1 Gusau Journal of Accounting and Finance (GUJAF) Vol. 2 Issue 4, October, 2021 ISSN: 2756-665X A Publication of Department of Accounting and Finance, Faculty of Management and Social Sciences, Federal University Gusau, Zamfara State -Nigeria 2 FINANCIAL FORENSIC ANALYSIS AND FRAUD DETERRENCE IN LISTED DEPOSIT MONEY BANKS IN NIGERIA Daniel Nduka Anowu Department of Accounting Faculty of Management Sciences Nigerian Defense Academy, Kaduna. danielanowu@yahoo.com TerzungweNyor Department of Accounting Faculty of Management Sciences Nigerian Defence Academy terzungwenyor@gmail.com Samuel EniolaAgbi Department of Accounting Faculty of Management Sciences Nigerian Defence Academy samagbi@yahoo.com AnowuIfeanyinchukwu Nelson Accountancy Department Enugu State University of Science and Technology anowunelson07@gmail.com Adebola Naomi Saliu Department of Economics Faculty of Management Sciences Nigerian Defence Academy saliu.adebola@yahoo.com Abstract This study was carried out to investigate how financial forensics, influences fraud deterrence in the listed deposit money banks in Nigeria. A total number of 619 top management staff from the antifraud department, internal control department, compliance unit and the internal audit department of the deposit money banks (DMBs) listed on the floor of the Nigerian stock exchange as at the 31 st of December 2020 were considered for this study. Since this study indicated the cumulative impact of the independent variables against the dependent variable, multiple regression was considered to be the most appropriate form of data analysis. The Adjusted R 2 was 0.51, indicating that the financial forensics variables (investigative accounting service, litigation support service and expert witness) can explain 51% of changes in fraud deterrence by Nigeria's listed deposit money banks. The Fstat-chi2 value of the model was 76.80, with a P-value of 0.000. This study recommends that listed deposit money banks should engage mailto:danielanowu@yahoo.com mailto:samagbi@yahoo.com mailto:anowunelson07@gmail.com 3 in financial forensics, which will ensure an unbiased workplace inquiry and interrogation in suspicions of wrongdoings, or discovery of fraud, not minding the magnitude, position, individual or group of individuals involved. Keywords: Expert Witness, Financial Forensics, Fraud, Investigation, Litigation Support. 1. Introduction When a company's fraud attempts suddenly increase, it's called a fraud 'earthquake.' These earthquakes have the potential to destroy a company's reputation with consumers while also stealing revenue from organizations. In recent years, the frequency and severity of fraud attacks have increased. Fraud leads to reputational harm, loss of client confidence, and regulatory violation. The Association of Certified Fraud Examiners (ACFE, 2020) stated that one of the costliest forms of financial crime is the fraud committed by individuals against the organizations that employs them. The intentional and premeditated use of one's position for self-enrichment through conscious mis-use and misappropriation of resources and assets of the employing firm, is likely to have huge impact on the organization. According to the Corporate Finance Institute (CFI) Top Accounting Scandals 2021, the past decade has recorded notable corporate fraud scandals such as the Enron bankruptcy (2001), WorldCom fraud (2002), the Lehman Brothers (2008), and Bernard Madoff's $65 billion Ponzi scam (2009), all in the United States of America (CFI, 2020). Also, Cable News Network (CNN, 2019) reported the case of Capital One Bank (2019), which had more than 100 million credit card applications and customer accounts compromised. In Africa, there’s the case of Steinhoff (2019), where PricewaterhouseCoopers (PwC) carried out an investigation and discovered $7.4 billion accounting fraud. When fraud is suspected or identified in an organization, investigative accounting services are expected to be embarked upon. Investigative services can help in conducting interviews, record reviews, and evidence collection. Additionally, when whistle blowers signal unethical behaviors and suspected wrong dealings, immediate punishable or legal actions are to be taken. When no litigation process is designed to help businesses, and when no form of investigation is carried out after a fraudulent act, organizations will not be able to build a strong case and present meaningful evidence in court. Most times, evidences gathered aren’t sufficient enough to punish a perpetrator, an expert in accounting or fraud matters may be involved to help build up more evidences. The testimony and knowledge