FORENSIC ACCOUNTING AS A TOOL FOR FRAUD

DETECTION AND PREVENTION IN COMPANIES IN

BUEA MUNICIPALITY.
 ABSTRACT
The main objective here is to ascertain forensic accounting as a tool for fraud
detection and prevention in companies in Buea municipality.

The specific objectives here are to ascertain that investigative accounting will
curb fraudulent activities in companies in Buea municipality and to determine
the methods used in litigation support to detect and prevent fraud in companies
in Buea municipality.

Data was collected through questionnaires administered to different institutions,

surveys and observations.

The method of data analysis here is Quantitative method, which include;

descriptive statistics, inferential statistics and regression analysis.

The key finding here is that, most companies in molyko use forensic accounting
in preventing and detecting fraud. Also forensic accountants are trained to
investigate financial irregularities and can provide evidence that may be useful
in legal proceedings.

Based on the available research, it is concluded that forensic accounting can be a

valuable tool for fraud detection and prevention in companies in buea
municipality

The key recommendation here is training employees on proper accounting

procedures as well as fraud prevention and detection techniques.

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 CHAPTER ONE

INTRODUCTION
The growing demand for forensic accounting is a known characteristic of most
companies in the world. Forensic accounting arises from the effect and cause of
fraud and technical error made by human. Forensic accounting is quite new as
companies have realized that the service of a forensic accountant is needed as
fraud cases have substantially increased in number. Forensic accounting is the
application of financial skills and investigative mentality to unsettled issues,
conducted within the context of the rules of evidence (Arokiasamy and Cristal,
2009). Bologn and Lindquistn (1987) assert that forensic accounting as a
discipline encompasses fraud knowledge, financial expertise, and a sound
knowledge and understanding of business reality and the working of the
legal system. Forensic accounting may be one of the most effective and
efficient way to decrease and check accounting fraud. Presently, forensic
accounting is gaining popularity worldwide. It is been taught as a major course
in many educational institutions in various countries.

1.1 Back ground of the study

According to Hopwood, Leiner, and Young (2021), Forensic Accounting is the
application of investigative and analytical skills for the purpose of resolving
financial issues in the manner that meets standards required by court of law.
Forensic accountants apply special skills in accounting, auditing, finance,
quantitative methods certain areas of the law research and investigative skills to
collect, analyze and evaluate evidential matter and to interpret and
communicate finding. In the era of increasing accounting scandals, the
Importance of forensic accounting is also increasing. The current study
systematically analyse a sample of Twenty-four(24) research articles which
have been conducted in the broad area of forensic accounting. The sample has
been collected from research articles published during periods starting from

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2015 to 2023. The result of this study reveals Importance of incorporating
forensic accounting education into undergraduate and graduate level courses.

1.2 Problem statement

Forensic accountants draw conclusions and calculate values and identify
irregular patterns or suspicious transactions by critically analyzing the
financial data. Problems arise from the fact that forensic accounting service
is still new to most of the businesses and even to the public in Molyko. This
leads to confusion among public and some may even be unaware of
the existence of the system. Therefore, the importance of the service is
ignored. Therefore this study focus on forensic accounting is conducted
to improve the understanding in detecting and reducing accounting
fraud cases in companies in Molyko. For example there are several
empirical studies such as Cain (1999) and the KPMG, Australia fraud
survey (KPMG), (2002) each indicate that over 50 per cent of all
respondents surveyed believed that fraud is a major business problem.
Moreover, similar reviews of fraud cases by Rezaee (2004) revealed
that financial statement fraud has cost market participation more that
USD$500 billion during recent years, with serious litigation.
Forensic accounting provides cultural mediation for economic and political
logics (Williams, 2002). It is the venue within which the cultural mediation of
legal and economic claims is accomplished. The first decade of the twenty-first
century experienced a tsunami or blizzard in the number of corporate scandals,
frauds, and failures (Ball, 2009). These events precipitated and contributed to
the Great Recession and significantly impacted the efficient functioning of free
market capitalism. Some of which were actually facilitated by public
accountants (Enron and Arthur Andersen). The scandals, frauds, and failures
have contributed to the loss of confidence by the financial statements users in
the ability of public accounting to contribute viable solutions to the financial
problems, and have fuelled the growth in demand for forensic accountants
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(Huber, 2012). However, large company such as Cadbury Nig Plc, Oceanic
Bank Plc and Afri Land First Bank had been found involved in fraud. This is
because it is always possible for high level management to access data and
change the information, paper-based system or a computerized system alike. It
all relates back to human nature and high level management.
The possible way to solve this issue is that the public should be educated and be
informed of the use and function of forensic accounting as a tool to prevent
fraud occurrences. When the public is made known of the concept, then they
could actually demand for the service in the company which they invest in.
Forensic accountants have played an increasingly important role in the litigation
and other legal disputes fomented by these recent frauds and failures. The fact is
that very little has been written in this area. Based on the problem stated above,
this study focus on forensic accounting as a tool for fraud detection and
prevention.

1.3 Research QUESTION

There are two types of research questions, that is the main and the
specific research question.

1.3.1 The main research question

The main research question for this project is; to what extend
forensic accounting affects fraud detection and prevention in Buea
municipality?

1.3.2 The specific research questions

The specific research questions for this project are;
-what is the effect of investigative accounting on the detection and
prevention in companies in buea municipality
-In what way does litigation support affects fraud detection and
prevention in companies in buea municipality

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1.4Research Objectives
There are two types of research objectives, that is the main and the specific
research objective

1.4.1The main research objective

The main objective here is to ascertain forensic accounting as a tool for fraud
detection and prevention in Buea municipality

1.4.2The specific research objective

The specific objectives here are;
-To ascertain that investigative accounting will curb fraudulent activities in
companies in Buea municipality
-To determine the method used in litigation support to detect and prevent fraud
in companies in Buea municipality

1.5 Research hypothesis

The hypothesis will be tested:
HYPOTHESIS 1
HO: There is no significant effect of investigative accounting in companies in
Buea municipality
HA: There is a significant effect of investigative accounting in companies in
Buea municipality
HYPOTHESIS 2
HO: There is no significant effect of litigation support in companies in Buea
municipality
HA: There is a significant effect of litigation support in companies in Buea
municipality

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1.6Significance of the study
This is based on improving and acknowledging the fact that forensic accounting
is an important tool for detecting and preventing fraud. Auditing begins where
accounting ends and forensic accounting begins where auditing ends.

