrieved from https://ejsit-journal.com/index.php/ejsit/article/view/368
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Copyright (c) 2024 Jeremiah Oreoluwa Akinadewo, Israel Seriki Akinadewo, Olusola Esther Igbekoyi
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