of an expert witness is usually sufficient, causing others to officially and legally rely upon the experts’ witness opinion. The expert opinion may provide more background information and clarifying scientific concepts, while litigation support services and investigations can create a contextual understanding of a fraudulent event that may have aroused within organizations such as banks. As demonstrated by the continuous increase in fraud cases, events of corporate failure have placed greater responsibility on management and accountants to equip themselves with the expertise needed to recognize, act on signs of poor corporate governance, mismanagement, unethical and other wrongdoings. The failure on the part of management, regulators and organizational c-suite in tackling incidences of fraud, puts the credibility of financial statements 4 and corporate governance processes in jeopardy. Accounting professionals, most especially, must possess the necessary expertise and experience needed for detecting, and preserving evidence of all types of financial records, activities and irregularities. In Nigeria, there are some cases of fraud, such as the case reported by the British Broadcasting Corporation (BBC, 2010) of Oceanic Bank (2010), where the guilty party was fined over one hundred and fifty billion naira (N150 billion) for fraud and mismanagement. Also, according to Dailypost.ng, (2019) there is the case of staff fraud in Diamond Bank Nigeria (2019), money laundering offences of the defunct Syke Bank Plc now Polaris Bank, (Daily Trust, 2019), and Zenith Bank (2019) alleged N700 million staff frauds (The Guardian, 2019). All of these fraud cases have occurred despite efforts to ensure that banks adhered adequately to the respective corporate governance policies to protect depositor funds and to protect the banks from distress. Questions are being asked, when fraud is committed by top management, how will it be detected and deterred in the future? Notwithstanding the efforts aimed at preventing fraud in the banking sector in Nigeria, the Nigerian Inter-Bank Settlement System (NIBSS, 2020) ―report on Fraud in the Nigerian Financial Services‖, states that fraud in Nigeria peaked the highest in 2020 with over 180% increase against previous years. Fraudsters attempts increased to 46,126 attacks from 16,128 attempts in 2019 and were successful in 41,979 of the attempts, giving a 91% success rate. The Nigeria financial services firms of which the listed deposit money banks are categorised under, have been reported to have lost 5.2billion naira to fraud between January and September (NBIS, 2020). This reveals that, individual’s no longer need access to a structured organizational building to perpetrate fraud. In light of the aforementioned problems, as well as the many unreliable opinions that abound, the following hypotheses were tested in the null form: H01: Investigative accounting service has no significant effect on fraud deterrence in listed deposit money banks in Nigeria. H02: Litigation support service has no significant effect on fraud deterrence in listed deposit money banks in Nigeria. H03: Expert witness service has no significant effect on fraud deterrence in listed deposit money banks in Nigeria. The result of this research will help shareholders, management and potential investors of listed DMBs in Nigeria in understanding the importance of financial forensics in deterring fraud as this will avail a springboard for growth opportunities in the financial sector. The remainder of this paper is organised and presented as follows: the review of related literature which centres on financial forensics and its components, vis-à-vis Investigative accounting service, litigation support service, expert witness service and the theoretical framework underpinning the study; the research methodology; analysis and discussion of result; conclusion and recommendation. 2. Literature Review Financial forensics otherwise known as forensic accounting, according to Peloubet (1964), is the application of accounting expertise and investigative skills to locate and address legal issues. Financial forensic is the ―application of investigative and analytical skills for the purpose of resolving financial and accounting matters in a way that the outcome can be used in a court of law‖ (Hopwood et al., 2012). Financial forensics (FF) has also been defined as the action of identifying, recording, extracting, sorting, reporting and verifying past financial data or other 5 accounting activities for settling current or prospective legal disputes or using such past financial data for projecting future financial