53009045 Msc Accounting Seminar Paper on Forensic Audit

8/16/2019 53009045 Msc Accounting Seminar Paper on Forensic Audit

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SEMINAR PAPER

ON

FORENSIC AUDITING

PRESENTED BY

ENE MARIA OCHAPA

REG NO: 15/8506/MSc

DEPARTMENT OF ACCOUNTINGFACULTY OF MANAGEMENT SCIENCES

FEDERAL UNIVERSITY OF AGRICULTURE MAKURDI

MAY, 2016

ABSTRACT

The menae !" "#a$%, !##$&'(!n, an% m()"ea)ane a#e !mm!n&*ae an% a#e 'he

(n#ea)e +*!a**- an%, (n%ee%, (n N(+e#(a. Th$), "!#en)( a!$n'(n+ !# "!#en)(

a$%('(n+ ha) eme#+e% ea$)e !" 'he )$#+e (n "#a$%. A!#%(n+*-, 'he a(m !" 'h()


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!ne&'$a* &a&e# () 'h#ee"!*%. F(#)', 'h() &a&e# )!$+h' '! (m(e 'he a#' !" "!#en)(

'h(n/(n+ am!n+ a!$n'an') )e!n%, (' a(me% a' )'(m$*a'(n+ an% !m!'(n+ 'he

$n%e#)'an%(n+ !" a)( "!#en)( )/(**) an% 'h(#%, (' a(me% a' e&an%(n+ 'he )'!/ !"

*('e#a'$#e (n "!#en)( a!$n'(n+ an% a$%('. G(en 'h() #!a% )&e'#$m !" !3e'(e)

!" 'h() &a&e#, ha#a'e#()'() !" a "!#en)( a$%('!# 4e#e eam(ne% an% )/(**) a) 4e**

a) !3e'(e) !" "!#en)( a$%(' 4e#e %()$))e%. In 'he %()$) !" 'he a&&*(a'(!n !"

"!#en)( a$%(', !'h #ea'(e an% !a'(e a!$n'(n+) 4e#e eam(ne%. Th() 4a)

"!**!4e% - a h(+h*(+h' !n 'he %()'(n'(!n e'4een )'a'$'!#- a$%(' an% "!#en)(

a$%('. De'e'(!n 'ehn(5$e) an% )'e&) (n !n%$'(n+ "!#en)( a$%(' 4e#e a*)!

%()$))e%. e !n*$%e% 'ha' "!#en)( a$%(' a'(e !$*% #e%$e 'he (n(%ene !"

"#a$%.

TABLE OF CONTENTS

C!e# &a+e 7 7 7 7 7 7 7 7 7 7 1

A)'#a' 7 7 7 7 7 7 7 7 7 7 2

Ta*e !" C!n'en' 7 7 7 7 7 7 7 7 7 8


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1.0 INTRODUCTION 7 7 7 7 7 7 7 7 9

1.0.1 Oe#(e4 an% De"(n('(!n !" "!#en)( a$%('(n+ 7 7 9

1.0.2 O3e'(e) !" 'he Pa&e# 7 7 7 7 7 7 :

1.0.8 ;()'!#(a* Ba/+#!$n% !" F!#en)( A$%(' 7 7 7 <

1.2 C;ARACTERISTICS OF A FORENSIC AUDITOR 7 7 7 11

1.8 SKILLS FOR FORENSIC AUDIT 7 7 7 7 7 12

1.= OB>ECTIVES OF FORENSIC AUDIT 7 7 7 7 7 18

1.9 APPLICATION OF FORENSIC AUDIT 7 7 7 7 18

1.9.1 Rea'(e F!#en)( A!$n'(n+ 7 7 7 7 7 18

1.9.2 P#!a'(e F!#en)( A!$n'(n+ 7 7 7 7 7 19

1.6 ADVANTAGES AND DISADVANTAGES OF FORENSIC AUDIT 191.6.1 A%an'a+e !" F!#en)( A$%(' 7 7 7 7 7 19

1.6.2 D()a%an'a+e) !" F!#en)( A$%('7 7 7 7 7 16

1.? DISTINCTION BETEEN STATUTORY AUDIT AND FORENSIC AUDIT

7 7 7 7 7 7 7 7 7 7 1?

1.: DETECTION TEC;NI@UES IN FORENSIC AUDITING 77 1:

1.< TYPES OF INVESTIGATION IN FORESIC AUDITING7 7 1<

1.


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1.18 REFERENCES 7 7 7 7 7 7 7 7 2:

1.0 INTRODUTION

1.0.1 Overview !" De#i!i$i%! %# F%re!&ic A'"i$

A+#eea*-, 'he (n(%ene !" "#a$%, !##$&'(!n, m()"ea)ane, #(me) an%

'e##!#()m a#e n!' !n*- !n 'he (n#ea)e, $' a*)!, 'he- &e#a%e ee#- )e'!# !" !$#


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)!(e'- an% 'he +*!e a' *a#+e. The nee% '! (%en'("- 'he )!$#e) an% $)e) !" m!ne-

(n (**e+a* a'(('- () a sine qua non (n ee#- (ne)'(+a'(!n, (n*$%(n+ 'e##!#()m an%

!$n'e#(n'e**(+ene. Th#!$+h 'he %ee*!&men' !" "!#en)( a!$n'(n+, a!$n'an')

n!4 hae !ne m!#e '!!* '! e""e'(e*- an% e""((en'*- %ea* 4('h 'he ha**en+e)

"ae% (n %e'e'(n+ "(nan(a* #(me) an% '#a(n+ (**7+!''en +a(n) "#!m (**e+a*

a'(('(e).

F#a$% () a %#((n+ "!#e eh(n% a )$#+e (n %eman% "!# "!#en)( a!$n'an')

'#a(ne% '! &e#"!#m a!$n'(n+ a$'!&)(e). Th$) "!#en)( a!$n'an') %())e'

"(nan(a* #e!#%) an% )n("" !$' 'he %ee&'(!n !" eme*(n+ em&*!-ee), !nn((n+

!#&!#a'(!n), )nea/- )&!$)e) an% )e#e a) e&e#' 4('ne))e) (n #e)$*'(n+ '#(a*).

F!#en)( a!$n'(n+ ha) e!me a h!' !"e))(!n ea$)e !" 'he 4ae !" e!n!m( #(me), a )4a#m !" !#&!#a'e )an%a*), an (n#ea)e (n an/#$&'(e) an%

!$&a'(!na* "#a$%. In 'he)e %a-), %e'e'(e) an% a''!#ne-) hae '! 'eam $& 4('h

"!#en)( a!$n'an') '! '#a/ %!4n *$e) (n "(nan(a* #e!#%) !# '! "(n% ('(m) an%

)$)&e').

F#a$% an% "!#en)( a!$n'(n+ a""e' 'he a!$n'(n+ !"e))(!n !n a %a(*-

a)(). The Fe%e#a* G!e#nmen' !" N(+e#(a, 'h#!$+h 'he %ee*!&men' an%

(m&*emen'a'(!n !" a#(!$) A'), La4), an% F#a$%7"(+h'(n+ a+en(e), hae &a(% he#

%$e) (n 'he !e#a** a''em&' a#!)) 'he 4!#*% '! $# 'he menae !" !##$&'(!n, "#a$%

an% m()"ea)ane. N!'a*e am!n+)' 'he)e a''em&') () 'he e)'a*()hmen' !" a+en(e)

)$h a) The E!n!m( an% F(nan(a* C#(me) C!mm())(!n The EFCC The

In%e&en%en' C!##$&' P#a'(e) C!mm())(!n The ICPC The Na'(!na* D#$+ La4

En"!#emen' A+en- The NDLEA e'.