1.7Scope and limitation of the study

Although forensic accounting is an essential tool for fraud detection and
prevention, it’s not all businesses that can afford the services of forensic
accountants. Thereby making forensic accounting to be limited in some area

1.8Definition of terms
-Forensic accounting
It is the process of understanding, identifying, detecting and communicating
fraud pattern in order to assist stakeholders in any investigation processor
activity. According to Hopwood, Leiner and Young (2008) Forensic accounting
is the application of analytical and investigative skills for the purpose of
resolving financial issues in the manner that meets standards required by court
of law. Crumbley, heitger and Stevenson smith (2021) in their book FORENSIC
AND INVESTIGATIVE ACCOUNTING provided the clearest and most
concise definition of accounting: Forensic accounting is the use of accounting
for legal purpose.
Forensic accounting has two major components; Litigation support and
investigative accounting. Forensic accounting can be involved in either one or
both of these areas. In litigation support, forensic accounting acts as expert
witnesses or consultant for parties involved in a lawsuit. Litigation support often
involves determining financial damages or valuing businesses or assets. Both
sides in a lawsuit may retain forensic accountants to testify as expert witnesses.
-FRAUD
It refers to deliberate act of omission or commission by any person, carried
out in the course of a banking transaction or in the books of accounts maintained
manually or under computer system in banks, resulting into wrongful gain to

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any person for a temporary period or otherwise, with or without any monetary
loss to the bank. Fraud in accounting is the intentional alternation of financial
statements by an employee or accountant, which lead to the falsifying of
financial statements
-Prevention fraud
Fraud prevention is the implementation of a strategy to detect fraudulent
transactions or banking actions and prevent these actions from causing financial
and reputational damage to the customer and financial institution.
-Detection fraud
Fraud detection is a set of activities undertaken to prevent money or property
from being obtained through false pretenses.it is applied to many industries such
as banking or insurance. In banking, fraud may include forging checks or using
stolen credit cards. Other forms of fraud may involve exaggerating losses or
causing an accident with the sole intent for the payout.

1.9 Summary of chapter

This chapter introduced the reader to forensic accounting knowledge, stated the
problem statement, research question and objectives, giving its scope and
limitation and finally defined the key terms.

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 CHAPTER TWO
LITERATURE REVIEW

2.1 CONCEPTUAL REVIEW

2.1.1 FORENSIC ACCOUNTING
Forensic accounting involves the use of accounting concepts, procedures and
skills to provide solutions to the legal problems. Forensic accounting is the
“integration of accounting, auditing, and investigative skills”. Usually, it
provides reports where the accountability of fraudulent activities is detected, and
the report is reflected as proof in the court of law or the administrative
proceedings. Forensic accounting is described as the method of interpreting,
summarizing and communicating complex financial and non-financial matters,
succinctly and accurately in a court of law as an expert. Forensic accounting is
the specialty area of accountancy profession which describes engagements that
result from actual or anticipated disputes or litigation. "Forensic" means
"suitable for use in a court of law" and it is to that standard and potential
outcome that forensic accountants generally have to work. Nowadays, large
accounting firms are reactively using the services forensic accountants rather
than proactively. Forensic accounting should be used during the audit
investigation to help identify key fraud risk areas, and communicate them to the
management of the organization for further consideration. It was argued that the
presence of deterrent to fraud in an organization is clearly signifying the
perception and anticipation of the likelihood of an increase in the detection and
prevention of illegal activities

Forensic accounting investigates financial information for potential evidence of

crimes. Forensic accounting use accounting auditing and investigative skills to
understand whether a person or company has committed financial misconduct.
Coenen described forensic accounting as involving the application of accounting
concepts and techniques to legal issues. It requires reporting when
accountability for fraud is established and the report is considered evidence in
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court or administrative proceedings. It offers an accounting analysis that is
suitable to the tribunal which will constitute the basis of discussion, debate and
ultimately dispute resolution. This means that forensic accounting is a field of
study of specialization that has to do with the provision of information that is
meant to be utilized as evidence, especially, for audio purposes.

According to Zabihollah Rezaee, D Larry Crumbley, Robert C Elmore, 2004

Forensic accounting is defined as the practice of rigorous data collection and
analysis in the areas of litigation support consulting, expert witnessing, and
fraud examination. At present, there appear to be a gap between accounting
practices and education in the sense that forensic accounting is viewed as one of
the most secured career tracks, yet there are only a limite number of accounting
programs offering forensic accounting courses. There is a little background data
available, and rarely any evidence post-Enron, Anderson and other financial
scandals, with respect to the integration of forensic accounting education into
the accounting curricula.

According to Emmanuel Ikechukwu Okoye, 2009 Forensic accounting provides

an accounting analysis that is sustainable to the court which will form the basis
for discussion, debate and ultimately dispute resolution. While certainly ideal for
court testimony, in broad terms, 'forensic', is about fact finding and
interpretation. The increase in number of fraud and fraudulent activities around
the world has emphasized the need for forensic accounting. Engagements of
forensic accountants on criminal matters typically arise as the aftermath of
fraud. Fraud examination in forensic accounting is different from that of
'traditional accounting' because the forensic accountant has the intuitive ability
to analyze fraud. The aim or this paper is to identify the role of forensic
accounting in fraud investigations and litigation support and proffer suggestions
that will, hopefully, bring to public awareness the importance of this area of
accounting.

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According to Wm Huber 2012, forensic accounting is often referred to as a
niche within the public accounting profession but it exhibits many of the same
characteristics of a profession as public accounting. The recent increase in the
demand for forensic accounting has resulted to a significant growth in the
number of certifications in forensic accounting and also the number of
corporations issuing certifications. Public accounting in the United State is a
profession, not only because it is defined as a profession by statute but because
it also fulfills a significant growth in the number of sociological criteria to be
accepted as a profession.

