Home » Accounting » EXAMINING THE ROLE OF FORENSIC AUDIT IN DETECTING FINANCIAL FRAUDS IN THE CAMERO...

EXAMINING THE ROLE OF FORENSIC AUDIT IN DETECTING FINANCIAL FRAUDS IN THE CAMEROONIAN PUBLIC SECTOR: A CASE STUDY OF THE MINISTRY OF TRANSPORT

Sold By: | Item Type: Project Material | Report this?  |  Attributes: 54 pages | 1-5 chapters | Amount: ₦5,000 | Marked useful: 331 times

Delivery: Within 24 hours

EXAMINING THE ROLE OF FORENSIC AUDIT IN DETECTING FINANCIAL FRAUDS IN THE CAMEROONIAN PUBLIC SECTOR: A CASE STUDY OF THE MINISTRY OF TRANSPORT

CHAPTER ONE

INTRODUCTION

1.1 Background of the study

Forensic auditing and forensic accounting are often used interchangeably. It has been officially declared by experienced authors and experts. Dali (2018) explained that the term "forensic" originates from the Latin phrase "for public" and more precisely from the word "forum". According to Aliyu & Egbong (2018), the forum was a place in Ancient Rome where people were educated in business practices and resolved conflicts, among other activities. Dahil (2008) defines forensic as the utilisation of expertise in addressing legal issues, namely in the context of crimes and corruption. The historical development of forensic auditing and its role in providing assistance for litigation may be traced back through this definition. Its prominence is growing due to a rise in both financial and non-financial scandals. Zachariah (2023) attributed the inception of forensic accounting to Kutilya, the earliest economist who allegedly coined the term "40 days of embezzlement" millennia ago. However, it should be noted that the phrase "forensic auditing" was first introduced by Peloubet in 1946. Peloubet defined the term as the utilisation of accounting expertise and investigative abilities to address legal matters that have already been detected (Zachariah, 2023).

The prevalence of fraud, terrorism, misfeasance, crimes, and corruption is not only growing but has also permeated every area of our society and the world as a whole. It is crucial to uncover all sources and uses of money in unlawful activities in every investigation, particularly those related to terrorism and counterintelligence. Forensic auditing has emerged as a valuable instrument for auditors to effectively and efficiently address the difficulties encountered in identifying financial crimes and recovering unlawfully obtained profits from illicit operations (Zachariah, 2023). The increase in demand for fraud accountants, who are trained to conduct accounting examinations, is mostly driven by the prevalence of fraudulent activities. Fraud accountants analyse financial records to uncover fraudulent activities committed by embezzling employees, deceitful organisations, and unfaithful spouses. They also provide expert testimony in subsequent trials. Adesua (2019) states that forensic auditing has gained popularity due to a surge in economic crimes, a multitude of business scandals, a rise in bankruptcies, and an increase in occupational fraud. In contemporary times, detectives and solicitors are required to collaborate with forensic auditors in order to trace evidence within financial documents or to locate individuals who are either victims or suspects. The accounting profession is impacted by fraud and forensic auditing on a daily basis (Zachariah, 2023).

Forensic accounting is named after its connection to the legal system. The aim is to achieve a goal through a legal procedure. Forensic accounting objectives encompass various tasks such as determining the value of assets in a divorce case, evaluating the extent of harm resulting from an auditor's negligence, conducting comprehensive investigations to establish the occurrence of embezzlement, quantifying the amount involved, and deciding whether to pursue criminal charges against the culprits. Additionally, forensic accountants also gather evidence for use in criminal proceedings (Zachariah, 2023). Forensic accounting primarily deals with the examination of financial transactions and reports within an accounting system. It also considers the legal requirements that make such evidence admissible for the goal of demonstrating accountability (Jimoh et al, 2021).

Forensic auditors are professional accountants who possess a charter and specialise in instances that require the collection and analysis of evidence. Their role involves identifying and analysing evidence of both regular (non-fraudulent) and irregular (fraudulent) transactions in the accounting system's books and records, and determining their impact on the accounts, inventories, and their presentation (Zachariah, 2023). Forensic auditors must have a thorough understanding of standard auditing techniques and processes, as they are mostly certified accountants. Forensic auditing can be divided into two main categories: litigation assistance and investigative accounting. Just like specialists in other forensic disciplines, forensic professionals in this field specialise in these areas (Yang, 2019).Forensic auditors possess several essential attributes for their job, such as proficiency in accounting, patience, and investigative skills (Krishnan et al., 2021).

Financial fraud in the public sector erodes public confidence, misdirects resources, and impedes development endeavours. It is crucial to identify and stop such fraudulent activities in order to uphold the integrity and responsibility of government agencies. Forensic auditing is a specialised form of auditing that specifically investigates and exposes instances of fraud and financial wrongdoing. It has become an essential instrument in the fight against these problems (Krishnan et al., 2021). Forensic audits play a crucial role in the detection and examination of financial fraud and anomalies. Forensic audits differ from standard audits by going beyond the scope of financial accuracy and compliance. They thoroughly examine financial data to detect deliberate deception, misrepresentation, and unlawful activity. Aje (2019) indicates The primary functions of forensic audits are the identification and prevention of fraudulent activities, the improvement of accountability, and the provision of support for legal proceedings.