F!#en)( a$%('(n+ !e#) a #!a% )&e'#$m !" a'(('(e), 4('h 'e#m(n!*!+-

n!' )'#('*- %e"(ne% (n #e+$*a'!#- +$(%ane. Gene#a**-, 'he 'e#m "!#en)( a!$n'(n+

() $)e% '! %e)#(e 'he 4(%e #an+e !" (ne)'(+a'(e 4!#/ 4h(h a!$n'an') (n

a'(e !$*% e a)/e% '! &e#"!#m. The 4!#/ 4!$*% n!#ma**- (n!*e an

(ne)'(+a'(!n (n'! 'he "(nan(a* a""a(#) !" an en'('- an% !"'en a))!(a'e% 4('h

(ne)'(+a'(!n) (n'! a**e+e% "#a$%$*en' a'(('-. F!#en)( a!$n'(n+ #e"e#) '! 'he


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4h!*e !e)) !" (ne)'(+a'(n+ a "(nan(a* ma''e#, (n*$%(n+ &!'en'(a**- a'(n+ a) an

e&e#' 4('ne)) (" 'he "#a$% !me) '! '#(a*. A*'h!$+h 'h() a#'(*e "!$)e) !n

(ne)'(+a'(!n) (n'! a**e+e% "#a$%), (' () (m&!#'an' '! e a4a#e 'ha' "!#en)(

a!$n'an') !$*% e a)/e% '! *!!/ (n'! n!n7"#a$% )('$a'(!n), )$h a) 'he )e''(n+ !"

m!ne'a#- %()&$'e) (n #e*a'(!n) '! a $)(ne)) *!)$#e !# ma'#(m!n(a* %()&$'e) $n%e#

(n)$#ane *a(m).

The !e)) !" "!#en)( a!$n'(n+ a) %e)#(e% a!e (n*$%e) 'he "!#en)(

(ne)'(+a'(!n (')e*", 4h(h #e"e#) '! 'he a'(a* )'e&) 'ha' 'he "!#en)( a!$n'an'

'a/e) (n !#%e# '! +a'he# e(%ene #e*ean' '! 'he a**e+e% "#a$%$*en' a'(('-. The

(ne)'(+a'(!n () *(/e*- '! e )(m(*a# (n man- 4a-) '! an a$%(' !" "(nan(a*

(n"!#ma'(!n, (n 'ha' (' 4(** (n*$%e a &*ann(n+ )'a+e, a &e#(!% 4hen e(%ene ()+a'he#e%, a #e(e4 !e)), an% a #e&!#' '! 'he *(en'. The &$#&!)e !" 'he

(ne)'(+a'(!n, (n 'he a)e !" an a**e+e% "#a$%, 4!$*% e '! %()!e# (" a "#a$% ha%

a'$a**- 'a/en &*ae, '! (%en'("- 'h!)e (n!*e%, '! 5$an'("- 'he m!ne'a#- am!$n' !"

'he "#a$% (.e. 'he "(nan(a* *!)) )$""e#e% - 'he *(en', an% '! $*'(ma'e*- e)en'

"(n%(n+) '! 'he *(en' an% &!'en'(a**- '! !$#'.

F(na**-, "!#en)( a$%('(n+ #e"e#) '! 'he )&e("( !e%$#e) a##(e% !$' (n !#%e#

'! !%$e e(%ene. A$%(' 'ehn(5$e) a#e $)e% '! (%en'("- an% '! +a'he# e(%ene

'! !e, "!# eam&*e, h!4 *!n+ 'he "#a$% ha) een a##(e% !$' an% h!4 (' 4a)

!n%$'e% an% !nea*e% - 'he &e#&e'#a'!#). E(%ene ma- a*)! e +a'he#e% '!

)$&&!#' !'he# ())$e), 4h(h 4!$*% e #e*ean' (n 'he een' !" a !$#' a)e. S$h

())$e) !$*% (n*$%e The )$)&e') m!'(e an% !&&!#'$n('- '! !mm(' "#a$%

4he'he# 'he "#a$% (n!*e% !**$)(!n e'4een )ee#a* )$)&e') an- &h-)(a*

e(%ene a' 'he )ene !" 'he #(me !# !n'a(ne% (n %!$men') !mmen') ma%e -

'he )$)&e' %$#(n+ (n'e#(e4) an%!# a' 'he '(me !" a##e)' a''em&') '! %e)'#!-

e(%ene, am!n+ !'he#).

()$ i& F%re!&ic A'"i$ %r F%re!&ic Acc%'!$i!*+

A!#%(n+ '! (/(&e%(a 2010, 'he 'e#m "!#en)(H mean) )$('a*e "!# $)e

(n 'he !$#' !" *a4H. F!#en)(, a!#%(n+ '! 'he e)'e#) D('(!na#- mean),


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Be*!n+(n+ '!, $)e% (n !# )$('a*e '! !$#') !" 3$%(a'$#e !# '! &$*( %()$))(!n

an% %ea'eH.

F!#en)( a$%(' !# "!#en)( a!$n'(n+ an e $)e% (n'e#han+ea*-. F!#en)(

a!$n'(n+ () %e"(ne% a) 'ha' a)&e' !" a!$n'(n+ 'ha' !(%e) an a!$n'(n+

ana*-)() 'ha' () )$('a*e '! 'he !$#', 4h(h 4(** "!#m 'he a)() "!# %()$))(!n,

%ea'e an% $*'(ma'e*- %()&$'e #e)!*$'(!n. F$#'he#m!#e, "!#en)( a!$n'(n+

!m()e) 'he $)e !" a!$n'(n+, a$%('(n+, an% (ne)'(+a'(e )/(**) '! a))()' (n *e+a*

ma''e#). I' !n)()') !" '4! 2 ma3!# !m&!nen') a. *('(+a'(!n )$&&!#' an%

)e#(e), 4h(h #e!+n(e 'he #!*e !" 'he a!$n'an' a) an e&e#' !n)$*'an' .

(ne)'(+a'(e )e#(e), 'ha' $)e a "!#en)( a!$n'an') )/(**) an% ma- #e5$(#e

&!))(*e !$#'#!!m 'e)'(m!n-.F!#en)( a$%(' (n!*e) eam(na'(!n !" *e+a*('(e) - *en%(n+ 'he 'ehn(5$e)

!" !(e'- VFM a$%(', #e+$*a#('-, an% (ne)'(+a'(e an% "(nan(a* a$%('). The

!3e'(e () '! "(n% !$' 4he'he# !# n!' '#$e $)(ne)) a*$e ha) een #e"*e'e% (n 'he

"(nan(a* )'a'emen') an% (n 'he !$#)e !" eam(na'(!n '! "(n% 4he'he# an- "#a$% ha)

'a/en &*ae.

F!#en)( a$%(') a#e &e#"!#me% - )&e(a* *a)) !" "(nan(a* e&e#') /n!4 a)

"!#en)( a!$n'an'). Th() *a)) (n*$%e) e#'("(e% "#a$% eam(ne#) &e!&*e 4('h

ahe*!#) %e+#ee) !# e5$a* !"e))(!na* e&e#(ene 4h! hae a a/+#!$n% (n

a!$n'(n+, !)e$'(n+ "#a$%, *!)) een'(!n !# #(m(n!*!+-)!(!*!+- 4h! &a))

'he CFE 'e)' CPA), !# Cha#'e#e% A!$n'an').

F!#en)( a$%('!#) e+(n - 'a/(n+ a** 'he a!$n'), (nen'!#(e), a))e'), a&('a*

an% !'he# e!n!m( e*emen') an% %e'e#m(n(n+ h!4 'he- )h!$*% 4!#/ '!+e'he#. T!

$)e a h-&!'he'(a* eam&*e, (" an a$%('!# )ee) 'ha' a $)(ne)) +#!))e) J10 m(**(!n a

-ea#, he a))$me) 'ha' 'he !"('), a)h, ne4 a&('a*, (nen'!#(e), 'ae), &a-#!**, #en'

an% !'he# !)') a%% $& '! J10 m(**(!n. ;e 'hen *!!/) a' 'he !"('), a)h, e' a* an%

he/) h!4 'he- !$+h' '! (n'e#a' e.+. (n )!me a)e), 'he#e () a )-)'em( !e#*a&

e'4een e#'a(n a*$e), 4h(h 'he a!$n'an' 4!$*% ma/e n!'e !" )! a) n!' !e#

!$n'. One he ha% !**e'e% a** !" 'he #e&!#'e% a*$e) a) 4e** a) aea'), he


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4!$*% e)'a*()h an (%ea* m!%e* "!# h!4 'he eah )(%e !" 'he a*ane )hee' )h!$*%

#ea%.

