Forensic Accounting Technique and Financial Statements Fraud in Microfinance Banks in Nigeria

Financial statement fraud has been a threat over decades in the corporate world. It has ruined giant companies. Microfinance banks were not spared from the menace. The solution has been elusive. Will the adoption of forensic accounting techniques be a solution? This study titled forensic accounting technique and financial statements fraud in microfinance banks in Nigeria. The forensic accounting proxies were anonymous communication, ratio analysis, inspection and control, and fraud risk assessment, while the proxies of financial statement fraud were financial record manipulation, and abuse of creative accounting. A survey questionnaire was administered to 225 subjects drawn using stratified random sampling from the six geopolitical zones in Nigeria. The study deployed descriptive statistics, mean, standard deviation, and inferential statistics, ANOVA, factor, and regression analyses. The respondents showed a strong agreement that financial statement fraud manifested in financial records manipulation and abuse of creative accounting, also a strong agreement that deployment of forensic accounting techniques curbed financial statements fraud in microfinance banks in Nigeria. The study showed a negative statistically significant relationship between forensic accounting techniques and financial statement fraud. The findings were useful for policy makers, regulators, supervisors, management of microfinance banks, and forensic students. Forensic accounting techniques like anonymous communication, ratio analysis, inspection and observation, and fraud risk assessment curbed financial statement fraud in microfinance banks. The study incorporated ethics throughout, and formal consent was obtained from the subjects. The deployment of forensic accounting techniques in regulatory guidelines, audit manual, and enterprise risk management framework tamed financial statements fraud in microfinance banks in Nigeria.