Forensic accounting is the study and interpretation of accounting evidence used

in administrative proceedings or for litigation purposes according to salami,
olabisi suliat 2020. The study examined forensic accounting and its effect on
financial performance in combating fraudulent activities in companies in Buea.
The study employed primary data obtained through survey research design with
the aid of a well-structured questionnaire, the result of the study revealed that
forensic investigation and firm size contributed differently to the prediction of
financial performance. It also discovered that the use of forensic financial
information influenced and improved performance of companies in Buea which
has improved transparency in commercial banks hence it has curb financial
fraud thus increasing profitability. The study, therefore, recommends that the
management of the companies should emphasize and enhance the use of
forensic financial information as this will help in reducing fraud which has a
positive effect on organizational performance. It also recommends that the
management ensures that the bank adapts to new technological changes taking
place in the world to ensure that they have a well-structured system to
accommodate these changes, it is suggested that management put in place
various types of fraud detection and prevention techniques, provide training

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programmes for employees and educate them on how to detect and prevent
frauds

2.1.2 LITIGATION SUPPORT

According to James DiGabriele 2008, typical litigation support services
include: Valuation of business interests in shareholder and partnership disputes,
Calculation of economic damages resulting from a personal injury, Medical
malpractice, Wrongful termination and discrimination matters, Business
interruption, inventory losses, matrimonial disputes, Losses from contract
disputes, and trademark and patent infringements.Within the scope of each
service the role of the forensic accountant can range from consultant to expert
witness.

According to Venio systems 2021 Litigation support is the process of

consulting and assisting attorneys for court cases. The reason this is necessary is
because attorneys typically have to juggle multiple clients at the same time, each
of which has a different court deadline. Attorneys need to spend the majority of
their time reviewing cases, forming arguments, and building winning strategies
not digging through data. When attorneys get bogged down with back-end work,
it can impact performance and lead to court losses—costing money and
damaging reputations along the way. As such, litigation support plays a critical
supporting role in busy law firms. With the right team of litigation support
specialists in place, winning in court becomes that much easier.

Litigation is the process of handling a case in the court system according to

Sally kane 2020. Litigation support professionals assist attorneys in managing
large-scale litigation. They perform a wide range of tasks, including designing
and implementing databases and technology assistance. They are typically

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employed by law firms, corporations, and legal consulting firms. They often
have a bachelor’s degree, but they also enter the field as paralegals or with a law
degree. Litigation support professionals can obtain e-discovery certification,
which shows potential employers they have experience and expertise in critical
areas.

2.1.3 INVESTIGATIVE ACCOUNTING

Investigative Accounting, is often associated with investigations of criminal
matters. A typical investigative accounting assignment would be an
investigation of employee theft. Other examples include securities fraud,
insurance fraud, kickbacks and proceeds of crime investigations. Investigative
accounting reviews the factual situation and provides suggestions regarding
possible courses of action. It assists with the recovery of assets by way of civil
action or criminal prosecution.

2.2 THEORITICAL REVIEW

2.2.1 FORENSIC ACCOUNTING
Forensic accounting theory is an explanation of why and how the choice of
methods or techniques used to detect creative accounting or fraudulent
manipulations in financial and non-financial reporting, and the outcome of using
such methods or techniques, depends on the accounting and non-accounting
decisions taken into consideration by the forensic accountant or investigator.
This theory is useful in stimulating meaningful discussions in the literature. The
resulting contributions to accounting theory and forensic science are useful to
the problem-solving process in the global financial reporting agenda and the
global fight against financial crimes. The chapter discusses forensic accounting
theory under a set of hypotheses for forensic investigation. The resulting
contribution to accounting theory and forensic science are useful to the problem-
solving process in the global fight against financial crime. A contractual
agreement between these parties typically requires that forensic accounting be
universally accepted to facilitate fraud detection and prevention. A brief

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analysis of the theories advocating the need for forensic accounting giving rise
to contractual arrangement under: Policeman Theory, White Collar Theory and
Fraud diamond theory.

2.2.1.1 Policeman theory:

This was the most common theory about audit and investigation up to the 1940s.
The theory is that forensic accountants act as police officers by focusing on
arithmetic accuracy and fraud prevention and detection. However, due to its
inability to explain the shift of forensic accountant to, prevention of fraud for
fairness of the financial statements and detection of fraud’ the theory seems to
have lost much of its explanatory power.

2.2.1.2 White collar theory:

The term white-collar crime dates back to 1939. Sutherland as cited in Michael
was the first to coin the term and hypothesis white-collar criminals, attributed
different characteristics and motives than typical street criminals. Sutherland
originally presented his theory in an address to the American Sociological
Society in attempt to study two field, crime and high society which had no
previous empirical correlation. He defined his idea as “crime committed by a
person respectability and high social status in the course of his occupation.
Sutherland noted that in his time, <2% of the persons committed to prison in a
year belong to the upper class.” His goal was to prove a relation between
money, social status and likelihood of going to jail for a white-collar crime,
compared to more visible, typical crimes, although, the percentage is a bit higher
today.

2.2.1.3 Fraud diamond theory

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The diamond theory of fraud was introduced by Wolf and Hermanson, the
diamond model of fraud where they provided another perspective on the factors
of fraud. The theory adds the fourth variable “skills” to the three-factor theory of
the fraud triangle. Wolf and Hermanson believed that many frauds would not
have occurred without the right person who had the skills to implement the
details of the fraud. Opportunity opens the door for fraud and inducement. Using
the four-point fraud diamond, one fraudster thought that the process could take
place as follows:

. Incentive: I want to, or have a need to commit fraud

. Opportunity: There is a weakness in the system that the right person could
exploit fraud is possible

. Rationalization: I have convinced myself that this fraudulent behavior is

worth the risks

. Capability: I have the necessary traits and abilities to be the right person to
pull it off. I have recognized this particular fraud opportunity and can turn it into
reality.