One !m&*e'e%, 'he #e&!#' () )en' '! 'he a&!(a'e a$'h!#('(e) an%

#e!#%e% a) e(%ene. h(*e (') !m&*e'ene)) an% !3e'(('- a#e e#'a(n*-

(m&!#'an', a "!#en)( a$%(' #e&!#') m!)' $)e"$* a''#($'e () 'he )$mma#- !" #e)$*').

F(nane () a h(+h*- 'ehn(a* %()(&*e '! a!mm!%a'e 'h() !m&*e('-,

a!$n'an- ha) a%!&'e% an e()e *e(!n. A) )$h, an $n)#$&$*!$) %e"en)e

a''!#ne- !$*% e&*!(' 'he ae#a+e 3$#!#) (+n!#ane !" )$h 'e#m(n!*!+- '!

%()!$n' a$%(' #e)$*') 'ha' a#e a'$a**- !m&e**(n+. L$/(*-, ha#'e#e% a!$n'an')

)&e(a*((n+ (n "!#en)( $n%e#)'an% "(nane a) 4e** a) #(m(na* *a4. Th() a**!4)

'hem '! '#an)*a'e a$%(' #e)$*') (n'! *an+$a+e $)e"$* '! !)e$'!#) '#-(n+ '! $(*% aa)e.

1.0., T)e O-ec$ive& %# $)i& er

The !3e'(e) !" 'h() &a&e# (n*$%e

1. T! (m(e 'he a#' !" "!#en)( 'h(n/(n+ am!n+ a!$n'an')

2. T! )'(m$*a'e an% !m!'e 'he $n%e#)'an%(n+ !" a)( "!#en)( )/(**)

8. T! e&an% 'he )'!/ !" *('e#a'$#e (n "!#en)( a!$n'(n+ an% a$%('.

1.0.3 i&$%ric Bc2*r%'!" %# F%re!&ic A'"i$/F%re!&ic Acc%'!$i!*

Ke))# (n'e#na'(!na*, a 4!#*% #en!4ne% "!#en)( a!$n'(n+ an% (ne)'(+a'(e

!n)$*'(n+ "(#m, e+an h() *("e*!n+ a#ee# a) a "!#en)( a!$n'an' (n 'he ea#*-

1


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'he !#(+(na* %!$men'a'(!n !" 'he "a(*('- #e&!#'e% !n 'he !)' #e&!#' an% a)e#'a(n

(" (' !&e#*- #e"*e'e% 'he a'$a* #een$e an% e&en)e) !" 'he "a(*('-.

M#. Ke))*e#) a$%(') e+an $n!e#(n+ )(+n("(an' "#a$% - 'he "a(*('(e) he

a$%('e%, )! he 4a) %e)(+na'e% a) !ne !" 'he !m&an(e) "(#)' "(e*% a$%('!#)

)&e(a*((n+ (n (ne)'(+a'(e a$%('). M#. Ke))*e#), 4an'(n+ ' '! %()'(n+$()h h() #!*e

"#!m !'he# "(e*% a$%('!#) an% 'he a!$n'an') 4h!)e 3! 4a) '! e#'("- 'he !!/)

an% #e!#%) !" a "a(*('-, e+an a**(n+ h(m)e*" an Ine)'(+a'(e a!$n'an'H, a

'e#m he hea#% 4h(*e 4!#/(n+ *!)e*- 4('h 'he +!e#nmen') a!$n'an') a))(+ne%

'! ana*-e h() "#a$% "(n%(n+). Ke))*e# 5$(/*- #ea*(e% 'ha' 'h() '('*e 4!$*% n!' e

ae&'e% - (n%((%$a*) (n 'he hea*'h a#e (n%$)'#-. I' )eeme% n! !ne "e*'

!m"!#'a*e (n 'he han%) !" an (ne)'(+a'(e A$%('!#H. Ke))*e# 4a) n!4 "ae%4('h a %(*emma Ke))*e#) (n)&(#a'(!n ame "#!m a e#- $n*(/e*- )!$#e. One n(+h'

a"'e# 4a'h(n+ h() "a!#('e )h!4, C!*$m!H, he "!$n% 'he #e)!*$'(!n '! h()

!*em. T! )!me (e4e#) C!*$m!) m!)' mem!#a*e a''#($'e 4a) h() #$m&*e

#a(n!a', $' "!# M(hae* G. Ke))*e#, (' 4a) m$h m!#e. Ke))*e# #ea*(e% 'he &e'e#

Fa*/ !$*% 5$(/*- )!*((' 'he !!&e#a'(!n !" %e"en%an') an% )!*e a)e) $)(n+ a

+en'*e a&!ah an% 'he $)e !" "!#en)( e(%eneH. Ke))*e# 'h$) e+an a**(n+

h(m)e*" a "!#en)( a$%('!#H, a 'e#m !(ne% - Ke))*e#, an% n!4 4(%e*- $)e% 4('h(n

'he (n%$)'#-. ;e "!$n% 'he #e)$*' 4a) a) he ha% h!&e% an% he 4a) 5$(/*- ae&'e%

4hen 'he ann!$ne% h(m)e*" (n 'he hea*'h a#e !mm$n('-.

The #e)' () h()'!#- an% '!%a- "!#en)( a!$n'(n+ () !ne !" 'he "a)'e)'

+#!4(n+ !"e))(!n) (n 'he na'(!n. ('h 4!#*%4(%e !""(e) an% !n )'a"" )&e(a*()')

(n "!#en)( A!$n'(n+, C!m&$'e# "!#en)(, R()/ mana+emen', an% !#&!#a'e

(ne)'(+a'(!n, Ke))*e# (n'e#na'(!na* !(%e) )!*$'(!n '! %(""($*' $)(ne)) !*em.

A$%('!#) nee% '! e a*e#' "!# )('$a'(!n), !n'#!* 4ea/ne))e) , (na%e5$a(e) (n #e!#%

/ee&(n+, e##!#) an% $n$)$a* '#an)a'(!n) !# #e)$*') 4h(h !$*% e (n%(a'(e !"

"#a$%, (m!&e# !# $n*a4"$* e&en%('$#e, $na$'h!#(e% !&e#a'(!n), 4a)'e,

(ne""((en- !# *a/ !" !('-.


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The *a)' %ea%e !# )! 'he 4!#%) "!#en)( a$%('(n+ hae e!me &a#' an%

&a#e* !" !$# !a$*a#- $' $n%e# 'he +ene#a* &!&$*a'(!n 'he !n*- a))!(a'(!n 'he

ma/e () 'ha' (' () 3$)' an!'he# a!$n'(n+H !# a$%('(n+H !e%$#e !# !e)).

;!4ee#, *e' $) )'a#' a' 'he e#- e+(nn(n+ A!$n'(n+ () 'he !e)) !"

(%en'("-(n+, mea)$#(n+, #e!#%(n+, an% !mm$n(a'(n+ e!n!m( (n"!#ma'(!n a!$'

an !#+an(a'(!n !# en'('-, (n !#%e# '! &e#m(' (n"!#me% 3$%+men') - $)e#) !" 'he

(n"!#ma'(!n. On 'he !'he# )(%e !" 'he !(n () "!#en)( a$%('(n+ 4h(h () a ne4

%()(&*(ne $n%e# 'he $m#e**a a$%('(n+.

I' () #(me, an% e)&e(a**- e!n!m( #(me 'ha' +ae (#'h '! "!#en)(

a$%('(n+. E!n!m( #(me () an $n&*ea)an' "a' an% ha) e)a*a'e% (n'! a m!n)'e#. I'

'!$he) ee#- !$n'#-, ee#- (n%$)'#-, an% ha) n! )(+n) !" )'!&&(n+. D$#(n+ 'he &a)' %ea%e, 'he n$me# !" #e&!#'e% a)e) !" "#a$% an% !##$&'(!n ha) !n'(n$e% '!

+#!4 %#ama'(a**-.

C!m&!$n%(n+ 'ha' () 'he ha**en+e) "ae% - 'he #(m(na* 3$)'(e )-)'em an%

a +ene#a* a)ene !" 'he nee))a#- )/(**) '! +a'he# 'he !&e# a$%(' e(%ene )!

