Effects of Forensic Accounting Techniques and Corporate Governance on Financial Performance of Listed Deposit Money Banks in Nigeria

Abstract

Purpose: This study aimed to investigate the effect of forensic accounting and corporate governance on the financial performance of listed deposit money banks in Nigeria. Theoretical framework: This study drew upon Agency Theory, to provide a theoretical foundation for examining the governance of a company and the conflicts of interest that arise among its shareholders, managers, and major debt providers. This was introduced to support the concepts of forensic accounting and corporate governance. Design/ Methodology/Approach: This study employed ex-post facto and panel data research designs. This study obtained data from the annual audited reports of deposit money banks that were listed in Nigeria. The study focused on a population of fifteen (15) deposit money banks listed on the Nigerian Exchange Group (NGX). The study employed a purposive sampling technique to select ten (10) firms due to the availability of a complete dataset of the targeted population. This study covered a period of eleven years from the year 2012 to 2022. The collected data in this study underwent analysis using both descriptive statistics and panel regression analysis techniques. Findings: The results found that forensic accounting and corporate governance had a significant effect on the financial performance of listed deposit money banks in Nigeria. This implies that these factors interact and contribute significantly to the banks' financial performance. Conclusion: It was concluded that fraud case disclosure highlights the significance of transparency and reporting mechanisms in deterring fraudulent activities and safeguarding banks' financial performance. Recommendation: The study recommends that deposit money banks should prioritize and improve the disclosure of fraud cases and mitigate fraud and other financial irregularities occurrences in order to cushion its adverse effects on financial performance and foster investor confidence.

Sustainability Reporting and Performance of Selected Quoted Firms in Nigeria

“…This involves evaluating the company's corporate social responsibility (CSR) initiatives, sustainability practices, ethical standards, and contributions to community development and environmental conservation. Firm performance serves as a comprehensive measure of a company's overall health, competitiveness, and ability to create long-term value for stakeholders, including shareholders, employees, customers, and society at large [22]. It is a multifaceted concept that encompasses financial, operational, strategic, and societal dimensions, providing stakeholders with insights into the company's overall success and sustainability [23].…”

“…A higher net profit margin indicates that the company is more effective at controlling costs and converting revenue into profits, while a lower net profit margin may suggest inefficiencies or higher expenses relative to revenue.Net profit margin is a key financial ratio used by investors, analysts, and stakeholders to evaluate a company's financial health, profitability, and performance over time. It is often compared with industry benchmarks and historical data to assess the company's competitive position and profitability trends [22].…”

Corporate Governance and Performance of Listed Firms in Nigerian Exchange Group

“…Board size refers to the number of individuals who serve as members of a company's board of directors. It is a key aspect of corporate governance that determines the composition and structure of the board [1]. Board size can vary widely depending on factors such as the size and complexity of the company, industry norms, regulatory requirements, and corporate governance best practices [14].…”

“…While some research suggests that strong corporate governance practices can lead to improved firm performance by fostering transparency, accountability, and better decision-making, other studies have found mixed or inconclusive results. The link between corporate governance and firm performance remains a topic of ongoing research and debate, with the consensus being that effective governance structures can contribute positively to a company's long-term success and sustainability [1,4].…”

“…One key issue is the lack of transparency and accountability in corporate governance practices among listed firms. Weak corporate governance mechanisms, such as inadequate board oversight, lack of independent directors, and insufficient disclosure of financial information, have been identified as factors that undermine investor confidence and erode shareholder value [1,2].…”