data to settle legal disputes (Oyedokun, 2019). Financial forensics can be classified into three main lines of activities vis-à-vis financial investigative accounting service, litigation support service, expert witness service (Hopwood et al., 2012). According to the corporate finance Institute (CFI 2021), financial investigative service is an aspect of financial forensic that refers to the practical steps’ professional fraud examiners or certified accountants take in order to gather evidence relevant to alleged fraudulent deeds. Investigations are usually carried out, to ascertain who, how, when and where a fraud or error may have occurred and the reason behind such occurrences. The use of advanced forensic skills in carrying out financial investigations in such a way that the results can be used in a court of law is known as investigative accounting service (IAS) (Bassey, 2018). American Bar Association (ABA, 2021) states that litigation support service (LLS) refers to the rules and practices, involved in resolving disputes in the court of law. LSS involves preparing, researching and reviewing litigation documents, which assist lawyers in managing court cases or lawsuits to settle fraud and other related matters (Olowo, 2019). Fraud according to SAS 110 paragraph 4, is defined as the use of deception to obtain unfair or illegal financial advantage and intentionally misrepresentation that affect the financial statement, carried out by one or more individual among manage management, employees or other parties. Corporate frauds refer to political and business scandals that stems from the engagement of malpractices by trusted executives of corporate corporations (Pinkasovitch, 2016). Corporate fraud consists of illegal, unethical and deceptive actions committed either by a company or an individual acting in their capacity as an employee of the company (Olowo 2019). The Economic and Financial Crimes Commission (EFCC, 2004), defines fraud is any non- violent criminal and unauthorized behavior conducted with the aim of unlawfully gaining wealth, either individually or in a collective or coordinated manner, thus breaching established laws regulating the civil and corporate administration's economic activities. Many businesses have been harmed as a result of fraudulent activities, as a result, many aspects of modern society are focused on maintaining an environment of fair dealing and fraud deterrence through the passage of laws, and the establishment of agencies such as the Independent and Corrupt Practices Commission (ICPC) and the EFCC in Nigeria, which are meant to enforce laws through the legal and judicial systems that can help curb the menace of fraud through deterrence, detection or preventive measures. Fraud deterrence according to Cendrowski et al., (2007), is the proactive identification and removal of the casual and enabling factors of fraud. FRD involves acts and processes of discouraging actions or procedures that instills fear, doubt and hesitation which stops fraud from occurring in an organization. In the bank, deterrence is a protective measure that makes bank workers less enthusiastic about doing something wrong by making it unpleasant for the employees by threatening negative consequences. Fraud deterrence being a preventative measure, lowers the number of input variables of fraud's causal and facilitating factors (Cendrowski et al., 2007). 6 Combating fraud before it happens is critical to an organization’s survival. Fraud deterrence is a component of fraud management that sways people away from committing fraud due to the likelihood of detection and punishment (ISA, 240). Fraud deterrence applies to all of the requirements and processes that must be in place to discourage fraud (Cendrowski, 2020). The cost of deterring fraud is a fraction of the cost of detecting and recovering from fraud. Fraud deterrence is a systematic and comprehensive methodology that has been suggested for professionals tasked with the responsibility of fraud management in corporate firms (Skalak &Sellito, 2006; Cendrowski et al 2007). According to Skalak &Sellito, (2006), FD comprises of corporate governance, transaction level controls, whistleblowing, remediation,retrospective examination of an organization’s processes and transactions called the fraud deterrence cycle. Figure 1: The Fraud Deterrence Cycle Source: Skalak, Alas and Sellitto (2006). This paper is anchored on the Dorminey model because the theory closely relates to the objective of this study. The Dorminey model is based on the theory of Fraud Triangle with the addition of interventions between the perpetrator and the