('a* '! #(m(na* (ne)'(+a'(!n). In"!#ma'(!n "#!m *a4 en"!#emen' an% #(m(na*

3$)'(e a+en(e) a!$' !##$&'(!n an% "#a$% a)e) () 'ha' +ene#a**- )&ea/(n+, 'he

)$e)) #a'e "!# !n('(!n) a#e n!' )a'()"a'!#- 'he #ea)!n e(n+ 'ha' !)e$'(n+

a$'h!#('(e) *a/e% )/(**) an% /n!4*e%+e '! !(%e e""e'(e (ne)'(+a'(!n an%

!)e$'(!n !" !##$&'(!n an% "#a$% a)e). En'e# "!#en)( a$%('(n+

The#e"!#e, "!#en)( a!$n'(n+ %#a4) (') name "#!m a))!(a'(!n 4('h a !$#'

!" *a4. I' () &e#"!#me% '! a!m&*()h an !3e'(e 'ha' (n!*e) a 3$%((a* !e)).

Eam&*e) !" "!#en)( a!$n'(n+ !3e'(e) (n*$%e !m&$'a'(!n !" a))e' a*$e) (n

a %(!#e !ee%(n+ a))e))men' !" %ama+e) a$)e% - an a$%('!#) ne+*(+ene

"a'7"(n%(n+ '! )ee 4he'he# eme*emen' ha) 'a/en &*ae, (n 4ha' am!$n', an%

4he'he# #(m(na* !ee%(n+) a#e '! e (n('(a'e% an% 'he !**e'(!n !" e(%ene (n a

#(m(na* !ee%(n+. F!#en)( a!$n'(n+ () "!$)e% $&!n !'h 'he e(%ene !"

"(nan(a* '#an)a'(!n) an% #e&!#'(n+ a) !n'a(ne% 4('h(n an a!$n'(n+ )-)'em, an%

'he *e+a* "#ame4!#/ 4h(h a**!4e% )$h e(%ene '! e )$('a*e '! 'he &$#&!)e !"


11/26

11

e)'a*()h(n+ a!$n'a(*('-. F!#en)( a!$n'an') a#e '-&(a**- Cha#'e#e%

A!$n'an') 'ha' )&e(a*(e (n 'h!)e '-&e) !" a)e) 4he#e 'he#e () nee% "!# )$h

e(%ene.

The(# 3! () '! %e'e' an% (n'e#e' 'he e(%ene) !" !'h n!#ma* n!n

"#a$%$*en' an% an!#ma* "#a$%$*en' '#an)a'(!n) (n 'he !!/) an% #e!#%) !" an

a!$n'(n+ )-)'em an% 'he )$)e5$en' e""e' $&!n 'he a!$n'), (nen'!#(e), an%

'he e)en'a'(!n 'he#e!". I' () (m&e#a'(e 'he#e"!#e, 'ha' "!#en)( a!$n'an' "(#)'

$n%e#)'an% 4ha' n!#ma* a!$n'(n+ !e%$#e) an% !e))e) a#e #ememe# 'he-

a#e "(#)' an% "!#em!)' ha#'e#e% a!$n'an'). >$)' a) "!#en)( %en'()') an% "!#en)(

an'h#!&!*!+()') a#e %en'()') !# an'h#!&!*!+()') "(#)' 'ha' (), 'he- a#e "!#em!)'

!"e))(!na*) (n 'he $n%e#*-(n+ %()(&*(ne an% a#e )&e(a*()') (n (') "!#en)(a)&e'), )! '!! "!#en)( a!$n'an') a#e a!$n'an') "(#)'.

1., CARACTERISTICS OF A FORENSIC AUDITOR.

A!#%(n+ '! N+!( 2010, a a&a*e "!#en)( a!$n'an' !# a$%('!# )h!$*% hae

'he "!**!4(n+ ha#a'e#()'()

(. C$#(!)('-

((. Pe#)()'ene

(((. C#ea'(('-

(. D()#e'(!n

. O#+an(a'(!n

(. C!n"(%ene an%

((. S!$n% !"e))(!na* 3$%+men'.

1.3 S4ILLS FOR FORENSIC AUDIT

a. Kn!4*e%+e !" en'('-) $)(ne)) an% *e+a* en(#!nmen' . A4a#ene)) !" !m&$'e# a))()'e% a$%(' !e%$#e). Inn!a'(e a&!ah an% )/e&'( !" #!$'(ne a$%(' a'(e)

A!#%(n+ '! N+!( 2010, 'he )/(**) !# !m&e'en(e) #e5$(#e% !" a "!#en)(

a$%('!#, an e %((%e% (n'! '4! #!a% *a))("(a'(!n), name*-1. Gene#a* !m&e'en(e))/(**)

(. C!mm$n(a'(!n)((. Se*" !# *("e mana+emen'


12/26

12

(((. In'e#&e#)!na* )/(**)(. Lea%e#)h(&. O#+an()a'(!na*(. Mana+emen' S/(**)((. S'a/eh!*%e# !mm$n(a'(!n) an% %ee*!&men'(((. Kn!4*e%+e.

2. Tehn(a* !m&e'en(e))/(**)(. Le+a*, )a"e'- an% )!$n%ne)) !# !m&*(ane ana*-)()((. Tehn(a* !mm$n(a'(!n(((. Da'a !**e'(!n an% ana*-)()(. F(nan(a* ana*-)().

1. OBECTI7ES OF FORENSIC AUDIT

F!#en)( a$%('(n+ a(m) a' *e+a* %e'e#m(na'(!n !" 4he'he# "#a$% ha) a'$a**-

!$##e%. In 'he !e)), (' a*)! a(m) a' nam(n+ 'he &e#)!n) (n!*e% 4('h a (e4

'! 'a/e *e+a* a'(!n.

O3e'(e !" "!#en)( a$%(' () '! "(n% 4he'he# !# n!' a "#a$% ha) 'a/en &*ae.

F!#en)( a$%('!# )ha** hae '! eam(ne !*$m(n!$) an% (n '!'a*('-, #e!#%) an%

4('ne))e), (" &e#m(''e% - *a4. P#!&e# %!$men'a'(!n () ('a* (n "!**!4(n+, (n a)e

!" "#a$%)

•

P#!(n+ 'he *!))• P#!(n+ 'he #e)&!n)((*('- "!# 'he *!))

• P#!(n+ 'he me'h!%m!'(e

• E)'a*()h(n+ +$(*'- /n!4*e%+e

• I%en'("-(n+ !'he# ene"((a#(e)

1.5 ALICATION OF FORENSIC AUDIT

An !(!$) eam&*e !" "!#en)( a$%('(n+ () 'he (ne)'(+a'(!n !" a "#a$% !#

e)$m&'(e "#a$% 4('h a (e4 '! +a'he#(n+ e(%ene 'ha' !$*% e e)en'e% (n a

!$#' !" *a4. ;!4ee#, 'he#e () an (n#ea)(n+ $)e !" a$%('(n+ )/(**) '! een' "#a$%

- (%en'("-(n+ an% #e'("-(n+ )('$a'(!n) 4h(h !$*% *ea% '! "#a$%), e(n+

&e#&e'#a'e% (.e. #()/). I' m(+h' e $)e"$*, 'he#e"!#e, '! %()$)) "!#en)( a$%('(n+ a)

e(n+ e('he# Rea'(e !# P#!a'(e.


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13

1.5.1 Rec$ive F%re!&ic A'"i$i!*

The !3e'(e (n a)e !" #ea'(e "!#en)( a$%(' () '! (ne)'(+a'e a)e) !" )$)&e'e%

"#a$% )! a) '! !e !# %()!e 'he )$)&((!n), an% (" 'he )$)&((!n) a#e !e), '!

(%en'("- 'he &e#)!n) (n!*e%, )$&&!#' 'he "(n%(n+) - e(%ene an% '! e)en' 'he

e(%ene (n an ae&'a*e "!#ma' (n an- )$)e5$en' %()(&*(na#- !# #(m(na*

!ee%(n+).

