FORENSIC AUDITING AND FINANCIAL FRAUD PREVENTION AMONG LISTED FINANCIAL FIRMS IN NIGERIA
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Date
2026-05-31
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Publisher
Kashere Journal of Accounting and Finance
Abstract
Financial fraud has remained a persistent challenge within financial institutions globally, particularly in emerging economies where weak control systems, technological vulnerabilities, and inadequate regulatory enforcement continue to expose firms to fraudulent activities. Thus, this study examined the effect of forensic auditing on financial fraud prevention among listed financial firms in Nigeria. The study adopted a quantitative cross-sectional survey research design using primary data collected through structured questionnaires administered to 302 respondents drawn from listed financial firms on the Nigerian Exchange Group. Data were analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM). The findings revealed that forensic auditing practices significantly improve financial fraud prevention (β = 0.221, p = 0.002), while forensic audit expertise and professional competence also exert a positive and significant effect (β = 0.184, p = 0.007). Furthermore, forensic audit tools and techniques (β = 0.256, p = 0.001), internal control systems (β = 0.278, p = 0.000), and regulatory compliance (β = 0.205, p = 0.002) all significantly enhance financial fraud prevention among listed financial firms in Nigeria. The study concludes that effective forensic auditing mechanisms are critical in reducing fraud opportunities and strengthening transparency and accountability within financial institutions. The study recommends that the management of financial firms should strengthen forensic auditing practices, invest in professional training and digital forensic technologies, improve internal control systems, and ensure strict regulatory compliance to enhance fraud prevention effectiveness.