crime. Dorminey et al., (2012) published "Evolution of Fraud Theory" in 2012, which juxtaposed the traditional Fraud Triangle with the Triangle of Fraud Action in what has become known as the "meta-model of fraud." Pre-fraud, Interventions, and Post-fraud are the three parts of the model. On the model’s left side, the perpetrator is defined as the initial decision maker, the one who must analyze his or her personal and professional situation, as well as the deterrent, prevention, and detection strategies in place, to determine whether a fraudulent act can be performed and concealed successfully. The model discusses the post-fraud state on the far right, focusing on the basic elements of the fraud or financial crime known as the triangle of fraud intervention, which involves the fraudulent act, attempts to hide the act, and an identification of whether and how profits accrue to the victim, also known as conversion. The act denotes how the crime was carried out, such as embezzlement, check kiting, or materially false financial statements. Concealment refers to the act of making fake journal entries, falsifying bank reconciliations, or deleting files in order to conceal the fraud. The method of transforming ill-gotten profits into something usable by the victim in a way that seems legal is known as conversion. 7 Figure 2: Meta Model (2012) Source: Dorminey et al., Meta Model (2012). Organizational and social interventions, such as internal controls, wider aspects of corporate governance, legal and regulatory environments, and other preventive strategies, stand between the victim and the criminal act, reducing the occurrence and effect of fraudulent actions. Deterrence, prevention, and the understanding of identification have also become key components of these measures. These factors are partially outside the perpetrator's control, but they influence the perpetrator's assessment of the probability of completing and concealing the criminal act. Recent works have attempted to analyze financial forensics and fraud management. Therefore, this paper highlights the results of a few empirical studies. Ehioghiren (2016), investigated financial forensics and fraud management evidenced from Nigeria. Administering 572 questionnaires, the researcher used SPSS 21 to test the hypotheses and to determine the F-value.Findings revealed that financial forensics significantly influences fraud detection and control, and also, there’s a significant difference between the duties of qualified Forensic Accountants and that of traditional External Auditors. Hamdam (2018), studied the role of financial forensics in discovering financial fraud in Philadelphia, Jordan. Simple random sample of 630 accountants were selected randomly from various accounting offices. Differential statistics including t-test and analysis of variance (ANOVA) were used to test the effect of demographic characteristics on the evaluation of financial forensics variables, while linear regression was used to test the effect of financial forensics variables on discovering fraud. Confirmatory factor analysis was used as a tool to figure out the contribution of different items to financial forensics variables and its contribution in discovering fraud. The results showed that financial forensics is an effective tool to find fraud if the general requirements were available to prepare professional forensic accountants. Eme et al., (2016) investigated the effectiveness of the mechanisms of fraud prevention and detection in Nigeria. To achieve the study’s objective, data was collected fro m accounting practitioners in Nigeria through the use of the survey instrument, questionnaire. The result found internal controls, operational audits, and corporate code of audit, financial forensics techniques, and many other fraud prevention and detection mechanisms used in Nigeria. The result of the study, however, revealed that the most effective mechanism is the financial forensics techniques, although the least used in Nigeria. 