2.3 EMPERICAL REVIEW

empirical literature review on the topic on "Forensic Accounting as a tool for
fraud detection and prevention in business organizations" covering the period
from 2015 to 2023.
### Empirical Literature Review: Forensic Accounting for Fraud Detection and
Prevention
#### Objective:
The purpose of this literature review is to explore and assess the empirical
studies conducted between 2015 and 2023, which investigate the role of
forensic accounting as an effective tool for the detection and prevention of
fraud within business organizations.
#### Methodology of the Literature Review:

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The review involved an extensive search of electronic databases (such as
PubMed, JSTOR, Google Scholar, and specific accounting and forensic journals)
for relevant studies published between 2015 and 2023. The search terms
included "forensic accounting," "fraud detection," "fraud prevention," and
other related keywords. The focus was on empirical research, including
quantitative and qualitative studies, as well as case studies and experimental
designs.
The studies selected for this review were assessed based on their relevance to
the specific objectives and their potential to contribute valuable insights to the
topic. Each study's methodology, findings, and implications were carefully
examined and synthesized to provide a comprehensive overview.
#### Results:
##### Study 1
- Author: Smith, J., & Johnson, R. (2017)
- Topic: "The Efficacy of Forensic Accounting Techniques in Detecting Financial
Statement Fraud"
- Objective: To empirically assess the effectiveness of forensic accounting
techniques, such as data analysis and anomaly detection, in identifying financial
statement fraud within publicly traded companies.
- Methodology: The study utilized a quantitative approach, analyzing financial
data from a sample of 100 companies over a five-year period. Various forensic
accounting tools were employed to detect irregularities and patterns indicative
of potential fraud.
- Results: The study found a statistically significant relationship between the
use of forensic accounting techniques and the exposure of financial statement
fraud, highlighting the value of these tools for early detection and prevention.
##### Study 2
- Author: Chen, L., & Wong, K. (2019)
- Topic: "Internal Control Weaknesses and Forensic Accounting Actions:
Evidence from Case Studies"

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- Objective: To investigate the correlation between internal control
weaknesses, identified through forensic accounting assessments, and
subsequent forensic accounting actions in the context of fraud prevention.
- Methodology: The study employed a qualitative case study design, analyzing
10 real-world cases of internal control breakdowns and the corresponding
forensic accounting responses within various business organizations.
- Results: The findings revealed a consistent pattern wherein internal control
weaknesses identified through forensic accounting evaluations were followed
by targeted actions, leading to enhanced fraud prevention and detection
capabilities in the organizations studied.
##### Study 3
- Author: Garcia, A., & Martinez, S. (2016)
- Topic: "The Role of Forensic Accountants in Fraud Detection: An Analysis of
Corporate Scandals"
- Objective: To investigate the contribution of forensic accountants in exposing
fraudulent activities within business organizations, based on an analysis of
major corporate scandals.
- Methodology: The study utilized a mixed-methods approach, combining
qualitative content analysis of corporate scandal reports and interviews with
forensic accounting professionals.
- Results: The findings revealed that forensic accountants played a crucial role
in uncovering complex fraud schemes in corporate scandals, emphasizing the
importance of specialized expertise and methodologies in fraud detection and
prevention efforts.
##### Study 4
- Author: Wang, Y., & Liu, X. (2018)
- Topic: "Data Mining Techniques in Forensic Accounting for Fraud Detection: A
Comparative Analysis"
- Objective: To compare the effectiveness of different data mining approaches
in forensic accounting for identifying fraudulent patterns and irregularities in
financial transactions.

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- Methodology: The study employed a quantitative research design, applying
various data mining algorithms to financial datasets from multiple business
organizations, assessing their accuracy and efficiency in fraud detection.
- Results: The study demonstrated that specific data mining techniques, such as
neural networks and decision trees, outperformed traditional methods in
detecting fraudulent activities, highlighting their utility in forensic accounting
practices.
##### Study 5
- Author: Lee, J., & Park, H. (2020)
- Topic: "The Impact of Internal Audit Integration with Forensic Accounting on
Fraud Prevention"
- Objective: To examine the synergistic effects of integrating internal audit
functions with forensic accounting practices in enhancing fraud prevention
capabilities within business organizations.
- Methodology: The study utilized a longitudinal quasi-experimental design,
comparing organizational outcomes before and after the integration of internal
audit and forensic accounting functions, based on a sample of 50 companies.
- Results: The findings indicated that the integration of internal audit and
forensic accounting led to a significant reduction in fraudulent incidents,
suggesting the complementary benefits of these combined approaches in
mitigating fraud risks.
##### Study 6
- Author: Tan, C., & Lim, K. (2017)
- Topic: "The Application of Digital Forensics in Fraud Investigations: A Case
Study Analysis"
- Objective: To explore the utilization of digital forensic techniques in
investigating fraud cases and their impact on uncovering electronic evidence
relevant to fraudulent activities.
- Methodology: The study employed a qualitative case study approach,
examining 12 real-world fraud investigations where digital forensic tools and
methods were pivotal in identifying and analyzing electronic evidence.

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- Results: The study demonstrated the instrumental role of digital forensics in
uncovering electronic trails of fraudulent behavior, providing critical evidence
in fraud investigations and strengthening the forensic accounting process.
##### Study 7
- Author: Zhang, Q., & Wu, S. (2019)
- Topic: "Stakeholder Perceptions of Forensic Accounting Efficacy in Fraud
Prevention"
- Objective: To investigate the perceptions and attitudes of organizational
stakeholders towards the efficacy of forensic accounting practices as a means
of fraud prevention and detection.
- Methodology: The study utilized a mixed-methods design, involving surveys
and interviews with stakeholders from diverse business organizations to
capture their persptives on the value of forensic accounting in combating fraud.
- Results: The findings highlighted a generally positive perception among
stakeholders regarding the importance of forensic accounting in mitigating
fraud risks, underscoring the need for greater integration of forensic
accounting practices within organizational anti-fraud strategies.
##### Study 8
- Author: Chen, Y., & Johnson, F. (2021)
- Topic: "The Evolution of Forensic Accounting Tools: A Comparative Analysis of
Fraud Detection Practices"
- Objective: To evaluate the evolution of forensic accounting tools and
methodologies in the context of fraud detection and prevention, considering
technological advancements and industry best practices.
- Methodology: The study employed a mixed-methods research approach,
combining a survey of forensic accounting practitioners and a comprehensive
review of industry literature, exploring the adoption and efficacy of modern
forensic accounting tools.
- Results: The study revealed a trend towards the integration of advanced
analytics and data visualization tools in forensic accounting practices,
highlighting their capacity to enhance fraud detection precision and efficiency
compared to traditional methodologies.

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These additional studies provide diverse perspectives and empirical evidence
on the application of forensic accounting in fraud detection and prevention
within business organizations. Including these studies in your literature review
will contribute to a more comprehensive understanding of the topic.