The Ministry of Transport in Cameroon oversees the nation's transport infrastructure, encompassing roadways, railways, aviation, and maritime transport. Due to its prominent position and the large amount of money it oversees, the Ministry is susceptible to different types of financial fraud and corruption. Ensuring the integrity of financial processes within the Ministry is essential for the successful and efficient provision of transport services. Forensic auditors have a crucial function in identifying and examining instances of financial misconduct within the Ministry of Transport. Their duties encompass conducting thorough enquiries into suspected instances of fraud, scrutinising financial records and transactions for indications of irregularities and misconduct, cooperating with law enforcement and legal entities to furnish evidence and aid in prosecutions, and proposing measures to enhance internal controls and deter future fraudulent activities (Bode, 2023). Forensic audits play a vital role in fighting financial crime within the public sector. The Ministry of Transport in Cameroon, due to its strategic significance and the magnitude of financial transactions it manages, has the potential to gain substantial advantages from the implementation of efficient forensic auditing procedures. The objective of this study is to investigate the function of forensic audits in identifying instances of financial fraud within the public sector of Cameroon, with a particular emphasis on the Ministry of Transport.

1.2 Statement of the problem

Ensuring the accurate identification and prevention of financial fraud is crucial for upholding the integrity of public sector activities and protecting public resources. Forensic audits are targeted enquiries specifically intended to find instances of fraud and financial misbehaviour that may go undetected by standard audits. Forensic audits are being closely examined for their ability to detect and combat financial crime, particularly inside the Ministry of Transport in the Cameroonian public sector.

Research has indicated that a significant impediment to the successful execution of forensic auditing is the presence of resistance and a lack of cooperation (Shehu et al., 2018). Moses (2020) asserts that the success of forensic investigations can be undermined by a lack of cooperation, unwillingness to provide information, and intervention. Resistance from individuals inside the Ministry of Transport, both from within the organisation and from outside sources, might impede the progress of forensic audit endeavours. Manny et al (2017) argue that forensic auditors may lack sufficient training or professional growth in modern forensic methodologies and instruments. This lack of competence can hinder their capacity to accurately detect and probe financial misconduct. According to Aboni (2020), political and administrative constraints might influence the impartiality and autonomy of forensic audits. These pressures have the potential to impact audit results and impede the thorough examination of financial malfeasance.

Despite numerous declarations on internal audit in Cameroonian government agencies, the prevailing consensus in literature is that the majority of public firms have not succeeded in fulfilling their intended objectives. A significant number of individuals level allegations against directors of public firms in Cameroon, claiming that they lack efficacy and efficiency in managing resources. Sawyer (2022) contends that the improper implementation of internal audit principles and procedures results in the blatant misallocation of limited resources, which in turn affects the government's traditional obligation to be accountable to the people. Lee, Johnson, and Joyce (2020) state that internal control is necessary to ensure that limited resources are not misappropriated and that the fundamental aspects of financial management system design are upheld, hence providing reassurance to stakeholders. In an effort to halt the increase of prominent business collapses worldwide in the past 20 years, the International Federation of Accountants (IFAC) has created new laws, regulations, standards, rules, and guidelines. It should be noted that the inadequate execution of internal audit procedures in the public sector of Cameroon cannot solely be attributed to the lack of sufficient laws. Additionally, the success of this also depends on the presence of sufficient penalties for breaches of internal audit protocols and the fair and efficient enforcement of these penalties when necessary.

The lack of robust forensic audit standards inside the Ministry of Transport hampers endeavours to identify, prevent, and resolve instances of financial fraud. To improve the financial integrity within the public sector, it is crucial to have a thorough comprehension of these difficulties in order to boost the efficiency of forensic audits.

Objectives of the study

The primary objective of this study is to critically examine the role of forensic audit in detecting financial frauds in the Cameroonian public sector: a case study of the Ministry of Transport. Specific objectives of this study are to:

To analyze the role of Forensic Audit in Fraud Detection at Cameroon's Ministry of transport

To assess the impact of forensic audits on fraud prevention 

To evaluate the role of forensic audit in accountability within the Ministry of Transport

To assess the Impact of Forensic Audits in strengthening internal controls and promoting transparency

To offer recommendations for enhancing the effectiveness of forensic audit practices in the Ministry of Transport based on the findings of the study

1.4 Research Questions

The following research questions which are in line with the objectives of this study will be answered in this study:

What is the role of forensic audit in fraud detection at Cameroon's Ministry of transport?

What is the impact of forensic audits on fraud prevention?

