role of forensic accounting in national development

The Role of Forensic Accounting in National

Development and Transformation

Compiled and Presented

By:

Godwin Emmanuel OYEDOKUN(HND, BSc. Ed, MBA, MTP (SA), ACA, ACIB, FCTI, AMNIM, ACCA-CertIFR, CFA, CFE, CNA, FCFIP, FCE, CICA, ABR, CPFA)

[email protected] +2348033737184, +2348055863944

Assistant Director (Head) Education, Research & Technical

The Chartered Institute of Taxation of Nigeria

Being a paper delivered at the Nigerian Students’ Economic and Finance Summit

(NISEF) 2015; of Obafemi Awolowo University’s Chapter of the Nigeria University

Accounting Students’ Association

Theme: Transformation Agenda and Good Leadership: A springboard for

Sustainable Economic Development

3

The Facilitator- “Nemo Dat Quod Non Habet”

Godwin Emmanuel Oyedokun, HND, BSc.Ed, MBA, MTP (SA), ACA, FCTI, ACIB, AMNIM, CAN, FCFIP, CICA, CFA,CFE, CPFA, ABR, CertIFR

Assistant Director (Head) – Education, Research & Technical Directorate of The Chartered Institute

of Taxation of Nigeria (CITN)

Godwin is an Experience Certified Fraud Examiner, Chartered Accountant, Chartered Tax Professional,

Certified Forensic Accountant, Chartered Banker, Chartered Manager, Insolvency Practitioner, and Financial

Analyst of good repute.

He also holds a Certificate in International Financial Reporting (CertIFR) of Association of Certified

Chartered Accountant (ACCA)

He is a seasoned professional who is currently serving as an Advisory Council Member of Association of

Fraud Examiner (ACFE), Austin, USA, and Vice President of Nigeria Chapter of same Association

Godwin is a leader in Forensic Accounting and Fraud Investigation, he is a sought after intellectual, who has

presented over 35 technical papers in various Training/Seminars on Forensic Accounting, Fraud

Investigation, Internal Audit & Control, Risk Management, IFRS, ICT, Strategic Management, Finance &

Accounting related subjects. He is also an Examiner to The Chartered Institute of Bankers of Nigeria (CIBN)

on “Introduction to Financial Accounting (FA)” and “Information Communication Technology (ICT)”

He has been trained on Forensic Accounting, Accountancy and Fraud Investigation and other Finance &

Accounting related courses, in Ghana, Senegal, Liberia, Cote d’Ivore, Canada- Toronto, at some States in

United State of American and in Nigeria including Lagos Business School of Pan Atlantic University.

He was the Assistant Director (Head) – Finance & ICT of The Chartered Institute of Taxation of Nigeria

(CITN).

He is the Chief Technical Consultant to OGE & CO Professional Services Ltd. (www.ogecops.com) and A &

D Forensic Consults Ltd. Nigeria (www.adforensicconsults.com).

This presentation will cover the following major sub topics :

• Protocol

• Appreciation

• Introduction

Economic growth

Economic development

Economic transformation

Forensic Accounting

Role of Forensic accounting in Economic development and transformation

Summary and Conclusion

Recommendation

end

Contents

Oyedokun Godwin Emmanuel

Protocol

The Vice Chancellor Professor Bamitale Omole, PhD

The Deputy Vice Chancellor

The Registrar

The Bursar

Other Principal Officers of the University

Professor T. A. A Agboola, PhD, FCA, the HOD Management and Accounting Department

Professor T. O. Asaolu, PhD, FCA, the former HOD Management and Accounting Department

All my Senior Colleagues and Lecturers in Accounting Department

Invited Guests and Speakers

Mr. Adeoba Oluwadamilola V, The President, NUASA OAU

Mr. Agbalagba Dennis, The Chairman Local Organizing Committee

Other Executive/Representatives/members of NUASA OAU Chapter

Ladies and gentle men

Great Nigeria Students!!!