In )$h a)e) (' () (m&!#'an' '! /ee& (n (e4 'he "!**!4(n+

• !#/(n+ #e*a'(!n) 4('h 'he (ne)'(+a'(n+ an% !)e$'(n+ a+en(e)

• A$'h!#(a'(!n an% !n'#!* !" a$%(' (ne)'(+a'(!n

• D!$men'a'(!n !" #e*ean' (n"!#ma'(!n an% )a"e+$a#%(n+ a** (me #e!#%)

&e#'a(n(n+ '! 'he a)e

• R$*e) !" e(%ene +!e#n(n+ a%m())((*('- a$'hen'(a'(!n !" #e!#%)• C!n"(%en'(a**-

• Ea*$a'(!n !" 'he e(%ene '! a))e)) 4he'he# 'he a)e () )$)'a(na*e

• Le+a* a%(e 4he#e a&!(a'e

• Re&!#'(n+ 'he "(n%(n+) (n a manne# 'ha' mee') *e+a* #e5$(#emen')

F!#en)( a!$n'(n+ an% a$%(' ma- e a&&*(e% (n 'he "!**!4(n+ a#ea) e)(%e) "#a$%

%e'e'(!n

a. C!n%$'(n+ %$e7%(*(+ene e)&e(a**- "!# )e+men' 4()e !"('a(*('-ana*-)()

. B$)(ne)) a*$a'(!n. Mana+emen' a$%('(n+%. A))e))(n+ *!)) e"!#e )e''(n+ (n)$#ane *a(m)

F!#en)( a$%(') a#e $)e% 4henee# *a4-e#) !# *a4 en"!#emen' !""((a*) nee%

#e*(a*e %a'a !n a &a#'-) "(nan(a* )'a'$) !# a'(('(e). F!# eam&*e, 4h(*e #eah(n+

a %(!#e )e''*emen', a *a4-e# ma- #e5$e)' 'he e)(%(n+ 3$%+e '! &e#m(' a "!#en)(

a$%(' '! $n!e# a))e') 'ha' !ne )&!$)e () '#-(n+ '! h(%e.

I" -!$ 4an' '! )$e an% a$%('!# !# 'he a!$n'(n+ "(#m "!# ne+*(+ene, -!$

4!$*% #e5$e)' )e&a#a'e "!#en)( a$%(' '! %e'e#m(ne h!4 m$h 'he !'he% 3! !)'

-!$. In $)(ne)), (" an e*e'e% !""((a* () a$)e% !" ae&'(n+ #(e), 'he FBI !$*%

)e' $& a "!#en)( a$%('(n+ 'eam. F!#en)() a$%(') a#e )!$+h' - CEO), Ch(e"

"(nan(a* !""(e#) !# !a#% meme#) 4h! )$)&e' eme*emen' 4('h 'he !m&an-.


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14

1.5., r%c$ive F%re!&ic A'"i$i!*

F!#en)( a$%('(n+ (n 'h() )en)e !$*% e (e4e% "#!m %(""e#en' a)&e')

%e&en%(n+ !n (') a&&*(a'(!n, )!me !" 4h(h a#e %()$))e% e*!4.

Regulatory Compliance

G!e#nmen' De&a#'men')A+en(e) !$*% 'hem)e*e) $)e 'he 'ehn(5$e) !"

"!#en)( a$%('(n+ '! a))e)) !m&*(ane 4('h #e+$*a'(!n) +!e#n(n+ &a-men') !"

+#an'))$)(%e). Pe#"!#mane a$%('!#) !$*% a*)! $)e 'he)e 'ehn(5$e) 4h(*e

a$%('(n+ )$h +!e#nmen'a* !+#am). T! a *a#+e e'en' 4e (n SAI In%(a hae

a&&*(e% )$h 'ehn(5$e) (n )!me !" !$# ma3!# a$%(') !" *a#+e +!e#nmen' !+#am)

)$h a) In'e+#a'e% Ch(*% Dee*!&men' Sheme P$*( D()'#($'(!n Sheme "!#

"!!% +#a(n), '! $)'!m) %$'- %#a4a/) an% e&!#' )$)(%(e). Diagnostic Tool

F!#en)( a$%('(n+ an e $)e% e('he# - mana+emen' !# - a$%('!#) '! a##-

!$' +ene#a* #e(e4) !" a'(('(e) '! h(+h*(+h' #()/) a#()(n+ e('he# !$' !" "#a$% !#

"#!m an- !'he# )!$#e 4('h 'he &$#&!)e !" (n('(a'(n+ "!$)e% #e(e4) !" &a#'($*a#

a#ea) 'a#+e'(n+ )&e("( 'h#ea') '! 'he !#+an(a'(!n.

1.6 AD7ANTAGES AND DISAD7ANTAGES OF FORENSIC AUDIT

1.6.1 A"v!$*e& %# F%re!&ic A'"i$

• F!#en)( a$%('(n+ )'#en+'hen) !n'#!* mehan()m), 4('h 'he !3e'(e !"

!'e'(n+ 'he $)(ne)) a+a(n)' "(nan(a* #(me), e 'he- &!'en'(a*

a'a)'#!&h( !ne7!"" een') 'ha' !$*% 'h#ea'en 'he (a(*('- !" 'he $)(ne)),

!# )ma**e#7)a*e $' #e&e'('(e m()a&!(a'(!n) !" !m&an- a))e') !e# a

n$me# !" -ea#).

•F!#en)( a$%('(n+ an &*a- an (m&!#'an' #!*e "!# !m&an(e) $n%e# #e(e4 -

#e+$*a'!#- a$'h!#('(e) an% an a*)! e (na*$a*e '! en)$#e #e+$*a'!#-

!m&*(ane. F!# eam&*e, "!#en)( a$%('(n+ an e $)e"$* (n he*&(n+

!m&an(e) '! en)$#e 'ha' 'he(# an'(7m!ne- *a$n%e#(n+ !e%$#e) a#e !'h

e""e'(e an% #!$)'.

• F!#en)( a$%('(n+ an he*& !'e' !#+an(a'(!n) "#!m 'he *!n+7'e#m %ama+e

'! #e&$'a'(!n a$)e% - 'he &$*(('- a))!(a'e% 4('h (n)(%e# #(me). A


15/26

15

"!#en)( a$%(' a*)! !(%e) a )!$n% a)e !" "a'$a* (n"!#ma'(!n 'ha' an e

$)e% '! he*& #e)!*e %()&$'e), an% an e $)e% (n !$#' )h!$*% 'he ('(m

)ee/ *e+a* #e%#e)).

• F!#en)( a$%('(n+ an (m!e e""((en- - (%en'("-(n+ a#ea) !" 4a)'e

• F!#en)( a$%('(n+ an he*& 4('h 'he %e'e'(!n an% #e!#%(n+ !" &!'en'(a*

!n"*(') !" (n'e#e)' "!# ee$'(e) - (m!(n+ '#an)&a#en- an% !('- (n

'he 4a- #e)!$#e) a#e $)e%, (n !'h (a'e an% &$*( en'('(e).

1.6., Di&"v!$*e& %# F%re!&ic A'"i$

• A &!!#*- mana+e% "!#en)( a$%(' !$*% !n)$me ee))(e am!$n') !"

mana+emen' '(me an% !$*% e!me an $n4e*!me %()'#a'(!n "!# 'he

$)(ne))

• F!#en)( a$%(') an hae 4(%e7#an+(n+ )!&e a#!)) 'he $)(ne)). Un%e#

e#'a(n (#$m)'ane), 'he )!&e !" 'he a$%(' ma- nee% '! e e'en%e%, 4('h a

!##e)&!n%(n+ (n#ea)e (n 'he $%+e'.

• S!me em&*!-ee) an (n'e#e' a !a'(e "!#en)( a$%(' a) a )*(+h' !n 'he(#

(n'e+#('-, #a'he# 'han a) a mean) '! (m!e !n'#!* !e%$#e) "!# 'he

ene"(' !" 'he $)(ne)).


16/26

16

1.9 DISTINCTION BET(EEN STATUTOR AUDIT AND FORENSIC AUDITS/! r$ic'r& S$$'$%r; '"i$ F%re!&ic '"i$

1 O3e'(e Ee)) !&(n(!n a) '! '#$e

"a(# e)en'a'(!n

De'e#m(ne !##e'ne))

!" 'he a!$n') !#

4he'he# an- "#a$% ha)

a'$a**- 'a/en &*ae

2 Tehn(5$e) S$)'an'(e an% !m&*(ane

!e%$#e)

Ana*-)() !" &a)' '#en%

an% )$)'an'(e !# (n%e&'h he/(n+ !"