8 3. Methodology and Variable Measurement Regression was considered to be the most appropriate because the study shows the combined effect of the independent variables (ISS, LSS, and EWS) against the dependent variable (FRD). The research used Statistical Product for Services Solution (SPSS) software to conduct a quantitative data analysis. E-questionnaire was used due to the Covid-19 protocols that were put in place by the Government of the Fedreal Republic of Nigeria, restricting movements and the gathering of individuals in public and corporate places. This study comprised of the banks listed on the floor of the Nigeria stock exchange as at the 31 th of December, 2020. Due to the inability of the researcher to obtain the exact number of the management staff of Ecobank Plc and First Bank plc as at the time of this study, these banks were filtered out. The total population for this study consists of 619 top management staff, disclosed in the annual reports of 12 out of 14 listed deposit money banks considered in this study. Sample size of 242 respondents comprising of the management staff of the internal control department, antifraud unit, internal audit department and the compliance department. Response were gathered using a 5-point Likert scale consisting of strongly agree (SA), agree (A), undecided (UD), disagree (D) and strongly disagree (SD). The Taro Yamane formula was used to calculate the total sample size for this study: ------------------------------------ (1) Where n = Desired sample size N = Population of the study e = precision of sampling error (0.05) Therefore: n = 619 1 + 619 (0.05) 2 -------------------- (2) 619 1 + 1.5475 = 242.9822. However, to compensate for non-response probability; 30% of the sample was added to the study sample to increase the sample base as suggested by Bassey, (2018). Therefore 30% of 242 = 72. Hence the sample size is given as n = 242 + 72 = 314 n = 314. All decimal places were ignored, reason being that scientifically, there’s no such thing as a fractional human being. Table 1: Population and Sample Size S/N BANK NAMES TOP MANAGEMENT (TARGET POPULATION) SAMPLE SIZE ALLOCATION 1 Access bank Plc 60 31 2 FCMB Plc 66 34 3 Fidelity bank Plc 44 22 9 4 GTB Plc 56 28 5 Jaiz Bank 10 5 6 Stanbic IBTC bank 80 40 7 Sterling bank Plc 48 25 8 United Bank for Africa 99 50 9 Union bank Plc 40 20 10 Unity Bank Plc 29 15 11 Wema Bank Plc 28 14 12 Zenith Bank Plc 59 30 TOTAL 619 314 Source:Researcher’s Compilation, 2021 This study adopted the following proxies and regression models from Ehioghiren and Atu (2016), Dada, Owolabi and Okwu (2013). The mathematical expression is given as: Y = f(X) ----------------------------------------------------i Hence, the mathematical expression was substituted to suit this study aas follows: FRD = f(FF)---------------------------------------- ii Where: FF =Financial Forensic FRD = Fraud Deterrence Y = Fraud Deterrence (Dependent Variable) And X = Financial Forensics (Independent Variable) X = (x1, x2, x3,) Where: x1 = Expert Witness SAervice (EWS) x2 = Investigative Accounting Service (ISS) x3 = Litigation Support Service(LSS) Functional Relationship FRD = f(FF)……………………………….………………………….iii FRD = β0 + β1 EWS + β2 ISS + β3 LSS + μ ………….…………….. iv 4. Results and Discussion of Findings The gender, age, educational qualification, professional qualification, and length of service of respondents were stated in the section. Multiple linear regression was used to evaluate hypotheses. 316 questionnaires links were shared, with 242 completed responded to. This equates to 76% response rate. Manning (2010) noted that for analysis and publication, 50% return rates are reasonable, 60% is fine, and 70 % is very good. A response rate of 76 % for this study is deemed appropriate for making inferences and drawing conclusions based on these assertions from renowned scholars. 10 Table 2:Distribution of Questionnaire/Response Rate Categories Frequency Percentage % No of Questionnaires distributed 316 100 No of Questionnaires Returned 242 76.58 No of questionnaire not returned 74 23.41 Invalid questionnaire return 3 0.94 Valid questionnaire return 239 75.63 Source: Field Survey, 2021 As shown in table 2, that the number of questionnaires distributed by the researcher to the respondents’ amounted to 316 questionnaires. Among which, 242 questionnaires replies were returned and the researcher revoked the access to the e-questionnaire link from the google forms. Out of the 242 responses, 239 were valid and used in the analysis, amounting to a total response rate of 75.6%. Analysis of the Variables Table 3:Fraud Deterrence Analysis S/N Items SA(%) A(%) UD(%) D(%) SD(%) 1. Banks have mechanisms that checks against fraud 49.1 47.7 1.4 1.8 - 2. Conducting background checks helps against employing fraudulent individuals 34.5 62.3 .9 1.8 .5 3. Employees are encouraged to report fraud cases 40 57.3 .9 1.8 - 4. Effective monitoring controls identifies red flags 45.9 50.9 1.8 1.4 - 5. Third party like forensic accountants do verify organizations transactions and activities 43.2 52.7 1.8 2.3 - 6. Conviction of perpetrators can discourage fraudulent acts 36.8 60 2.3 .9 - Source: Field Survey, 2021 With respect to Table 3, question 1 relating to fraud deterrence, 49.1% of the respondents strongly agree that banks have an established and functional system which measures and monitors internal control effectiveness and external reporting activities. 