Forensic Accounting Expertise, Risk Management and Financial Performance in Deposit Money Banks in Nigeria
Aruna Ishola MAMIDU
Department of Accounting, College of Social and Management Sciences, Achievers University, Owo, Ondo State, Nigeria.
Adigun Bilik Abiola *
Department of Accounting, College of Social and Management Sciences, Achievers University, Owo, Ondo State, Nigeria.
Timothy AROWOSEGBE
Department of Accounting, College of Social and Management Sciences, Achievers University, Owo, Ondo State, Nigeria.
Roseline Funmi FABAYO
Department of Accounting, College of Social and Management Sciences, Achievers University, Owo, Ondo State, Nigeria.
*Author to whom correspondence should be addressed.
Abstract
Banking sector financial performance is affected by external shocks like inflation, interest rate, and geopolitical risks to financial distortions created by inefficient financial reporting and misuse of resources. Therefore, the study examined the relationship between forensic accounting expertise, risk management, and financial performance of deposit money banks in Nigeria. The study specifically, examine the effect of risk identification and assessment on financial performance of deposit money banks in Nigeria; assess the influence of accounting experts in formulating and executing plans to mitigate risks on financial performance of deposit money banks in Nigeria; and determine the effect of accounting knowledge in identifying and measuring risks on financial performance of deposit money banks in Nigeria. The study adopted a combination of survey and ex post facto research designs to examine the impact of forensic accounting expertise on risk management and financial performance of deposit money banks in Nigeria. Using census and purposive sampling techniques, 60 accountants working in the banking industry in Akure, Ondo State were selected for the study. The study used structured questionnaires and analyzed their results through multiple regression analysis. The result shows that risk mitigation, β = 0.2972, p = .0168; and stakeholder decision making, β = 0.2573, p = 0.0315 have a positive and significant impact on financial performance. On the other hand, risk identification and assessment (β = 0.1452, p = 0.2603) was not statistically significant, indicating that simply identifying the risk is not sufficient in the absence of action taken when it comes to issues of financial risk control. The study concluded that there is need to transition from being passively merely identifying risks to more affirmative, formalized means of addressing risk. The study recommended that forensic accounting should be done as part of preventative measures, involving stakeholders more in decision making process, and customizing the forensic techniques to align with the banks’ operational and regulatory guidelines.
Keywords: Forensic accounting, deposit money banks, financial performance, risk management, stakeholder decision-making