ACCOUNTING INFORMATION SYSTEM TECHNIQUES AND FRAUD PREVENTION IN NIGERIAN BUSINESS ORGANISATION

The basic task of both accounting and the accounting information system in a business enterprise is to ensure sufficient information required by statutory regulations for the requirements of the tax administration, various statistics, and executives/managers when making decisions at all levels while at the same time reducing or preventing fraud or related practices. The accounting information from the accounting information system (AIS) helps managers at all levels in business organizations to determine and manage all problems in the process of achieving organizational goals. The information from the accounting information system helps them in all four stages of problem-solving and decision-making (i.e., recognize the problem, identify alternatives, evaluate the alternatives, and make the decision). Accounting captures and records the financial effects of transactions. The accounting also distributes transaction information to operations personnel to coordinate many of their daily key tasks. In addition to employees, managers, and shareholders, the operation of a business enterprise is also significant for the customers, suppliers, tax administration, and other authorities. Each of the above users has specific areas of interest in the operation of an enterprise, and they all use information obtained from the accounting information system. In short, the accounting information system(AIS) produce information for internal and external users so as to prevent fraudulent practices. The widespread frauds in modern organizations have made traditional auditing and investigation inefficient and ineffective in the detection and prevention of the various types of frauds confronting businesses world-wide. (Onuorah and Appah, 2012) The incidence of fraud continues to increase across private and public sector organizations and across nations. Fraud is a universal problem as no nations is resistant, although developing countries and their various states suffer the most pain. Today; modern organized financial crimes have appeared. Financial crimes such as employee theft, payroll frauds, fraudulent billing systems, management theft, corporate frauds, insurance fraud, embezzlement, bribery, bankruptcy, security fraud (EFCC, 2004), among others, have taken the centre stage in the scheme of things; and on the scale of private, public and governmental preference. Financial crimes today have grown wild, and the emergence of computer software coupled with the advent of internet facilities has compounded the problem of financial crimes. Besides, the detection or minimization of these crimes are made more difficult and committing these crimes much easier. (Izedonmi, and Ibadin, 2012). All these, no doubt, remain outside the ambit of the statutory auditor to report on except he is placed on inquiry. The statutory auditor is not primarily bound to detect fraud and errors. His responsibility is defined by Sec. 359 (CAMA, 2004) and the relevant auditing standards. (Uwojori and Asaolu, 2009) added that quite unfortunately, is the inability of the statutory auditor constrained by the relevant statutes and standards, to deal with financial crimes. Okunbor and Obaretin (2010) reported that the spates of corporate failures have placed greater responsibility and function on accountants to equip themselves with the skills to identify and act upon indicators of poor corporate governance, mismanagement, frauds and other wrong doings. It has become imperative for accountants at all levels to have the requisite skills and knowledge for identifying, discovering as well as preserving the evidence of all forms of irregularities and fraud. Therefore, fraud requires more sophisticated approach from preventative to detection. One of the modern approaches that can be used from the prevention to detection is called forensic accounting. Forensic accounting is a rapidly growing field of accounting that describes the engagement that results from actual or anticipated dispute or litigations. (Okoye and Gbegi, 2013) concur that “Forensic” means “suitable for use in a court of law”, and it is to that standard that Forensic Accountants generally work. Forensic Accounting is an investigative style of accounting used to determine whether an individual or an organization has engaged in any illegal financial activities. Professional Forensic Accountant may work for government or public accounting firm. Although, forensic accounting has been in existence for several decades, it has evolved over time to include several types of financial information scrutiny. Forensic accounting can, therefore, be seen as an aspect of accounting that is suitable for legal review and offering the highest level of assurance (Apostolou, Hassell & Webber, 2000). Also, forensic accounting encompasses three major areas, investigation, dispute resolution and litigation support. Manning (2002) defines it as the combination of accounting, auditing and investigative skills to standard by the courts to address issues in dispute in the context of civil and criminal litigation. Ojaide (2000) noted that there is an alarming increase in the number of fraud and fraudulent activities in Nigeria, requiring the visibility of forensic accounting services. Also the recent happening in the forensic audit of the oil sector where the present government is demanding for another forensic audit exercises to be carried out after a Nigerian audit firm has presented a report to the authority. In the light of the above this study therefore looks into the relevance of forensic accounting and fraud management in the effective reduction of fraudulent practices in Nigeria. 

1.2  STATEMENT OF THE PROBLEM 

In recent times, series of fraud have been committed both in the public sector and private sector of the economy. These in no doubt are perpetrated under the supervision of the internal auditors of the organization. Ojaide (2000) added that there is an alarming increase in the number of fraud and fraudulent activities in Nigeria emphasizing the visibility of forensic accounting services. Okoye and Akamobi (2009) Owojori and Asaolu (2009), Izedomin and Mgbame ( 2011), Kasum (2009) have all acknowledge in their separate works, the increasing incidence of fraud and fraudulent activities in Nigeria and these studies have argued that in Nigeria, financial fraud is gradually becoming a normal way of life. (Modugu and Anyaduba 2013) submitted that financial irregularities have becomes the specialty of both private and public sector in Nigeria as individual perpetrates fraud and corrupt practice according to the capacity of their office. Consequently, there is a general expectation that forensic accounting may be able to stem the tide of financial malfeasance witnessed in most sectors of the Nigerian economy. However, there has not been adequate emphasis, especially survey evidence on how forensic accounting can help curtail financial and economic crimes beyond the several unreliable views that abound. Consequently, the study fills this gap of forensic accounting and fraud management evident from Nigeria. 

The major aim of the study is to examine accounting information system techniques and fraud prevention in Nigeria business organization. Other specific objectives of the study include; 

1. To examine the need for an effective and robust accounting information system in Nigerian business organization. 

2. To determine the level of fraud in Nigerian business organization. 

3. To assess the level of accounting information system used in business organizations in Nigeria. 

4. To examine the relationship between accounting information techniques and fraud prevention in Nigerian business organizations. 

5. To recommend other ways of improving fraud prevention in Nigerian business organization. 

1.4  RESEARCH QUESTIONS 

1. What is the need for an effective and robust accounting information system in Nigerian business organization? 

2. What is the level of fraud in Nigerian business organization? 

3. What is the level of accounting information system used in business organizations in Nigeria? 

4. What is the relationship between accounting information techniques and fraud prevention in Nigerian business organizations? 

5. What are the other ways of improving fraud prevention in Nigerian business organization? 

1.5  RESEARCH HYPOTHESIS 

H0: There is no significant relationship between accounting information system techniques and fraud prevention in Nigeria business organizations. 

H1: There is significant relationship between accounting information system techniques and fraud prevention in Nigeria business organizations. 

1.6  SIGNIFICANCE OF THE STUDY 

This study would be of immense benefit to business owners and related stakeholders as it would reveal the relationship between techniques of accounting information system and fraud prevention in Nigerian business. The study would also benefit students, researchers and scholars who are interested in developing a further study on the subject matter. 1.7  SCOPE AND LIMITATION OF THE STUDY 

This study is restricted to accounting information system techniques and fraud prevention in Nigerian business organizations using business in Lagos state as the case study. 

1.8  LIMITATION OF THE STUDY 

Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview). 

Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.