47.7% agree with the statement, 1.4% were undecided while the remaining 1.8% disagree. The majority of respondents (96.8%) believed that banks have a well-established and functional framework in place to assess and track internal control effectiveness and external reporting activities. Question 2, revealed that 34.5% of the respondents strongly agree that conducting employees' background checks before recruitment can help against employing fraudulent individuals.62.3% 11 agreed with the claim, 0.9% were undecided.1.8% disagree, while the remaining 0.5% strongly disagree. This revealed that the majority of the respondents (96.9%) were positive that conducting employees' background checks before recruitment could help against employing fraudulent individuals. In addition, Question 3 disclosed that 40% of respondents strongly agree that workers are encouraged to disclose any alleged or observed fraud cases by their colleagues in good faith with valid evidence (i.e., whistleblowing), 57.3 percent agree, 0.9 percent are undecided, and the remaining 1.8 percent disagree to the argument. This revealed that most of the respondents, which account for 97.3%, are of the view that employees are encouraged to report, in good faith with relevant proof of any suspected or observed fraud cases from their peers (i.e. Whistleblowing). On Question 4, 45.9% of the respondents strongly agree that effective monitoring controls and IT gadgets are in place to identify red flags for fraud, should they occur.50.9% agree with the claim, 1.8% were undecided while the remaining 1.4% strongly disagree. This revealed that the majority of the respondents (96.8%) were positive that effective monitoring controls and IT gadgets are in place to identify red flags for fraud, should they occur.In addition, question 5 revealed that 43.2% of the respondents strongly agree that management usually brings in a third party like external auditor, forensic accountants or certified fraud examiners to verify organizations' transactions and activities.52.7% agree, 1.8% were undecided, while the remaining 2.3% disagree. Nevertheless, the claims were overwhelmingly positive, with 95.9% of respondents claiming that management typically employs a third party to check an organization's transactions and operations, such as an external auditor, forensic accountants, or certified fraud examiners. Finally, on fraud deterrence, question 6 revealed that 36.8% of the respondents strongly agree that conviction of perpetrators brought about by forensic audit can discourage others from committing fraudulent acts. 60% agree with the claim, 2.3% were undecided while the remaining 0.9% strongly disagree. This revealed that the majority of the respondents (96.8%) were positive that conviction of perpetrators brought about by forensic audit could discourage others from committing fraudulent acts. Table 4:Investigating Accounting Service Analysis S/N O INVESTIGATIVE SUPPORT SERVICE SA( %) A( %) UD( %) D( %) SD( %) 1. Investigation support helps in the search for evidence. 44.5 51. 4 2.7 1.4 - 2. Investigative knowledge uncovers fraudulent events. 39.5 57. 7 2.7 - - 3 Investigative support assists in internal cases of fraud. 32.3 60. 5 4.1 3.2 - 4. Sophisticated electronic gadgets used during investigations can discourage fraud. 39.5 53. 6 5 1.8 - Source: Field Survey, 2021 12 Question 1 on Table 4 confirmed that 44.5 percent of respondents strongly agreed that an investigative support service assists in the search for evidence to support a court case. 51.4 percent of those polled agreed with the assertion, 2.7 percent were undecided, and 1.4 percent disagreed. This revealed that the majority of the respondents (95.9%) were of the opinion that banks' investigation support service helps in the search for evidence that supports a court case. Question 2, reveals that 39.5% of the respondents strongly agree that investigative knowledge such as surveillance tactics, interviewing and interrogation skills can assist the forensic accountant in uncovering fraudulent events not exposed by external auditors 57.7% agreed with the claim, while the remaining 2.7% were undecided. This revealed that the majority of the respondents (97.2%) were positive that investigative knowledge such as surveillance tactics, interviewing and interrogation skills could assist the forensic accountant in uncovering fraudulent events not exposed by external auditors. Further, Question 3 revealed that 32.3% of the respondents strongly agree that investigative support service can be used for internal cases of fraud within the bank, 60.5% agree, 0.9% were undecided and the remaining 1.8% disagree with the claim. This revealed that most of the respondents, which account for 92.8%, are of the view that investigative support services can be used for internal cases of fraud within the bank. Finally, IAS in question 4 illustrates that 39.5% of the respondents strongly agree that knowing that sophisticated electronic gadgets can be used during investigations can discourage one from committing fraud. 