)e*e'e% '#an)a'(!n).

8 Pe#(!% N!#ma**- a** '#an)a'(!n) "!#

'he &a#'($*a# a!$n'(n+

&e#(!%

N! )$h *(m('a'(!n),

a!$n') ma- e

eam(ne% (n %e'a(*

"#!m 'he e+(nn(n+

= Ve#("(a'(!n !" )'!/,e)'(ma'(!n !" #ea*(a'(!n

a*$e !" $##en' a))e'),

!()(!n) *(a(*('-

e)'(ma'(!n, e'

Re*(e) !n 'he '#an)a'(!n) "!# 'he &a#'($*a# a!$n'(n+

&e#(!%

N! )$h *(m('a'(!n).A!$n') ma- e

eam(ne% (n %e'a(*

"#!m 'he e+(nn(n+

9 O"" a*ane7)hee' ('em)

*(/e !n'#a')

U)e% '! !$h 'he a#('hme'(

a$#a- !m&*(ane 4('h

Re+$*a#('- an%

!(e'- !" 'he)e


17/26

17

!e%$#e) '#an)a'(!n) !n'#a')

a#e eam(ne%.

6 A%e#)e "(n%(n+), (" an- Ne+a'(e !&(n(!n !# 5$a*("(e%

!&(n(!n ee))e%, 4('h

4('h!$' 5$an'("(a'(!n.

Le+a* %e'e#m(na'(!n !"

"#a$% nam(n+ &e#)!n)

eh(n% )$h "#a$%).

1.8 DETECTION TECNI


18/26

18

)an'(!ne% an% (n$##e% a#e nee%7a)e% an% a** #een$e) %$e '! +!e#nmen'

hae een #ea*(e% (n '(me an% #e%('e% '! 'he +!e#nmen' a!$n'. In

!n%$'(n+ 'he !(e'- a$%(' Va*$e "!# m!ne- a$%('H 'ehn(5$e a(m) a'

*en%(n+ a))$#ane 'ha' e!n!m-, e""((en- an% e""(a- hae een ah(ee%

(n 'he '#an)a'(!n) "!# 4h(h e&en%('$#e ha) een (n$##e% !# #een$e

!**e'e% () $)$a**- a&&*(e%. The )ame ana*!+-, 4('h m!%("(a'(!n) '! 'he

(n(&*e) !" !(e'- !" &$*( "(nane, a&&*(e% (n "!#en)( a$%(' '!

e)'a*()h "#a$%$*en' (n'en'(!n) (" an-, !n 'he &a#' !" 'he mana+emen'.

F(nan(a* "#a$%) a#e #e)$*') !" 4a)'e"$*, $n4a##an'e% an% $n"#$('"$*

e&en%('$#e !# %(e#)(!n !" "$n%) - 'he (ne)'(+a'e% en'('- '! an!'he# en'('-.

1.= TES OF IN7ESTIGATION IN FORENSIC AUDITINGThe "!#en)( a$%('!# !$*% e a)/e% '! (ne)'(+a'e man- %(""e#en' '-&e) !"

"#a$%. I' () $)e"$* '! a'e+!#(e) 'he)e '-&e) (n'! 'h#ee +#!$&) '! !(%e an !e#(e4

!" 'he 4(%e #an+e !" (ne)'(+a'(!n) 'ha' !$*% e a##(e% !$'. The 'h#ee a'e+!#(e)

!" "#a$%) a#e !##$&'(!n, a))e' m()a&!(a'(!n an% "(nan(a* )'a'emen' "#a$%.

1.=.1 C%rr'$i%!

The#e a#e 'h#ee '-&e) !" !##$&'(!n "#a$% !n"*(') !" (n'e#e)', #(e#- an%

e'!#'(!n. Re)ea#h )h!4) 'ha' !##$&'(!n () (n!*e% (n a#!$n% !ne 'h(#% !" a**

"#a$%). In !n"*(' !" (n'e#e)' "#a$%, 'he "#a$%)'e#) ee#' 'he(# (n"*$ene '! ah(ee a

&e#)!na* +a(n 4h(h %e'#(men'a**- a""e') 'he !m&an-. The "#a$%)'e#) ma- n!'

ene"(' "(nan(a**-, $' #a'he# #ee(e an $n%()*!)e% &e#)!na* ene"(' a) a #e)$*' !"

'he )('$a'(!n. F!# eam&*e a mana+e# ma- a&!e 'he e&en)e) !" an em&*!-ee

4h! () a*)! a &e#)!na* "#(en% (n !#%e# '! ma(n'a(n 'ha' "#(en%)h(&, een (" 'he

e&en)e) a#e (na$#a'e.

B#(e#- () 4hen m!ne- !# )!me'h(n+ e*)e !" a*$e () !""e#e% (n !#%e# '!

(n"*$ene a )('$a'(!n.

E'!#'(!n () 'he !&&!)('e !" #(e#- an% ha&&en) 4hen m!ne- () %eman%e%

#a'he# 'han !""e#e% (n !#%e# '! )e$#e a &a#'($*a# !$'!me.


19/26

19

1.=., A&&e$ >i&r%ri$i%!

B- "a# 'he m!)' !mm!n "#a$%) a#e 'h!)e (n!*(n+ a))e' m()a&!(a'(!n),

an% 'he#e a#e man- %(""e#en' '-&e) !" "#a$% 4h(h "a** (n'! 'h() a'e+!#-. The

!mm!n "ea'$#e () 'he 'he"' !" a)h !# !'he# a))e') "#!m 'he !m&an- "!# eam&*e7

Cash theft: Th() () 'he )'ea*(n+ !" &h-)(a* a)h, "!# eam&*e &e''- a)h,

"#!m 'he em()e) !" a !m&an-.

Fraudulent disbursements: C!m&an- "$n%) e(n+ $)e% '! ma/e "('('(!$)

&a-men'). C!mm!n eam&*e) (n*$%e (**(n+ )heme), 4he#e &a-men') a#e ma%e

'! a "('('(!$) em&*!-ee !"'en /n!4n a) +h!)' em&*!-ee).

Inventory frauds: The 'he"' !" !m&an- +!!%), )'!/), !e# an%

$n%e#a*$a'(!n !" a))e') an% *(a(*('(e). Misuse of assets: Th() () a a)e !" em&*!-ee) $)(n+ !m&an- a))e') "!# 'he(#

!4n &e#)!na* (n'e#e)'.

1.=.3 Fi!!ci S$$e>e!$ Fr'".

Th() () a*)! /n!4n a) "#a$%$*en' #e&!#'(n+ an% () a '-&e !" "#a$% 'ha' a$)e)

a ma'e#(a* m())'a'emen' (n 'he "(nan(a* )'a'emen'). I' an (n*$%e %e*(e#a'e

"a*)("(a'(!n !" a!$n'(n+ #e!#%), !m())(!n !" '#an)a'(!n), a*ane) !#

%()*!)$#e) "#!m 'he "(nan(a* )'a'emen'), !# 'he m()a&&*(a'(!n !" "(nan(a*

#e&!#'(n+ )'an%a#%). Th() () !"'en a##(e% !$' 4('h 'he (n'en'(!n !" e)en'(n+ 'he

"(nan(a* )'a'emen') 4('h a &a#'($*a# (a), "!# eam&*e !nea*(n+ *(a(*('(e) (n

!#%e# '! (m!e an- ana*-)() !" *(5$(%('- an% +ea#(n+.

1.10 IGLIGTS OF SOME COMANIES (ERE FORENSIC

IN7ESTIGATION AS TA4EN LACE.

1.10.1 E!r%! Sc!" ?,001@

En#!n 4a) a )$e))"$* ene#+- !m&an- e)'a*()he% (n 1


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(n#ea)e%, )! %(% (') !##$&'(!n. Th#!$+h 'he 1


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h#!n(a**- (**(5$(%, 4('h 'he #ee*a'(!n 'ha' 'he- ha% *a#+e*- e#!%e% 'he(#

)ha#eh!*%e#) "$n%) an% a'(a**- #eahe% a** 'he #a'(!) (n an/(n+. CBN

$n"!*%e% 'he *()' !" %e'!#) !m()(n+ !m&an(e) an% 'he(# %(#e'!#) 4h! )e$#e%

*!an) 4!#'h N?=? (**(!n "#!m 'he a""e'e% an/).