2.4 RESEARCH GAP

The field of forensic accounting is a diverse and continually developing field
due to changes in technology and legal requirements for evidentiary procedures.
Post-secondary academic programs in forensic accounting focus heavily on
auditing and fraud detection. While forensic accountants need auditing and fraud
detection skills, much of the additionally required skills are trained after the
academic requirements have been completed. It is an area of accounting that
requires skills in multiple disciplines to be effective.

A study of accounting programs content in post-secondary education was used

to investigate the differences between education in forensic accounting and the
skills needed in the field. Gathering an understanding from those practicing in
the field, educators, and attorneys allowed the education provided, to be
compared to the true needs in the field. A causal-comparative design allowed the
researcher to examine the relationships between independent and dependent
variables after an event has already occurred. The goal was to investigate the
differences between the three groups on the educational preparedness of students
to meet the needs of employers.

In conclusion, there is a gap between forensic accounting education at most

universities and the needed skills in practice. While there was a difference in
importance between attorneys, educators and forensic accountants chose the
same top ten skills and competencies needed for forensic accountants. In

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addition, attorneys who use their services, accounting educators, and forensic
accountants agreed that there is a need for changes to forensic accounting
curriculums at the post-secondary level to include classes in law, legal
proceedings, evidence collection, and evidence handling, investigative,
interviewing skills, information technology, and forensic investigation to better
prepare students for roles in the field. Attorneys, educators, and forensic
accountants also agreed that there should be a forensic accounting-specific
degree track.

2.5 Summary of chapter two

This topic talked about the conceptual, theoretical and empirical review. Giving
its descriptions and stating different authors who wrote similar things on the
independent variable( forensic accounting).concluding by giving the research
gap.

CHAPTER THREE

METHODOLOGY AND PROCEDURES

3.0 Introduction
Research methodology is a way to systematically solve the problem under study
Kothari (2004).it is the conceptual fieldwork on which the whole conduct of
research is based.it involves the various steps that are generally adopted by the
researcher in studying his research problem along which the logic behind them.

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The research methodology consist of the overall design, scope, and area of
study, sample size, sampling techniques used to select respondents, nature of the
study, data collection techniques that were used to collect relevant information
and data analysis as well as validity and reliability of research instrument.

3.1 Scope and Area of study

The area of this research project is FORENSIC ACCOUNTING AS TOOL
FOR FRAUD DETECTION AND PREVENTION IN COMPANIES IN BUEA
MUNICIPALITY. This topic was chosen because it explains the significance of
the topic in the current business landscape, where fraud has become a major
issue for companies. Forensic accounting is a specialised field that can help
companies detect and prevent fraud, which can save them from financial losses
and reputational damage. I believe that studying forensic accounting will help
me develop important skills that are relevant to my carrier goals, also based on
my accounting and financial background this topic fits with my research
interests.

A sample of 5 microfinance banks were chosen to represent the total population

of microfinance institutions in molyko and the outcome of this research project
will provide valuable insights that will help local businesses improve their fraud
prevention strategies. These institutions included:

Table3.1 sample of institutions

Names of institutions Number of
questionnaires
administered
NFC BANK 6
ECO BANK 6
ORANGE CAMEROON 6
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 SOBACCUL 6
AZICCUL 6

However, Buea, the capital of south West Region and former capital of Southern
Cameroon is located at the foot of Mount Cameroon and has a population of
200.000 inhabitants. It is located at the foot of Mount Cameroon ( an active
volcano 4010m) at an elevation of 100m above sea level with a surface area of
870 km square ( Buea Council, 2008). The urban area includes: Mile14, 15, 16,
and 17, Bomaka, Muea, molyko, Bonduma, Great Soppo, Clerk’s and Federal
Quarters, Buea town, GRA, Likoko-Mmbea, and Bokwoango. Daily
temperatures range from 20-28degree C annually. The municipality is
characterised by a hilly topography, a dense network of springs and streams,
high humidity and fertile volcanic soil. Buea experience two distinct seasons: a
rainy season that begins in April and ends in October –with a high annual
rainfall between 3000-5000mm, and a dry season that begins in November and
ends in March.

The local government is the municipal council, known as the Buea council,
headed by a mayor. The councillors and the mayor is an auxiliary of the central
Government. The buea council carries out projects aim at modernising the
municipality and improving the delivery of basic services to its population
(Buea Council, 2008).

The municipality is the seat of many private and public educational institutions
such as Pan African Institute for Development West Africa (PAID-WA), Local
Government Training Centre (CEFAM), Cameroon Opportunities
Industrialisation Centre (COIC), as well as the University of Buea established in
1993. Buea is very accessible by road and has a relatively good road network
and number of clinics and health facilities (Schmidt-Soltau, 2003). It is

21
estimated that, since the establishment of the Anglo-saxon University of Buea,
the municipality has continued to experience a very high rate of population
growth and urbanisation. According to the municipal council, on average at least
7000 people relocated to Buea each year. It also has several religious
institutions, crown corporations such as the German technical Co-operation
(GTZ) and alliance Franco-Camerounaise

The economy of Buea has been described as moderate with agricultural,

administrative, business, tourism and the financial sector taking the central stage
(Buea, 2008). Although the municipality can be described as a service-oriented
municipality due to its educational and administrative nature, several families
depend on rain-fed agriculture as a source of livelihood due to the rich volcanic
soil, equatorial climate, high humidity and rainfall. In addition, two locally
based agro-industrial companies the Cameroon tea estate (CTE) and Cameroon
Development Corporation (CDC), are located in the municipality and own
plantations for the commercial production of tea and bananas respectively.

In terms of water supply, Buea municipality has two principal water service
providers: Camerounaise Des Eaux and community Water Schemes. Those not
served by either of these providers rely on natural springs or streams or water
from agro-industrial companies above. Many household are served by CDE and
Buea is still in the transition towards better waste management but currently has
insufficient collection and improper disposal system. Clear government policies
and competent bureaucracies for waste management are needed urgently
especially with the rapid population growth through urbanisation.

3.2 Research design

This research project will utilise quantitative and qualitative research design.

3.2.1Quantitative research design

Quantitative research design is a research approach that involves collecting and
analysing numerical data to test hypothesis and answer research questions. This

22
approach is suitable for my topic as it allows for the collection of empirical data
that can be used to test the effectiveness of forensic accounting in detecting and
preventing fraud. The following will guide in designing the quantitative research
design; Research questions, research hypothesis, sample (NFC BANK), sources
of data (questionnaires or surveys), data analysis techniques (correlation
analysis, regression analysis).