53.6% agree with the claim, 2.3% were undecided while the remaining 0.9% disagree. This revealed that the majority of the respondents (93.1%) were positive that knowing that sophisticated electronic gadgets can be used during investigations can discourage one from committing fraud. Table 5:Litigation Support Service Analysis S/NO LITIGATION SUPPORT SERVICE SA(%) A(%) UD(%) D(%) SD(%) 1. Litigation support assists equitable judgement. 30 62.7 3.6 3.6 - 2. Charging a guilty individual discourages fraud. 24.5 71.4 3.2 .9 - 3 Litigation support can establish legal patterns for resolving future fraud cases. 34.1 59.1 5 1.8 - 4. Knowledge of the law can assist in identifying evidence needed in court. 34.1 61.8 2.3 1.8 - Source: Field Survey, 2021 In table 5, 30.1 % of respondents strongly agree that litigation support services can assist the court in determining an equitable judgment. 62.7 % agreed with the statement, 3.6 % were undecided, and 3.6 % disagreed, 24.5 % of respondents strongly agree that charging a guilty individual in court for a fraudulent act and making the individual pay for the crime can deter people from committing fraud. 71.4 % agreed with the claim, 32% were unsure, and the remaining 9 % of people disagree. Further, Question 3 shows that 34.1% of the respondents strongly agree that the use of litigation support in financial forensics can establish legal patterns 13 which can prevent legal disputes or set standards for resolving future fraud cases 59.1% agree, 5% were undecided and the remaining 1.8% disagree to the claim. This revealed that most of the respondent which account for 93.2% are of the viewed that the use of litigation support in financial forensics can establish legal patterns which can prevent legal disputes. Finally, on LSS, question 4 revealed that 34.1% of respondents strongly agree that knowledge of laws and court procedures can assist the forensic accountant in identifying the type of evidence required to meet court requirements, 61.8% agree, 2.3% are undecided, and the remaining 1.8% disagree. Table 6:Expert Witness Service Analysis S/NO EXPERT WITNESS SERVICE SA(%) A(%) UD(%) D(%) SD(%) 1. Availability of an expert can hinder fraud occurrences 21.4 65.5 9.1 3.6 .5 2. Expert witness can identify manipulated transactions 21.8 65.9 10 1.8 .5 3 Expert witness can provide information which can lead to the prosecution of perpetrator 27.1 59.4 9.2 4.1 - 4. Mistakes and omission can affect trail outcome 27.7 59.5 9.5 3.2 - Source: Field Survey, 2021 With regard to expert witness, question 1 on Table 6 showed that 21.4% of the respondents strongly agree that knowing that an expert of a particular field is likely to give an opinion on a fraudulent act can hinder an individual from committing fraud, 65.5% agree to the statement, 9.1% were undecided, 3.6% were undecided while the remaining .5% strongly disagree. This showed that the majority of respondents (86.9%) believe that knowing that an expert in a specific field is likely to give an opinion on a fraudulent act will prevent anyone from committing fraud. On question 2, 21.8 % of the respondents strongly agree that Expert witness services can be used in identifying manipulated transactions within the bank. 65.9% agree to the claim, 10% were undecided, 1.8% disagree while the remaining 0.5% strongly disagree. This revealed that majority of the respondents (87.7%) were positive that expert witness services can be used in identifying manipulated transactions within the bank. Further, Question 3 revealed that 27.1% of the respondents strongly agree that an expert witness can provide reliability on matters related to fraud through supporting facts and this can lead to the prosecution of a fraud perpetrator, 59.4% agree, 9.2% were undecided and the remaining 4.1% disagree to the claim. This revealed that most of the respondents which account for 86.5% are of the viewed that an expert witness can provide reliability on matters related to fraud through supporting facts and this can lead to the prosecution of a fraud perpetrator. Finally, question 4 on EWS showed that 27.7% of respondents strongly agree that expert witness errors and omissions would damage credibility in a court agreement or trial. 