The 5$e)'(!n )'(** a4a('(n+ an)4e#) #ema(n 'ha' )!me a$%('!#) a&!e%

'he)e an/) "(nan(a*) 4h(h 4e#e e)en'e% '! )ha#eh!*%e#) a' 'he ann$a* +ene#a*

mee'(n+), #e"$)(n+ '! %()*!)e 'he(# %e' &!#'"!*(!. ha' a m()(n"!#ma'(!n (e

4a'e# h!$)e !!&e#) an% A/(n'!*a (**(am) De**(!''e a#e 'he a$%('!#) !" 'he "(e

'#!$*e% an/).

@$e)'(!n) 4e#e e(n+ #a()e% a!$' 'he(# a!$n'an') !m&e'ene an% (n'e+#('-,

a&a#' "#!m %!$') !n 'he ea' )'an%a#%) !" !#&!#a'e +!e#nane. Be"!#e 'he CBNann!$ne% (') "(n%(n+) !n 'he !n%('(!n) !" 'he "(e an/) an% 'he(# a'(('(e) (n 'he

E&an%e% D()!$n' (n%!4 ED, 'he(# a$%('!#) 4e#e $na*e '! !&e#*-

)#$'(n(e an% #(n+ '! &$*( %!ma(n 'he '#$e )'a'e !" 'he)e #e&!#') (n*$%(n+ 'he(#

*!an) &!#'"!*(! 4h(h CBN n!4 &$' a' N2.: '#(**(!n.

1.10. C"-'r;

The ee$'(e) !" Ca%$#- 4e#e a$)e% !" *!a'(n+ 'he !m&an-) a!$n'

'! %ee(e (ne)'!#), 4h(*e e)en'(n+ (' a) a e#- hea*'h- )'!/. The ee$'(e)

4e#e "(#)' )$)&en%e% '! "!#e)'a** an- a''em&') '! 3e!&a#%(e 'he !n+!(n+ en5$(#-

(n'! 'he !m&an(e) "(nan(a* m())'a'emen'.

P#(e a'e# ;!$)e C!!&e#) 4e#e #!$+h' (n '! #e7a$%(' 'he "(#m an% 'he-

)$m(''e% (') #e&!#', )h!4(n+ a h!*e !" a!$' N19 (**(!n (n 'he !!/) !" 'he

!m&an-, a&a#' "#!m 'ha' (' 4a) a'$a**- (n a *!)) &!)('(!n #a'he# 'han 'he

)!$n%ne)) &!#'#a-e% - 'he e#)'4h(*e mana+e#). A/(n'!*a (**(am), Ca%$#-)

e'e#na* a$%('!#) 4e#e "(ne% N20 m(**(!n "!# (') "a(*$#e '! han%*e 'he a!$n') !"

'he !m&an- 4('h h(+h *ee* !" !"e))(!na* %(*(+ene.

;!4ee#, 'he &$#)$(' !" 'he)e #e"!#m) +ae #()e '! )$h mea)$#e) (n

+!e#nmen', a) 'he "a)h(!n(n+ !" 'he F()a* Re)&!n)((*('- B(**, (m&*emen'a'(!n !"

'he ne4 !(* an% +a) $n(', &a#a)'a'a*) )$&&!#' $n(', 'he )e''(n+ $& !" E!n!m( an%


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F(nan(a* C#(me) C!mm())(!n EFCC, 'he In%e&en%en' an% C!##$&' P#a'(e)

C!mm())(!n ICPC an% 'he N(+e#(an E'#a'(e In%$)'#(e) T#an)&a#en- In('(a'(e

NEITI.

1.11 STES IN CONDUCTING AN IN7ESTIGATION IN FORENSIC AUDIT

The !e)) !" !n%$'(n+ a "!#en)( (ne)'(+a'(!n (), (n man- 4a-), )(m(*a#

'! 'he !e)) !" !n%$'(n+ an a$%(', $' 4('h )!me a%%('(!na* !n)(%e#a'(!n). The

a#(!$) )'a+e) a#e #(e"*- %e)#(e% e*!4

STE 1: Acce$i!* $)e I!ve&$i*$i%!

The "!#en)( a!$n'an' m$)' (n('(a**- !n)(%e# 4he'he# 'he(# "(#m ha) 'he

nee))a#- )/(**) an% e&e#(ene '! ae&' 'he 4!#/. F!#en)( (ne)'(+a'(!n) a#e)&e(a*()' (n na'$#e, an% 'he 4!#/ #e5$(#e) %e'a(*e% /n!4*e%+e !" "#a$%

(ne)'(+a'(!n 'ehn(5$e) an% 'he *e+a* "#ame4!#/. Ine)'(+a'!#) m$)' a*)! hae

#ee(e% '#a(n(n+ (n (n'e#(e4 an% (n'e##!+a'(!n 'ehn(5$e), an% (n h!4 '! ma(n'a(n

'he )a"e $)'!%- !" e(%ene +a'he#e%. A%%('(!na* !n)(%e#a'(!n) (n*$%e 4he'he#

!# n!' 'he (ne)'(+a'(!n () e(n+ #e5$e)'e% - an a$%(' *(en'. I" (' (), 'h() &!)e)

e'#a e'h(a* 5$e)'(!n), a) 'he (ne)'(+a'(n+ "(#m 4!$*% e &!'en'(a**- e&!)e% '!

)e*"7#e(e4, a%!a- an% mana+emen' 'h#ea') '! !3e'(('-. Un*e)) #!$)'

)a"e+$a#%) a#e &$' (n &*ae, 'he "(#m )h!$*% n!' !(%e a$%(' an% "!#en)(

(ne)'(+a'(!n )e#(e) '! 'he )ame *(en'. C!mme#(a* !n)(%e#a'(!n) a#e a*)!

(m&!#'an', an% a h(+h "ee *ee* )h!$*% e ne+!'(a'e% '! !m&en)a'e "!# 'he

)&e(a*()' na'$#e !" 'he 4!#/, an% 'he *(/e*- (n!*emen' !" )en(!# an% e&e#(ene%

meme#) !" 'he "(#m (n 'he (ne)'(+a'(!n.

STE ,: !!i!* $)e I!ve&$i*$i%!

The (ne)'(+a'(n+ 'eam m$)' a#e"$**- !n)(%e# 4ha' 'he- hae een a)/e% '!

ah(ee an% &*an 'he(# 4!#/ a!#%(n+*-. The !3e'(e) !" 'he (ne)'(+a'(!n 4(**

(n*$%e (%en'("-(n+ 'he '-&e !" "#a$% 'ha' ha) een !&e#a'(n+, h!4 *!n+ (' ha) een

!&e#a'(n+ "!#, an% h!4 'he "#a$% ha) een !nea*e% (%en'("-(n+ 'he "#a$%)'e#)

(n!*e% 5$an'("-(n+ 'he "(nan(a* *!)) )$""e#e% - 'he *(en' +a'he#(n+ e(%ene '!


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e )$""e#e% - !ee%(n+) !(%(n+ a%(e '! een' 'he #e!$##ene !" 'he

"#a$%.

The (ne)'(+a'!#) )h!$*% a*)! !n)(%e# 'he e)' 4a- '! +a'he# e(%ene 'he

$)e !" !m&$'e# a))()'e% a$%(' 'ehn(5$e), "!# eam&*e, () e#- !mm!n (n "#a$%

(ne)'(+a'(!n).

STE 3: G$)eri!* Evi"e!ce

In !#%e# '! +a'he# %e'a(*e% e(%ene, 'he (ne)'(+a'!# m$)' $n%e#)'an% 'he

)&e("( '-&e !" "#a$% 'ha' ha) een a##(e% !$', an% h!4 'he "#a$% ha) een

!mm(''e%. The e(%ene )h!$*% e )$""((en' '! $*'(ma'e*- !e 'he (%en'('- !"

