EFFECT OF FORENSIC ACCOUNTING TECHNIQUES ON FINANCIAL REPORTING QUALITY OF MDAs in NIGERIA

Abstract

This study examined the effect of forensic accounting techniques on the credibility of financial reporting in Nigerian Federal Ministries, Departments, and Agencies (MDAs). The techniques considered were ratio analysis and trend analysis. The study adopted a survey research design, and data were collected through the administration of 344 questionnaires to staff in finance and audit departments of selected MDAs. Out of these, 337 valid responses were analyzed using regression analysis. The findings revealed that ratio analysis has a significant positive effect on financial reporting credibility by improving accuracy and exposing irregularities. Similarly, trend analysis was found to significantly enhance financial reporting credibility by revealing inconsistencies across accounting periods and strengthening transparency. The study concludes that forensic accounting techniques are effective in promoting accountability in the public sector. It recommends that ratio analysis and trend analysis be institutionalized in financial reporting processes of Federal MDAs to improve the reliability of financial information and restore public confidence.

KEYWORDS: Forensic Accounting, Ratio Analysis, Trend Analysis, Financial Reporting Credibility.