59.5 percent agree with the statement, 9.5 percent are undecided, and 3.2 percent strongly disagree. This revealed that majority of the respondents (87.2%) were positive that mistakes and omissions by the expert witness can damage credibility in a court negotiation or trail. 14 Descriptive Statistics of Variables of the Study This section provides descriptive statistics of the variables of the study, using mean and standard deviation. The result is presented in Table 7. Table 7:Descriptive Statistics of Variables Variables Sample Mean Std. Deviation FRD 220 4.38 0.45 IS 220 4.32 0.37 LS 220 4.23 0.45 EW 220 4.08 0.51 Source: SPSS Output, 2021 All constructs were evaluated using a five-point Likert scale. The mean response on fraud deterrence (FRD) was 4.38, with a standard deviation of 0.45. A mean response of 4.32 on IAS with a standard deviation of 0.38 indicated that staff respondents are also developing a positive perception of the banks' investigating accounting service (IAS). 4.23 mean response on (LSS) revealed that staff in banks are becoming more positive about Litigation support service of financial forensics. Finally, the mean response of 4.08 on expert witness indicates that the sampled banks have a positive perception of the expert witness function. Diagnostic test Ordinary least demand the satisfaction of some basic assumption for better inference. To this effect, the study conducted normality test and multicollinearity test. Figure 4:Normality of Residual Source: SPSS Output, 2021 The study used a histogram to check for the normality of the residual. The figure above reveals a bell-shaped and symmetric about the mean. This indicated that the residual is normally distributed. 15 Multicollinearity Test The presence of multicollinearity between independent variables can result in a disputed result, necessitating testing. To check for multicollinearity, this paper used the Variance Inflation Factor (VIF). A VIF figure of more than 5 indicates severe multicollinearity (Kothari & Garg, 2014). There was no issue with multicollinearity since all of the VIF figures in Table 8 are less than 5. Table 8:Test for Multicollinearity VIF TV IAS 1.68 0.60 LSS 2.24 0.45 EW 1.83 0.55 SPSS Output, 2021. Regression Analysis The regression results of this study - financial forensics on fraud deterrence in Nigeria's listed deposit money banks are presented in the table 8. Table 9:Regression Analysis Output Variable Coefficients D t-value p-value IAS .22 .07 2.99 0.003* LSS .38 .07 5.18 0.000* EWS .25 .06 4.33 0.000* CONST .84 .26 3.27 0.001* Adjusted R2 0.51 F-statistic 76.80 p-value 0.000 * Significant at 5%. Source: SPSS Output, 2021. The Adjusted R2 revealed a value of 0.51, indicating that the financial forensics variables (investigating accounting service, litigation support, and expert witness) can explain 51 % of changes in fraud deterrence by Nigeria's listed deposit money banks, with the remaining percent explained by other factors not captured in the model. The model's F-statistic value was 76.80, with a P-value of 0.000 showing that the financial forensics variables have joint effect on fraud deterrence by the listed deposit money banks in Nigeria. Test of Hypotheses Regression analysis shows that IAS has a P-value of 0.003 which is significant at less than 5% level of significance, showing that investigating accounting services has a significant effect on fraud deterrence of the sampled banks. Thus (H01) is rejected. For LSS P-value of 0.000 was significant at 5% level of significance, indicating that LSS had a significant effect on fraud deterrence of the sampled firms. As a result, the study's null hypothesis (H02) was rejected, which reported that litigation support services have no significant impact on fraud deterrence in 16 Nigeria's listed deposit money banks. Finally, regression result revealed that expert witness (EW) had a P-value of 0.000 which was significant at less than 5%, indicating that EW had a significant effect on fraud deterrence of the sampled firms. Therefore, the study rejected the null hypothesis (H03) of the study that stated that expert witness has no significant effect on fraud deterrence in listed deposit money banks in Nigeria. 5. Conclusion and Recommendation From the findings, the study concludes that financial forensics has a significant positive impact of fraud deterrence. The fraud deterrence cycle was used to explain fraud deterrence. 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