'he "#a$%)'e#), 'he mehan() !" 'he "#a$% )heme, an% 'he am!$n' !" "(nan(a*

*!)) )$""e#e%. I' () (m&!#'an' 'ha' 'he (ne)'(+a'(n+ 'eam () )/(**e% (n !**e'(n+e(%ene 'ha' an e $)e% (n a !$#' a)e an% (n /ee&(n+ a *ea# ha(n !" $)'!%-

$n'(* 'he e(%ene () e)en'e% (n !$#'. I" an- e(%ene () (n!n*$)(e !# 'he#e a#e

+a&) (n 'he ha(n !" $)'!%-, 'hen 'he e(%ene ma- e ha**en+e% (n !$#', !# een

e!me (na%m())(*e. Ine)'(+a'!#) m$)' e a*e#' '! %!$men') e(n+ "a*)("(e%,

%ama+e% !# %e)'#!-e% - 'he )$)&e').

E(%ene an e +a'he#e% $)(n+ a#(!$) 'ehn(5$e) )$h a) 'e)'(n+ !n'#!*)

'! +a'he# e(%ene 4h(h (%en'("(e) 'he 4ea/ne))e), 4h(h a**!4e% 'he "#a$% '! e

&e#&e'#a'e% $)(n+ ana*-'(a* !e%$#e) '! !m&a#e '#en%) !e# '(me !# '! !(%e

!m&a#a'(e e'4een %(""e#en' )e+men') !" 'he $)(ne)) a&&*-(n+ !m&$'e#

a))()'e% a$%(' 'ehn(5$e), "!# eam&*e '! (%en'("- 'he '(m(n+ an% *!a'(!n !"

#e*ean' %e'a(*) e(n+ a*'e#e% (n 'he !m&$'e# )-)'em %()$))(!n an% (n'e#(e4)

4('h em&*!-ee) )$)'an'(e 'ehn(5$e) )$h a) #e!n(*(a'(!n), a)h !$n') an%

#e(e4) !" %!$men'a'(!n.

The $*'(ma'e +!a* !" 'he "!#en)( (ne)'(+a'(!n 'eam () '! !'a(n a !n"e))(!n

- 'he "#a$%)'e#, (" a "#a$% %(% a'$a**- !$#. F!# 'h() #ea)!n, 'he (ne)'(+a'!#) a#e

*(/e*- '! a!(% %e*(e#a'e*- !n"#!n'(n+ 'he a**e+e% "#a$%)'e#) $n'(* 'he- hae

+a'he#e% )$""((en' e(%ene '! e'#a' a !n"e))(!n. The (n'e#(e4 4('h 'he )$)&e'

() a #$(a* &a#' !" e(%ene +a'he#e% %$#(n+ 'he (ne)'(+a'(!n.


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STE : Re%r$i!*

The *(en' 4(** e&e' a #e&!#' !n'a(n(n+ 'he "(n%(n+) !" 'he (ne)'(+a'(!n,

(n*$%(n+ a )$mma#- !" e(%ene an% a !n*$)(!n a) '! 'he am!$n' !" *!))

)$""e#e% a) a #e)$*' !" 'he "#a$%. The #e&!#' 4(** a*)! %()$)) h!4 'he "#a$%)'e# )e'

$& 'he "#a$% )heme, an% 4h(h !n'#!*), (" an- 4e#e (#$men'e%. I' () a*)! *(/e*-

'ha' 'he (ne)'(+a'(e 'eam 4(** #e!mmen% (m!emen') '! !n'#!*) 4('h(n 'he

!#+an(a'(!n '! een' an- )(m(*a# "#a$%) !$##(n+ (n 'he "$'$#e.

STE 5: C%'r$ r%cee"i!*&

The (ne)'(+a'(!n () *(/e*- '! *ea% '! *e+a* !ee%(n+) a+a(n)' 'he )$)&e'

an% meme#) !" 'he (ne)'(+a'(e 'eam 4(** !a*- e (n!*e% (n an- #e)$*'an'

!$#' a)e. The e(%ene +a'he#e% %$#(n+ 'he (ne)'(+a'(!n 4(** e e)en'e% a'!$#', an% 'eam meme#) ma- e a**e% '! !$#' '! %e)#(e 'he e(%ene 'he- hae

+a'he#e% an% '! e&*a(n h!4 'he )$)&e' 4a) (%en'("(e%. I' () (m&e#a'(e 'ha' 'he

meme#) !" 'he (ne)'(+a'(e 'eam a**e% '! !$#' an e)en' 'he(# e(%ene *ea#*-

an% !"e))(!na**-, a) 'he- ma- hae '! )(m&*("- !m&*e a!$n'(n+ ())$e) )! 'ha'

n!n7a!$n'an') (n!*e% (n 'he !$#' a)e an $n%e#)'an% 'he e(%ene an% (')

(m&*(a'(!n.

1.1, CONCLUSION

The#e () n! +a(n)a-(n+ 'he "a' 'ha' !$# a$%(') a) $##en'*- ee$'e% an%

#e&!#'e% %! #(n+ !$' (n a 4ea*'h !" %e'a(*, (n)'ane) !" (n%((%$a* !# )-)'ema'(

"#a$% an% !##$&'(!n. The#e (), h!4ee#, a nee% '! !(%e a !mehen)(e

"#ame4!#/ (n!*(n+ 'he $)e !" F!#e)een A$%('(n+ Me'h!%!*!+-, &a#'($*a#*- (n 'he

a#ea) !" a$%(' &*ann(n+ an% ee$'(!n, an% "!# a $n("!#m #e&!#'(n+ a'(e 'ha'

4!$*% e#- e&*(('*- )&e** !$' 'he (m&*(a'(!n) !" !n'#!* "a(*$#e) (n*$%(n+ "a(*$#e

!" )en(!# mana+emen' (n (m&*emen'(n+ e)#(e% !n'#!*).

Th() !$*% !e# a &e#(!% !" '(me a))$a+e &$*( !ne#n a!$' 'he e()'ene

!" )-)'ema'( a$%(' !&e#a'(!n) a%%#e))e% &a("()'(a**- '! $nea#'h "#a$% an%

!##$&'(!n.


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F!#en)( a$%('(n+ !m(ne) *e+a*('(e) a*!n+7)(%e 'he 'ehn(5$e) !" !(e'-

VFM a$%(', #e+$*a#('-, (ne)'(+a'(e, an% "(nan(a* a$%('). The ma(n a(m () '! "(n%

!$' 4he'he# !# n!' '#$e $)(ne)) a*$e ha) een #e"*e'e% (n 'he "(nan(a* )'a'emen')

an% 4he'he# an- "#a$% ha) 'a/en &*ae.

In )$mma#-, a "!#en)( (ne)'(+a'(!n () a e#- )&e(a*()' '-&e !" en+a+emen',

4h(h #e5$(#e) h(+h*- )/(**e% 'eam meme#) 4h! hae e&e#(ene n!' !n*- !"

a!$n'(n+ an% a$%('(n+ 'ehn(5$e), $' a*)! !" 'he #e*ean' *e+a* "#ame4!#/.

The#e a#e n$me#!$) %(""e#en' '-&e) !" "#a$% 'ha' a "!#en)( a!$n'an' !$*%

e a)/e% '! (ne)'(+a'e. The (ne)'(+a'(!n () *(/e*- '! $*'(ma'e*- *ea% '! *e+a*

!ee%(n+) a+a(n)' !ne !# )ee#a* )$)&e'), an% meme#) !" 'he (ne)'(+a'(e 'eam

m$)' e !m"!#'a*e 4('h a&&ea#(n+ (n !$#' '! e&*a(n h!4 'he (ne)'(+a'(!n 4a)!n%$'e%, an% h!4 'he e(%ene ha) een +a'he#e%. F!#en)( a!$n'an') m$)'

'he#e"!#e #ee(e )&e(a*()' '#a(n(n+ (n )$h ma''e#) '! en)$#e 'ha' 'he(# #e%((*('-

an% !"e))(!na*()m ann!' e $n%e#m(ne% %$#(n+ 'he *e+a* !e)).


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REFERENCES

Cha''e#3( A.N. 1

53009045 Msc Accounting Seminar Paper on Forensic Audit

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Transcript of 53009045 Msc Accounting Seminar Paper on Forensic Audit