The high rate of poor quality audited financial reports by companies, including quoted banks in Nigeria, and their confirmation as unqualified reports by external auditors prompted this research, which looked at the impact of forensic accounting on the quality of financial reporting by quoted banks in Nigeria. The study’s main purpose was to see how forensic accounting affected the quality of financial and monetary reporting by Nigeria’s publicly traded banks. From 2009 to 2018, cross-sectional data was taken from audited financial reports of publicly traded banks. The ordinary least square approach was used to determine the extent to which forensic accounting influences the quality of financial reporting of Nigerian listed banks. The study acknowledges the fixed effect model as the most appropriate after a thorough analysis of the validity of the pooling effect, fixed effect, and random effect models. Investigative accounting and litigation support services were used as proxies for the independent variables, whereas accrual quality, value relevance, and audit time lag were used as proxies for the dependent factors. Model 1 explains 71.6 percent of the variation in accrual quality with the independent variable. The model’s significance was confirmed by F-statistics, and the p value of the coefficient indicated that the link is statistically insignificant. Investigative accounting has a detrimental effect on accrual quality, according to the findings. The independent variable in model 2 accounts for 61.6 percent of the variance in value relevance. The model’s significance was confirmed by the F-statistics, whereas the p value of the coefficient suggested that the link was statistically insignificant. Investigative accounting also had a detrimental effect on value relevance, according to the data. Model 3 explains 59.2 percent of variance in audit time lag with the independent variable. The F-statistics confirmed that the model is significant, while the coefficient p values suggested that the effect is statistically insignificant. Litigation support services also had a negative impact on audit time lag, according to the beta coefficient. The study indicates that forensic accountants’ services are urgently required, as is the early publication of audited financial statements in order to facilitate fast investment decisions. It is suggested that forensic accountants use investigative accounting techniques and expertise to improve the quality of financial or monetary reporting and gain the trust of stakeholders. It also suggests that law enforcement agencies take action against banks that fail to submit their annual accounts within the required deadline. This would involve forensic accountants in litigation support services, raise awareness among top executives, improve financial reporting quality, and build stakeholder trust.
Ejimofor Louis Chidi
Department of Accounting, University of Port Harcourt, Choba, Nigeria.
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