Appreciation

I wish to appreciate the entire students of management and accountingdepartment of Obafemi Awolowo University and most especially theleadership of the University’s NUASA executives ably led by Mr. AdeobaOluwadamilola Vincent for continuing in this good initiative.

I must also thank you all for the resolution of the members of theAssociation at the congress held on March 27, 2014, where I wasnominated and appointed as one of the Patrons of Nigerian UniversitiesAccounting Students’ Association, Obafemi Awolowo University Ile Ife,with effect from March 28, 2014.

My appreciation also goes to my Dad and Senior Colleague, Professor T.O. Asaolu, PhD, FCA, for his fatherly care on us all in the profession. Hiswork on Forensic Accounting with Professor A. A. Owojori, PhD, FCAreally helps in all my presentations on Forensic Accounting both here inNigeria and aboard. Thank you for being there for us.

Introduction

The theme of this summit is “Transformation Agenda andGood Leadership: A springboard for Sustainable EconomicDevelopment” while my discussion today will be on thetopic; “Role of Forensic Accounting in NationalDevelopment and Transformation”.

In order to do justices to both the theme in general, and myallotted topic in particular, this presentation will thereforebe premised on National Development, Economic Growth,Economic Transformation and Forensic AccountingTechniques.

We will look at how the techniques of forensic accountingcan help in national development and transformation forbetter tomorrow.

Economic Growth

Economic Growth is an increase in a country's real level ofnational output which can be caused by an increase in thequality of resources, and improvements in technology or inanother way an increase in the value of goods and servicesproduced by each and every sector of the economy.

Economic Growth can be measured by an increase in acountry's GDP (i.e Gross Domestic Product) (Diffen.com).

You will recall Nigeria’s rebased DGP makes it the largesteconomy in Africa and the 26th largest in the world at $510billion (GTBank outlook 2015).


Economic development is a normative concept which appliesin the context of people's sense of morality (i.e right andwrong, good and bad). Economic development is an increasein living standards, improvement in self-esteem needs andfreedom from oppression as well as a greater choice (MichaelTodaro).

The most accurate method of measuring development is theHuman Development Index which takes into account theliteracy rates & life expectancy which affect productivity andcould lead to Economic Growth. It also leads to the creationof more opportunities in the sectors of education,healthcare, employment and the conservation of theenvironment.

It implies an increase in the per capita income of everycitizen.


Per capita income, also known as income per person, isthe mean income of the people in an economic unit such asa country or city.

It is calculated by taking a measure of all sources of incomein the aggregate (such as GDP or Gross national income)and dividing it by the total population (diffen.com;wikipedia.org).


Transformation could be said to mean the act or process oftransforming something (here nation or economy), or thestate of being transformed or change in form, appearance,nature, or character.

Economic transformation can also be liken to mean aseemingly miraculous or deliberate change in the appearanceof a Nation or generally in national outlook.

For Nigeria to achieve her desired development, growth andeconomic transformation, she need a set of transformationalleaders.

To a Psychology Expert, Cherry (nd), “transformationalleaders do or most inspire greater performance in groupmembers”.


Thus, “such leaders are/is someone who took control of the situation by conveyinga clear vision of the group's goals, a marked passion for the work, and an ability tomake the rest of the group feel recharged and energized.

This person is just an ideal of persons or group of persons that are calledtransformational leader(s)” (Cherry, nd).

Transformational leadership is a type of leadership style that can inspire positivechanges in those who follow. Transformational leaders are generally energetic,enthusiastic, and passionate. Also, they are also focused on helping everyonesucceed as well (Cherry, nd).

Cherry, (nd) suggested the following as the components of Transformational Leadership:

Intellectual Stimulation

Individualized Consideration

Inspirational Motivation

Idealized Influence

If any of the above components of transformational leadership is lacking, meaningful transformation may not exist in such economy.

National Development and Economic Growth

From the above, it is therefore clear that there is a clear-cut differencebetween development and growth. In some cases, there might bedevelopment without growth.

Nigeria just like other nations is faced with the twin problem of NationalDevelopment and Economic growth, in the recent time some are eventaking of economic transformation!!! Why? Because it is generally believedthat the elites are always the beneficiaries of the “real things”.

Based on this fact, this had made other countries to refer to Nigeria as a“Third World Country”, underdeveloped and/or developing country.

What could have led to this accolades for the country is basically lack ofsome basic amenities that were supposed to be provided by theGovernment such as; Electricity, Pipe-Borne water, hospital, education andso on. This makes the country as laughing stock that is prone with poverty,corruption, nepotism, low morals of the workforce and so on.

National Development and Forensic Accounting

National Development could be likened to “Core Welfare Indicators”. For NationalDevelopment to occur in a Country, the following must be in place as scheduledthus (Emerson, nd):

Household Demographic indicators;

Household welfare;

Agriculture;

Household Amenities;

Employment Opportunities;

Sound Education, Literacy and Enrolment Rates;

Access to essential Health Facilities.

Developmental issues had been described as very apt in all the societies. Without ameaningful indicators of development, the citizens of a country would continue toexperienced abject poverty, continuous high level and/or white-collar ofcorruption, health issues at the highest level, and other attendant factors that couldbe discouraging to the citizenry.

Any nation without a meaningful development that could be recognized as beingnational could be referred to as a “Weak State”.


We all need to join our hands in building our Nation (Nigeria) so as to seeher developed as we all clamored for. Gambari (2008) highlighted five (5)main nation-building challenges Nigeria faces viz: the challenge from ourhistory; the challenge of socio-economic inequalities; the challenges of anappropriate constitutional settlement; the challenges of buildinginstitutions for democracy and development; and the challenge ofleadership.

Our quest for nation-building, have recorded some successes, such askeeping the country together in the face of many challenges. However,these challenges continue to keep us from achieving our full potential(Gambari, 2008).

Among possible solutions to the challenges faced in economictransformation or and economic development is the introduction offorensic accounting techniques.

This may to some extent look strange, but it is a known fact that there existforensic accounting techniques and also there exist empirical researchshowing how these techniques can be employed in solving vex economicproblem


According to Webster's Dictionary Forensic means, "belonging to, usedin or suitable to courts of judicature or to public discussion and debate."Forensic Accounting, provides an accounting analysis that is suitable to thecourt which will form the basis for discussion, debate and ultimatelydispute resolution (Zysman 2004).

As noted in research conducted by Oyedokun (2014), the field of forensicaccounting is not a new concept, though it has grown in popularity inrecently, it has its root and basis on the understanding of the mind of thefraudster in order to understand why frauds are committed (Oyedokun,2014; Hecht and Redmond 2010).

Forensic accounting is based upon the scientific detection, interpretationand communication of evidences through a thorough investigation ofbooks and records of an accounting system. It is considered to be anindependent professional judgment, which can deliver findings as toaccounts, inventories, or the presentation thereof that is of such qualityand that would be sustainable in some adversarial legal proceeding, orwithin some judicial or administrative review (Oyedokun, 2014).


Forensic Accounting is different from the old debit or credit accounting as it provides anaccounting analysis that is suitable to the organization which will help in resolving thedisputes that arise in the organization (Owojori and Asaolu, 2009).

This resolution according to Oyedokun (2014) can be extended to our dear Nation Nigeria atlarge.

The political and electoral case of the State of Osun, Nigeria in the year 2007, where theGovernor, Ogbeni Rauf Aregbesola utilized forensic Accountants in proving his case in appealcourt and thereby reclaim his mandate as the Governor of the State. This was well report inWikipedia as follows:

“Aregbesola was formerly an activist. He was Lagos Commissioner for Works andInfrastructure when he ran for election in April 2007 on the Action Congress platform. In May2008, Aregbesola called over 100 witnesses and tendered 168 exhibits in his petition before theElection Petitions Tribunal, alleging violence and ballot boxes stuffing in the election.………….He also claimed that 12 people had died in the election violence” (en.wikipedia.org).

From the above, it was noted that the use of 100 witnesses, 168 exhibits and confirmed claimthat 12 people had died in the election violence earned Aregbesola his mandate where Justicesof the Federal Appeal Court, Ibadan finally declared him (Aregbesola) the winner of the 2007election, ordering that he be sworn in as governor by noon on 27 November 2010.


Owojori and Asaolu (2009) concluded that forensic accounting is the bests ever growing areasof accounting that enables in enhancing the chances of success in day to day life of corporatefirm by surmounting all the vexing and critical problems of corporate field as panacea.

The Role of Forensic Accounting in Solving the Vexed Problem of Corporate Worldaccording to Owojori and Asaolu (2009) are as follows:

Giving preliminary advice as an initial appraisal of the pleading and evidence available at thestart of proceedings.

Identifying the key documents which should be made available as evidence. This is importantwhen the forensic accountant is acting for the defense and lawyers are preparing lists ofdocuments to tender in court.

Preparing a detailed balanced report on quantum of evidence, written in a language readilyunderstood by a non-accountant and dealing with all issue, irrespective of whether or notthey are favourable to the client.

Reviewing expert accounting reports submitted by the other party which may have impact onthe quantum of evidence and advising lawyers on these reports.

Briefing legal counsels on the financial and accounting aspects of the case during pre-trialpreparation.

The other plane of the forensic accountant can initiate measure for introduction ofenvironment accounting to highlight the damage done to the environment by the possiblerecoupment of such damages or replenishment of lost properties through environmentalmanagement continually.

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A Forensic Accounting have skills in many areas viz:

Auditing skills

Investigative knowledge and skills

Criminology

Accounting knowledge

Legal knowledge

Information technology (IT) knowledge and skills

Communication skills

Report Writing Skill

Knowledge and Skill Set for Forensic Accountants

Wednesday, February 18, 2015 24

Conclusion and Recommendation

The development of any society is the interplay between man and his environment. This interplayaccording to Gambari (2008) that ensure self-discovery plays a major role in energizing, conscientizing,motivating and mobilizing the people towards a common goal. This paper looks at the role of Forensicaccounting in national development and transformation.

Gambari (2008) opined that society with strong value system will experience high development anddiscipline group of people while a society with weak value system will experience chaos andunderdevelopment. While transformation is not the same as development or growth, it is said to mean theact or process of transforming something (here nation or economy), or the state of being transformed orchange in form, appearance, nature, or character. Economic transformation on the other hand as been seento mean a seemingly miraculous or deliberate change in the appearance of a Nation or generally in nationaloutlook. For a nation to transform meaningfully, such nation must have transformational leaders. Aspostulated by Burns (1978), transformational leadership can be seen when "leaders and followers makeeach other to advance to a higher level of moral and motivation." Through the strength of their vision andpersonality, transformational leaders are able to inspire followers to change expectations, perceptions, andmotivations to work towards common goals.

Umotong (nd) believed that most countries are faced with the challenge of National Development and thatNigeria is grappling with this challenge which is blamed on leadership. National development cantherefore be seen as the sustainable improvement in both material and spiritual life of a nation, and whichmust be realizable in ways consistent with the protection of human dignity (Umotong, nd).

Forensic accounting been most growing field is said to have capacity to help in resolving the problem ofnational development and economic transformation. Forensic accounting is sufficiently thorough andcomplete according to Dada (2013) to, deliver findings in some adversarial legal proceeding, or within somejudicial or administrative review.

Recommendation

This paper agree with Umotong (nd) that:

…for Nigeria to experience real National Development, there must be genuine andsincere effort to substitute love for domination, for equality; for love of victory, wemust substitute justice; and for dichotomous greed, we must substitutecooperation. Our elite must be sensitive and considerate and must think of thenation as one family and further our common interest by the intelligent use ofnatural resources towards prosperity. Our elite must believe in the worth of thehuman person and live above the materialistic and exploitative tendencies, which ourfounding fathers inherited from the colonialists.

Corruption and economic self-indulgence impact negatively on the effort totransform Economic, therefore, economic transformational leadership must ensurethey observe the components of transformational leadership as postulated byCherry, (nd) viz: Intellectual, Individualized Consideration, InspirationalMotivation, and Idealized influence

Both leadership and followership should be morally upright, to achieve socio-political stability, which in turn ensure national development and transformation.

Forensic accounting techniques should be integrated in developmental effort bytransformational leadership to bring about desired national development.

Thank you

Adekoya, H. O. & Ajilore, K. (2012) Empowering National Development in Nigeria through

Appropriate National Communication Policy. Kuwait Chapter of Arabian Journal of Business and Management Review Vol. 2, No.3; Nov. 2012

Association of Certified Fraud Examiners (Year 2013): 2013 International Fraud Examiners Manual

Burns, J. M. (1978). Leadership. N.Y: Harper and Raw.

Cherry K. (nd). How Transformational Leadership Inspire;

downloaded from http://psychology.about.com/od/leadership/a/transformational.htm

Dada, S. O. (2013); Forensic Accounting and the Fight against Corruption in Nigeria (1999

– 2010): Being A Doctoral Degree Thesis Presented to the Department of Business Administration, School Of Postgraduate Studies , Babcock University, Ilishan Remo Ogun State. Nigeria

Economic Development vs. Economic Growth http://www.diffen.com/difference/Economic_Development_vs_Economic_Growth

Enyi, E.P (2008): Detecting Causes of Variances in Operational Outputs of Manufacturing

Organizations: A Forensic Accounting Investigation Approach. Downloaded from

http://ssrn.com/abstract=1144783 on 17/03/2014

Gambari I. A. (2008), The Challenges of Nations Building: the case of Nigeria: Being paper

presentation Under-Secretary-General and Special Adviser to the United Nations Secretary-General First year Anniversary Lecture; Mustapha Akanbi Foundation; Sheraton Hotel Abuja, Nigeria on 7 February 2008: http://www.mafng.org/anniversary/challenges_nation_building_nigeria.htm

GTBank Nigeria Macroeconomic ad banking sector themes for 2015

References & Further Reading

http://ssrn.com/abstract=1144783

Hopwood, Leiner and Young (2009); Forensic Accounting, McGraw-Hill International.

Nigeria Youth And National Development http://saharareporters.com/article/nigeria-youth-and-

national-development

Owojori, A.A and T. O. Asaolu (2009), The Role of Forensic Accounting in Solving the Vexed Problem of Corporate World; European Journal of Scientific Research ISSN 1450-216X Vol.29 No.2 (2009), pp.183-187 © EuroJournals Publishing, Inc. 2009 http://www.eurojournals.com/ejsr.htm

Oyedokun, G. E (2013). Audit, investigation and forensic accounting: Similarities and

differences. Being a lecture delivered at the Institute of Chartered Accountants of Nigeria’s forensic accounting certification programme

Oyedokun, G. E (2014). Integrity of Financial Statement and Forensic Accounting Techniques in

Internal Control of Business Organization: Being a pre-field Master of Science in Accounting Thesis presented at the Department of Accounting, Babcock University (Unpublished): Ilishan-Remo Ogun State on December 4, 2014

Rasey. M, (nd), History of Forensic Accounting; retrieved on August 21, 2014 from

http://www.ehow.com/about_5005763_history-forensic-accounting.html

Shanikat M. and A. Khan (2013), Culture-Specific Forensic Accounting Conceptual

Framework: A Skills Set Theoretical Analysis: International Journal of Business and Management; Vol. 8, No. 15; 2013 ISSN 1833-3850 E-ISSN 1833-8119 Published by Canadian Centre of Science and Education

Zysman, A., (2004). Forensic accounting demystified. World investigators network standard

practice for investigative and forensic accounting engagement? Canadian Institute of Chartered Accountants.

References & Further Reading

http://saharareporters.com/article/nigeria-youth-and-

http://www.ehow.com/about_5005763_history-forensic-accounting.html

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