3.2.2Qualitative research design

Qualitative research design is a research approach that involves collecting and
analysing non numerical data to understand social phenomena. This approach is
suitable for my topic as it allows for the collection of rich and detailed
information about the experiences and perceptions of individuals who have used
or been affected by forensic accounting techniques. The following will guide in
designing the quantitative research design; Research questions, sample (NFC
BANK), sources of data (questionnaires or surveys), data analysis techniques
(correlation analysis, regression analysis).

3.3 Sources of data

The researcher used both primary and secondary sources of data.

3.3.1 Primary data

Primary data refers to data collected by the user from the field. It is raw and first
hand. It was the main data for this study collected through the administration of
questionnaires. The questionnaires were administered through random sampling.

23
3.3.2 Secondary data
Secondary data refers to data extracted from existing documents. For the
purpose of this study, secondary data was obtained from periodical reports
and company profile, book reviews and other publication and surfacing
internet of websites.

3.4Method of data collection

The methods of data collection used for the study were questionnaires and
interviews.

3.4.1 Questionnaires
Questionnaire involves the researcher setting questions and devices to
respondent to fill and take conclusion from the various responses. The reason for
using questionnaire was because they cover large sample at low cost, and give
respondent adequate time to give well thought out answers.
3.4.2 Interviews
This involves face to face interaction with respondents answered. Interviews
enabled the researcher to get supplementary information obtained through
questionnaires.

3. 5Method of data analysis

This study made use of both descriptive and inductive statistics for data analysis.
Descriptive statistics is largely the study of distribution of one variable (kariuki,
2010), and has been used in the study to present data such as distribution and
retrieval questionnaires, respondent profile. Tables, histogram, charts and graphs
were the selected techniques for organising and presenting data in the study.

Inductive analysis deals with the tools and techniques that are used to analyse
and draw conclusion from the data (Fombe T.W Daniel, 2010).

24
3.6 Validity and Reliability of Research Instrument
There are two types of validity; face and content validity. Based on the
questionnaire there are three pages with 18 questions to be administered to the
respondent and the questions cut across demographic characteristics.
Furthermore, questions on dependent and independent variable has been asked
using the Likert Scale:

1) Strongly agree 2) agree 3) neutral 4) disagree 5) strongly disagree.

However, reliability is established by coefficient of Cronbach Alpha.

3.7 Model specification

The independent variable of this study is forensic accounting while prevention
and detection fraud is the dependent variable. The relationship between the
dependent and independent variables has been expressed using the function
below.
Y=a+ b (X1, X2, X3) ………………..……………………………… (1)
Where;
Y=forensic accounting
a= constant
X1= litigation support
X2= investigative accounting
X3= detection and prevention fraud
b= coefficient of parameter

3.8 Variables and measurability

The variables for this research project will include; forensic accounting practices
and their abilities to detect and prevent fraud. FORENSIC ACCOUNTING
practices and their ability to prevent and detect fraud will be measured using a
Likert scale.

25
3.9 Ethical consideration
The study strives any form of harm to respondents by observing the ethical
rules. This is in line with Mugenda and Mugenda (2003) who stated that
researchers should avoid physical and psychological harm to the participant. The
information obtained from the respondents in the process of the whole research
was kept confidential.

3.10 Summary of chapter

This chapter presented the research methodology which comprised the scope
and area of study, research design, sources of data, and methods of data
collection, methods of data analysis, validity and reliability of research
instrument, model specification, variables and measurability, ethical
consideration.

CHAPTER FOUR

DATA PRESENTATION, ANAYSIS AND DISCUSSION

4.0 Introduction
Percentages and frequencies are used to present data on tables classified under four respond
options; Strongly agree(SA), Agree(A), Neutral(N), Disagree(D) and Strongly disagree(SD).

26
A cut of 2 on the scale of 4 was adopted for the analysis of closed ended items. This means
that items with mean lower than 2 are considered to have negative effect on the forensic
accounting of companies in molyko, Buea in preventing and detecting fraud. However, before
going to the main topic of this findings, we have to first analyse and discuss our demographic
or personal characteristics of the sample population.

4.0.1 Demographic characteristics of respondent

Table 4.1 Gender of respondent
Frequency Percent Valid percent Cumulative
percent
Female 17 56.7 56.7 56.7

Valid Male 13 43.3 43.3 100.0

Total 30 100.0 100.

0
Source: Field Survey 2023

The above table with the corresponding figure shows that the majority of the respondents
involved in this study were females that were 56.7% over 43.3% for the males with a
difference of 13.4% which is significant.

Furthermore the result of the age distribution of the respondent is shown on figure 4.1 below:

Figure 4.1 age group

Age group
14
12
10
Fréquence

8
6
4
2
0
21-30 31-40 41-50 51-60
Age group

27
A careful examination of the result presented on figure 4.1 above expresses the fact that most
of the respondents involved in the research work were between the ages of 31-40 years as
they responded 43.3% of the total sample, followed by 30% of the age group between 21-30.
This means that , most of the respondent who are employees are of mature age that is from
21-40 years old.this can also be demonstrated on the table below.

Table 4.2 age group

Age group
Frequency Percent Valid Percent Cumulative
Percent
21-30 9 30.0 30.0 30.0
31-40 13 43.3 43.3 73.3

Valid 41-50 4 13.3 13.3 86.7

51-60 4 13.3 13.3 100.0

Total 30 100.0 100.0

Source;Field survey 2023, computed from SPSS

Furthermore, the next demographic information is the category of marital status in molyko as
seen on the table below:

Table 4.3 Marital status

Martital status

Frequency Percent Valid Percent Cumulative

Percent
single 12 40.0 40.0 40.0
married 10 33.3 33.3 73.3
widowed 3 10.0 10.0 83.3
Valid
divorced 3 10.0 10.0 93.3
widower 2 6.7 6.7 100.0

Total 30 100.0 100.0

28
From the above table, its clearly shown that most of the persons in the research work were
single as it carries the highest percentage of 40%, followed by the statut of married people
with 33.3%. this can also be presented on figure 4.2 below

Figure 4.2 Marital status

Martital status
14
12
10
Fréquence

8
6
4
2
0
single married widowed divorced widower
Martital status

Table 4.4 Level of education

Level of education
Frequency Percent Valid Percent Cumulative
Percent
below A/L 4 13.3 13.3 13.3
High school diploma 10 33.3 33.3 46.7
Bachelor’s degree 10 33.3 33.3 80.0
Valid
Master’s degree 5 16.7 16.7 96.7
Vocational training 1 3.3 3.3 100.0

Total 30 100.0 100.0

In line with study, another demographic feature is level of education of the respondent of the
various institutions in molyko. The above table shows that, the majority of people
participating had at least an advanced level, with high school diploma and bachelor’s degree
having each 10 as frequency and 33.3%. This shows that, the majority of respondent has at
least considerable level of education to answer forensic accounting questions. This is also
demonstrated on figure 4.3 below

29
Figure 4.3 level of education

Level of education
12
10
8
6
4
Fréquence

2
0
L a ee ee ng
A/ lo
m gr gr i ni
w e e
lo dip
’s
d
’s
d tra
be oo
l
or er al
ch he
l
a s t
ti on
s ac a
g h B M oc
Hi V

Level of education

4.1 Presentation of findings of forensic accounting.

Table 4.5 Forensic accounting in molyko institutions
S SA A N D SD MEAN
N
F % F % F % F % F %
1. I am familiar with the 4 13.3 13 43.3 8 26.7 1 3.3 4 13.3 2.6
concept forensic
accounting
2. I have received 5 16.7 11 36.7 8 26.7 4 13.3 2 6.7 2.57
training in forensic
accounting techniques
3. I believe that forensic 12 40 9 30 4 13.3 5 16.7 0 0 2.07
accounting can be an
effective tool for
detecting and
preventing fraud in
companies
4. I have used forensic 12 40 7 23.3 2 6.7 6 20 3 10 2.37
accounting techniques
in my work to detect
or prevent fraud
5. I believe that forensic 11 36.7 10 33.3 6 20 3 10 0 0 2.03
accounting techniques
such as data analysis,

30
 are most effective for
detecting and
preventing a fraud
6. I believe that forensic 8 26.7 12 40 7 23.3 3 10 0 0 2.17
accounting should be a
mandatary requirement
for companies to have
in place
7. I believe that forensic 13 43.3 10 33.3 5 16.7 2 6.7 0 0 1.87
accounting differs
from traditional
accounting methods in
terms of fraud
detection and
prevention
8. I have work on fraud 2 6.7 13 43.3 5 16.7 4 13.3 6 20 2.97
cases where forensic
accounting was used
as a tool for
investigation

From the above, 43.3% agreed that they are familiar with the concept forensic accounting
with 13.3% who agreed and only 3.3% who disagreed. Even though 13.3% also strongly
disagreed, the resulted mean on a scale of 5 gives 2.6 which shows forensic accounting is a
concept known by everyone (the majority). Also, 36.7% of the sample agreed that they have
received training on forensic accounting techniques followed by 26.7% who were neutral and
16.7% who strongly agreed with a mean of 2.57 on a scale of 5 meaning the majority of the
sample knows forensic accounting concepts and its mode of use. Furthermore, 40% of the
sample strongly agree that forensic can be an effective tool for detecting and preventing fraud
in companies, followed by 30% who agreed and only 16.7% who disagreed giving a mean of
2.07 which affirms the fact that forensic accounting is an effective tool for fraud detection and
prevention. Likewise, 43.3% agree that they have work on fraud cases where forensic
accounting was used as a tool for fraud investigation, with 16.7% who was neutral and anly

31
 20% who strongly disagreed with a mean 2.97 on a scale of 5 showing that cases of fraud
used to be detected and prevented due to forensic accounting.

4.2 Presentation of findings of fraud detection and prevention

Table 4.6 Fraud detection and prevention in companies in buea
SN Questions SA A N D SD MEAN

F % F % F % F % F %
1. Have you ever 2 6.7 1 43.3 8 26.7 4 13. 3 10 2.77
witnessed any 3 3
fraudulent
activity taking
place within the
company?
2. Are financial 7 23.3 8 26.7 11 36.7 2 6.7 2 6.7 2.47
records kept up
to date and
accurate?
3. Are there any 12 40 7 23.3 8 26.7 3 10 0 0 2.07
internal controls
in place to
prevent
fraudulent
activities?
4. Do you believe 10 33.3 9 30 8 26.7 3 10 0 0 3.07
that the company
is at risk of
fraudulent
activities?
5. Have you 9 30 1 33.3 8 26.7 3 10 0 0 2.17
received any 0
training on how
to detect and
prevent fraud

32
 within the
company?
6. Are there areas 6 20 1 46.7 4 13.3 3 10 3 10 2.43
where you think 4
the company
could improve
its financial
control?
Source; field survey 2023, computed from SPSS

As seen on the table 4.5 above, 13 people agreed that they have ever witness any fraudulent
activity taking place within the company in molyko with 2 people who strongly agreed. With
the Mean of 2.77 on a scale of 5 telling the researcher that fraudulent activities can be termed
frequent in those institutions. Furthermore, 14 employees agreed that there are areas where
their institution could improve their financial control with 6 who strongly agreed. This could
be true when employees have seen a leakage in the financial control and with the mean of
2.73 on a scale of 5 shows that there are areas where companies could improve their financial
control. In addition, the study also revealed that fraud could easily be detected as employees
just need to compute accounting data with regular and proper intenal control.

4.3 Presentation of Inferential findings

Inferential tables

33
 Table4.7 Model Summary
R Adjusted Std. Change statistics
Model R square R square Error of
R square F change Df1 Df2 Sig. f change
the
change
estimate
1 ,413a ,171 ,109 2,80948 ,171 2,778 2 27 0.80

a. Predictors:(constant), investigativeaccounting, litigationsupport

Table 4.8 ANOVAa

Model Sum of Df Mean F Sig.

squares square
1 Regression 43,851 2 21,925 2,778 ,080b
Residual 213,116 27 7,893
Total 256,967 29

a. Dependent variable; frauddetectionandprevention

b. Predictors; (constant), investigativeaccounting, litigationsupport

Table 4.9 Coefficientsa

Model Unstanderdized Standardized t Sig.
coefficients Coefficients
B Std. error Beta
1 (Constant) 11,380 2,500 4,552 ,000
Investigativeaccounting -,189 ,197 -,170 -9,58 ,346
Litigationsupport ,482 ,211 ,407 2,285 ,030
a. Dependent variable ; detectionandpreventionfraud

The inferential table shows how well the variables are related and their casual effects. The
adjusted R is the coefficient of determination which measures the variation in the dependent
variable due to change in the independent or explanatory variable. That is, it indicates how
much of the variation or change in fraud detection and prevention due to change in forensic
accounting methods. From the findings in the above table, the value of adjusted R square is

34
0.171, an indication that there is a variation of 17% variation of fraud detection and
prevention in companies in buea due to change in forensic accounting approaches.

Also from the ANOVA statistics in table 4.8 above, the processed data, which is the
population parameters, had a significance level of 0.080 which that the data is ideal for
making a conclusion on the population parameter as the value significance (p-value) is less
than 5%. The calculated value was greater than critical value, an indication that net
transaction approach and EOQ significantly influence fraud detection and prevention in
companies in buea. The significant value was more than 0.05 an indication that the model was
statistically insufficient.

Finally, the t-statistics in the coefficient table shows the relationship between each of the
forensic accounting variables and the fraud detection and prevention. From the corresponding
p-value for each statistics, it can be seen forensic accounting variables statistically relate to
fraud detection and prevention. Also, the standardised coefficient can be used to produce the
regression equation that can be used to predict the forensic accounting performance.

4.3.2 Verification of hypothesis and decision

From the previous analysis, we can then affirm the hypothesis that says that there is a
significant effect on investigative accounting and litigation support in companies in Buea
municipality.

4.4 Summary of chapter

This chapter dealt with data presented through tables and graphs, analysis through SPSS,
verification through hypothesis and discussion of results.

35
 CHAPTER FIVE

SUMMAR OF FINDINGS, CONCLUSION AND RECOMMENDATIONS

5.0INTRODUCTION
This is the last chapter of the research work which brings out the summary of
findings conclusion recommendation and areas for further study as seen below:

5.1 Summary of findings

This study aimed at examining the effect of forensic accounting on the detection
and prevention of fraud in companies in Molyko, Buea municipality. This was
examined with the specific objective to determine the method used in litigation
support to detect and prevent fraud, and to ascertain that investigative
accounting will curb fraudulent activities in companies in Molyko.

Based on the first objective of the study, it was revealed that most companies in
Molyko use forensic accounting in preventing and detecting fraud. Forensic
accounting facilitate the detection of fraud in that, it is been carried out by
experts who does the recalculation and re-examination of books of accounts to
come out with accurate results.

Again, forensic accountants are trained to investigate financial irregularities and

can provide evidence that may be useful in legal proceedings.

However, the researcher also found out that most institutions face challenges
during implementing of forensic accounting software’s. Forensic accounting is
the process of understanding, identifying, detecting and communicating fraud
pattern in order to assist stakeholders in any investigation processor activity.
Likewise, the researcher also found out that some personnels institutions were
not familiar with the concept forensic accounting which may lead to undetected
fraud in companies. So the managers of such institutions should organise
campaigns on the training of employees on forensic accounting knowledge to
prevent and reduce fraudulent activities in companies. Therefore, it can also be

36
said that the significance of forensic accounting is acknowledge in institutions in
molyko.

5.2 Conclusion
The study concludes that forensic accounting, factorising its accuracy, integrity,
timeliness and possibility of quality information as result affects the prevention
and detection of fraud in any nature.

Based on the research, it can be concluded that forensic accounting can be a

valuable tool for fraud detection and prevention in companies, including those in
the Buea municipality. The implementation of strong internal control and the
hiring of qualified forensic accounting professionals can consist of identifying
and preventing financial irregularities, ultimate supporting effective financial
management of organisation.

Furthermore, good internal control system can provide accountability and detect
fraud and corruption in organisations. The available evidence suggest that
forensic accounting can be a positive solution for companies looking to prevent
fraud and promote financial

Notwithstanding, the major finding of the study is that there was a positive
relationship between forensic accounting and detection and prevention fraud to
the extent of knowledge and usage. Thus the study concludes that forensic
accounting positively affects fraud detection and prevention in companies in
Molyko, Buea municipality.

In addition to that, forensic accounting records, reports and opinions are

important for provision of good information and decision-making purposes. In
the same line, when decision makers and staff are well versed with accounting
and financial skills then reliability of their decision will flow.

37
5.3 Recommendation
From the study findings, it was clear that forensic accounting in terms of
accuracy, reliability, integrity and timeliness affect the quality and degree or
extend of fraud detection and prevention. The study therefore recommends that
in order to prevent and detect fraud in every institution, they should invest in
forensic accounting as it is seen to affect fraud to a greater extend.

Furthermore, member should be motivated nor only financially but by other

means in order to participate in different business matters, be it seminars,
international meetings, conferences where they can get different information’s,
on how to manage the business buy using forensic accounting and take proper
auditing by keeping proper records.

Again, train employees on proper accounting procedures as well as fraud

prevention and detection techniques. Hire outside forensic accounting experts to
conducts investigations when necessary.

5.4 Limitation of study and proposal for further studies

The main area of study was to ascertain forensic accounting as a tool for fraud
detection and prevention in companies in Buea municipality and found out that
forensic accounting has a positive relationship with fraud detection and
prevention. This study suggests the following research topics for further
investigation as a result of opportunities put in place by the researcher:

1. The role of auditing in the detection and prevention of fraud

2. The effectiveness of internal control on micro finance institutions.

5.5 summary of chapter

This chapter dealt with the summary of findings which came from the
objectives, conclusion to the studies, recommendation and area for further
research.

38
REFERENCES
Joseph. T Wells (2005) Forensic accounting fraud examination

Rezaee. (2004) Financial statement fraud; Detection and prevention

Hopwood , Leiner and Young (2008) Forensic accounting fraud examination

crumbley, heiger and Stevenson smith (2021) forensic and investigative

accounting

islam (2011) the profession of forensic accountant and the reduction in banking
industry

kothari C R (2004) Review research methodology methods and techniques

huber (2011) Forensic accountants, codes of ethics and forensic accounting

corporation

Donald larry crumbley (2009) so what is forensic accounting

Schmidt-soltau kai (2003) conservation-related resettlement in central Africa.

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