What is the role of forensic audit in accountability within the Ministry of Transport?

What is the Impact of Forensic Audits in strengthening internal controls and promoting transparency within the Ministry of Transport?

What are the recommendations for enhancing the effectiveness of forensic audit practices in the Ministry of Transport based on the findings of the study?

1.5 Research Hypotheses

To determine the effectiveness of this study, the following research null hypotheses will be formulated to guide the study and it will be tested at 0.05% levels of significance.:

Ho: Internal audit has no significant impact on fraud prevention at Cameroon's Ministry of Transport.

Ha: Internal audit has significant impact on fraud prevention at Cameroon's Ministry of Transport.

1.6 Significance of the study

The importance of this study rests in its ability to strengthen the identification and prevention of fraudulent activities, promote the management of finances and accountability, and provide support for policies and regulations in the public sector of Cameroon. The report examines the significance of forensic audits in the Ministry of Transport and offers significant insights that can contribute to improved processes, enhanced openness, and increased public confidence in financial management.

The study aims to elucidate the role of forensic audits in detecting fraudulent actions that may go unnoticed by conventional audits. Gaining a comprehensive understanding of the efficacy of forensic audit procedures can result in the development of more resilient fraud detection mechanisms. The study aims to analyse the strengths and limits of existing forensic auditing techniques in order to devise more effective tactics for avoiding financial fraud and minimising the probability of future occurrences.

Moreover, the study will emphasise the influence of forensic audits on enhancing financial controls inside the Ministry of Transport. This can result in enhanced supervision and administration of public resources. Forensic audits are essential for promoting accountability by examining and revealing instances of financial malfeasance. The study aims to enhance comprehension on the role of these audits in ensuring accountability for financial malfeasance.

Moreover, the study's findings will provide policymakers with vital insights on the efficacy of forensic audits in the public sector. This can facilitate the formulation of policies and laws designed to enhance forensic audit processes and improve overall financial control. The study aims to identify deficiencies in the existing regulatory and legal frameworks for forensic auditing. This will result in proposals for regulatory reforms that enhance audit procedures and enforcement.

Moreover, the research will contribute to the existing information on forensic auditing techniques, specifically in the Cameroonian public sector. This can improve comprehension of forensic audit techniques and their implementation. The findings will provide practical insights and recommendations that will assist forensic auditors in enhancing their practices and procedures, thereby contributing to the progress of the profession.

1.7 Scope of the study

Broadly, this study focus is to critically examine the role of forensic audit in detecting financial frauds in the Cameroonian public sector. Specifically, this study seeks analyze the role of Forensic Audit I n Fraud Detection at Cameroon's Ministry of transport, assess the impact of forensic audits on fraud prevention and evaluate the role of forensic audit in accountability within the Ministry of Transport. 

Further, this study will focus on assessing the Impact of Forensic Audits in strengthening internal controls and promoting transparency and it also seeks to offer recommendations for enhancing the effectiveness of forensic audit practices in the Ministry of Transport based on the findings of the study.

 The study is carried out in Cameroon. 

1.8 Limitations of the study

As with any human endeavour, the researchers faced many minor constraints during the investigation. The main limitation was the lack of extensive literature on the topic, since there is a shortage of data specifically related to investigating the use of forensic audit in uncovering financial irregularities in the public sector of Cameroon, with a focus on the Ministry of Transport. Hence, a significant allocation of time and exertion was necessary to ascertain appropriate materials, books, or information and amass data. 

Furthermore, this study is constrained by its small sample size and narrow geographical scope, focusing solely on Cameroon. Therefore, the conclusions of this study cannot be extended to other situations, thus requiring further investigation. 

Moreover, the researcher's restrictions were primarily due to financial constraints, as they are a student without any source of income to sustain themselves. The exorbitant transportation charges at the research location posed a challenge in covering the expenses for transportation fees.

Furthermore, the researcher faced a time constraint due to the need to do this research while still fulfilling the obligations of attending lectures and participating in other educational activities.

1.9 Definition of terms

Forensic audit: A forensic audit is an examination and evaluation of a firm's or individual's financial records. During a forensic audit, an auditor seeks to derive evidence that could potentially be used in court. A forensic audit is used to uncover criminal behavior such as fraud or embezzlement.

Corporate governance: Corporate governance is the structure of rules, practices, and processes used to direct and manage a company. A company's board of directors is the primary force influencing corporate governance.

Accountability: Accountability is the practice of being held to a certain standard of excellence. It is the idea that an individual is responsible for their actions and, if that individual chooses unfavorable actions, they will face consequences.


This material content is developed to serve as a GUIDE for students to conduct academic research



Delivery: Within 24 hours

  • Reference(s):

    Yes available

  • Methodology: Yes available


Advertise Here

For advertisement, call 08168958821

Not what you were looking for? Perform a search

What's your project topic?


Comment on Facebook: