ABSTRACT
This study aims at exploring the role of an accountant in curbing corruption in Nigeria. The
objective of the research work seeks to explore the role an accountant can play in the fight
against corruption by applying his investigative skills, providing litigation support service
and documentation and reporting. The population used in the research was the University
College Hospital (UCH). The research design employed was the survey research. Data were
majorly collected from primary sources. The hypothesis testing in this research work was
done using Chi-Square. The results of the empirical findings show that accountants are
relevant in investigating crime and corruption in Nigeria. Accountants play a role in litigation
support services in Nigeria, and accountants are relevant in documentation and reporting. It
was observed that accountants play a significant role in curbing crime and corrupt practices in
any public sector since they provide a mechanism to hold people accountable, such that those
who manage resources in a fiduciary capacity do not easily abuse that trust without detection.
Amongst other proffered solutions, it was recommended that accounting professionals should
always act proactively such that the members of the profession in Nigeria are kept abreast of
emerging technologies, especially in the area of accounting. The legislature should also see to
it that the executive grants full autonomy to the agents of government that are charged with
enforcing accountability. Office of the Auditor-General of the Federation, the Economic and
Financial Crimes Commission, Independent Corrupt Practices Commission, and Code of
Conduct Bureau, should be fully independent entities free to do their jobs without undue
meddling and interference.
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TABLE OF CONTENTS
Page
Title Page i
Declaration ii
Certification iii
Dedication iv
Acknowledgements v
Abstract vi
Table of Contents vii
List of Tables ix
List of Figures xi
CHAPTER ONE: INTRODUCTION
1.1 Introduction 1
1.2 Background to the study 1
1.3 Statement of the problem 4
1.4 Objectives of the study 5
1.5 Research questions 5
1.6 Statement of the hypotheses 6
1.7 Significance of the study 6
1.8 Justification of the study 7
1.9 Scope of the study 8
1.10 Definitions of terms 8
CHAPTER TWO: LITERATURE REVIEW
2.0 Introduction 10
2.1 Conceptual frame work 11
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2.2 Theoretical frame work 19
2.3 Literature on the subject matter 26
CHAPTER THREE: RESEARCH METHODOLOGY
3.0 Area of study 35
3.1 Research design and sources of data 36
3.2 Study population and determination of sample size 38
3.3 Instrumentation 38
3.4 Procedure for data collection and data analysis 39
3.7 Limitations of the study 40
CHAPTER FOUR: DATA ANALYSIS, FINDINGS AND DISCUSSION
4.0 Introduction 41
4.1 Findings of the study 41
4.2 Test of hypothesis 53
4.3 Discussion of the findings 58
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Summary of findings 60
5.2 Conclusion 60
5.3 Recommendations 61
5.4 Proposal for further studies 62
References 63
Appendix 67
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LIST OF TABLES
Table 2.1: Nigeria’s stance on the corruption perception index of the TI over ten years 32
Table 4.1.1: Gender of the respondents 41
Table 4.1.2: Age of the respondents 42
Table 4.1.3: Status of respondents 42
Table 4.1.4: Educational Background of the Respondents 43
Table 4.1.5: Years of Experience of the Respondents 43
Table 4.1.6: Is corruption truly rampant in the accounting firm in Nigeria? 44
Table 4.1.7: Is level of corruption in Nigeria a function of bad governance? 44
Table 4.1.8: Do you think that the accounting firm is capable or able to fight
corruption in Nigeria? 45
Table 4.1.9: Do you think that the use of accounting information will enhance
our society in dealing and fighting with the problem of corruption? 46
Table 4.1.10: Do you think that accountants are the main role/lead to curb or fight
corruption in Nigeria? 46
Table 4.1.11: Do you think that the effectiveness of accounting firm will be able
to eradicate corruption in Nigeria? 47
Table 4.1.12: Does accountant search for evidence of criminal conduct or assist the
determination of or rebuttal of claimed damages? 47
Table 4.1.13: Does accounting provide assistance with the protection and recovery
of assets? 48
Table 4.1.14: Doesaccounting provides coordination of other expert including, private
investigations, forensic document examiner, consulting engineers in
fighting corruption? 48
Table 4.1.15: Do accountants review the relevant documentation to form an initial
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assessment of the case in an identified area of loss? 49
Table 4.1.16: Do accountants attend the examination for discovery to review the
testimony, assist with the understanding the financial issues and to
formulate additional questions to be asked during curbing corruption? 50
Table 4.1.17: Do accountants obtain documents necessary to support or refute a claim? 51
Table 4.1.18: Do accountant provides relevant parties with report to judge the expert’s
opinion and the basis for curbing corruption? 51
Table 4.1.19: Does auditor leaves audit trail in carrying out his investigation? 52
Table 4.1.20: Is accountant’s report designed to support the curbing of corruption in
Nigeria? 52
Table 4.2.1: Testing of the 1st Hypothesis 54
Table 4.2.2: Testing of the 2nd Hypothesis 56
Table 4.2.3: Testing of the 3rd Hypothesis 58
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LIST OF FIGURES
Figure 2.1: Fraud triangle 22
Figure 2.2: Fraud diamond 23
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CHAPTER ONE
1.1 INTRODUCTION
Nigeria became an independent nation on the 1st October 1960 a country richly endowed
with monumental geographical and diverse natural resources ranging from crude oil to gas
Nigeria possesses potential market ability for rapid economic development. However, in spite
of these obvious resources and its advantage, Nigeria remains a poor and underdeveloped
country. Scholars have achieved and advanced several reasons to explain this parlous and
depleting state. One of the major and prominent factors advanced is corruption.
Corruption has been a major problem in Nigeria since independence, numerous state
institutions have become dysfunctional because of large-scale corrupt practices, Projects are
routinely abandoned, and no one is brought to book, public goods and resources are diverted
to private ends.
Corruption endangers the good governance and the democracy we see today, Corruption was
cited as one of the more prominent reasons for Nigeria’s first military coup by the coups of
January 15th, 1966 military putsch, Massive corruption and resources brigandage also were
cited as reasons for the military takes over by the regime of Buhari and Tunde Idiagbon on
December 31st, 1983.No society can achieve its full potentials if allows corruption to become
a full-blown cancer as it has become in our nation.
1.2 BACKGROUND TO THE STUDY
Corruption is a global phenomenon. It occurs in both the developed and the developing
countries of the world. The difference however is that in the developed countries, it does not
obstruct the normal functioning of state and social system in the same way, because there are
established ways of dealing with the problem. Corruption is however of special concern in
developing countries. In the countries where poverty is widespread, those who pay and
receive bribes further expropriate the nation’s wealth leaving little for its poorest citizens. In
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such situations where corruption is systemic, even countries with extensive natural resources
may fail to develop in a way that benefits the ordinary citizen.
According to Michael (1997: 69-90) corruption is of a symptom of deeper difficulties in the
society where it is prevalent and usually operates within the broader context of other social
problems. Thus, corruption is associated with slow economic growth, reduced investment
feeble property and contract right, effective institution, limited social interaction and weak
rule of law, poor economic competitiveness, deep ethnic division and conflicts. Low popular
participation in polities of civil liberty, low educational attainment, and closed economic and
political systems. In other words, corruption is pervasive in underdeveloped societies and
there is hardly effective means of combating the cankerworm. In Nigeria, corruption is a
pervasive phenomenon; corrupt practices have become synonymous with governance and
consequently, have become the bane of Nigerian society. According to Ake (1976: 3), the
widespread corruption of public officials could be attributed to the economic weakness of the
Nigeria ruling class, as fact that he in turn attributes to the colonial experience and to the
dependence of the Nigeria economy on international capitalism.
Corruption is not a recent phenomenon in Nigeria society. As noted by Ayose (2005: 87). On
February 26, 1952 during the dying days of colonialism, the Emir of Gwandu moved a
motion in the Northern House of Chief. “That this house agreeing that bribery and corruption
are widely prevalent in all walks of life, he recommends that Native authorities should make
every effort to trace and punish offenders with strict impartiality and to educate public
opinion against bribery and corruption”.
Indeed, the first anti-corruption war was launched by General Murtala Muhammed on 16th
September 1975. He set up a three-man panel to investigate and examine all the assets of
certain former officers to ensure that such officer have not abused their office in the
acquisition of such assets. This led to the retirement of many senior public officials and the
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much talk about mass purge. His regime that initiated the making of the 1979 constitution
provided for a code of conduct for public officers, a code of conduct Bureau for the
enforcement of the prescribed behaviour and a code of conduct tribunal. The Second
Republic (1979 – 1983) the Shagari administration launched an anti-corruption programme
Christened ethical Revolution and even appointed a minister of cabinet rank for national
guidance following his lamentation about the state of corruption in Nigeria. This was to raise
awareness and hopefully change deviant behaviour into conforming one. In spite of this
however, one of the reasons why his government was toppled was because of its weakness in
controlling corruption. The Buhari / Idiagbon regime (1983 – 1985) the regime launch an
anti-corruption programme called “war against indiscipline”. The government exhibited
seriousness to fight fraud, corruption, abuse of public office or graft and other similar vices.
The regime matched is pronouncement with action by not only promulgating draconian
legislation to control and prevent corrupt practices but brought to book people considered to
have been fraudulent of corruption.
Above all, the present administration of Muhammad Buhari has also adopted the Economic
and Financial Crimes Commission as one of the Commissions of combating corruption. From
the foregoing analysis, it is demonstrated that corruption is indeed a frightening problem in
Nigeria. It pervades every segment of the national atmosphere and has overwhelmed all
levels and branches of government, it undermines the goals of development, public funds are
often arbitrarily handled, use for private purposes or deposited in personal account including
fattening of foreign bank account. Consequently, government and social economic conditions
have badly deteriorated. The crime of corruption has always been viewed with particular
distaste. It is no coincidence that the word itself is also used in the phrase ‘corruption of the
flesh’, to indicate decay, death and malodorous happenings. It is often coined alongside the
word bribery, that is, the means by which officials are induced to become corrupt,” wrote
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Peter Johnston, former Chief Executive of the Scottish Institute of Chartered Accountants.
Olajide F (2000) notes that there is an alarming increase in the number of fraud and
fraudulent activities in Nigeria, requiring the visibility of accounting services. Therefore,
many foreign investors have lost several billions of dollars to fraudsters thereby leading to
reduction or even dis-investment from Nigeria and its attendant negative consequences on
economic growth and development. Appropriate legislation was enacted to criminalize all
corrupt conducts including unjust enrichment. Key institution like Independence Corrupt
Practices Commission (ICPC), Economic and Financial Crime Commission (EFCC) were
established to fight corruption.
Corruption is a term with many meanings, but generally, it entails misusing one’s office for a
private gain or unofficial end. It involves both monetary and non-monetary benefit. Bribery,
extortion, influence peddling, nepotism, frauds, ‘grease money’, and opportunism readily
spring to mind. Accounting unit serve as means of curbing corruption in Nigeria economy.
According to Waziri (2009), corruption afflicts virtually all parts of Nigeria society. It has
eaten deep into Nigeria value system and is now threatening to spread to the culture as public
adulation for wealth has increased. In this age of high technology, fraud investigators can no
longer be satisfied with just mere mouth but with accounting skills and treated by accountants
with extensive knowledge of accounting information (Bressler, 2006; Manning, 2005;
Ramswamy, 2005).
1.3 STATEMENT OF THE PROBLEM
One of the pertinent issues in Nigeria today is the focus on one of the greatest impediment to
good governance and sustainable development. In recent times, corruption has an issue taken
the front burner in development discourse worldwide since 1996; the World Bank has
supported more than six hundred (600) anti-corruption programmes and governance initiative
developed by its member countries.
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Ironically, the global financial body was embroiled in scandalous dealings that led to the
removal of its chairman.
Accountability is typically weak in Nigeria because the country is ripe for corruption
and rife with it
The motivation to earn extra income is extremely strong, worsened by poverty, low
and declining civil services
Thus, corruption has become a cankerworm in the political system, stifling it of its
potential sustainable growth.
1.4 OBJECTIVES OF THE STUDY
The major objective of this study is to examine the role of accountant in curbing corruption
in Nigeria. Other specific objectives to be achieved are:
1. Ascertain the extent to which accounting department of the organisation is being used
as a financial tool for measuring organisational performances.
2. Analyse the completeness of accounting records being kept by accounting department
for economic and financial decision making
3. Identify the duties and responsibilities of an accountant in the organisation
4. Determine the effectiveness of accounting department in curbing corruption in
organisation
5. Ascertain the relationship between incidence of fraud and investor loss of confidence
in organisation.
1.5 RESEARCH QUESTIONS
According to Gire, (1999) the rate at which corruption has grown in Nigeria is such that it
looks as if it has been legalized. The studies on corruption conducted by the Transparency
International in 1996 placed Nigeria as the most corrupt nation with Pakistan placing second
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from the rear out of 54 nations used in the study (Moore, 1997) As at year 2012, Nigeria was
still among the ten most corrupt countries in the world (Obayelu, 2007)
The aim of this research is to appraise role of accountants in curbing corruption in the society
i. What is the effect of corruption on Nigeria’s development?
ii. Can accountant’s contribution curb corruption?
iii. Does corruption affect the economic and political efforts in Nigeria?
1.6 STATEMENT OF THE HYPOTHESES
The following hypotheses have been formulated to serve as a base for this research:
Hypothesis 1
Ho: The level of corruption in the Nigeria polity is not a function of bad governance and
corrupt individuals.
Hypothesis 2
Ho: The accounting firm is not capable of fighting corruption in Nigeria.
Hypothesis 3
Ho: The use of accounting information has not enhanced society in dealing with the
problem of corruption.
1.7 SIGNIFICANCE OF THE STUDY
Accounting department of any corporate financial organisation are sometimes deeply
implicated in the global financial crisis of any country, due to their inability to carry out
financial transaction with due diligence, transparency and compliance with stated accounting
guidelines and regulation that in turn create rooms for criminal and fraudulent activities such
as money laundering, tax evasion, and others.
Accounting is increasingly seen as a social phenomenon rather than pure technical
phenomenon as it is implicated in both organisational and social context (Hopwood, 1985)
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following this notion, this study is motivated by the desire to understand the potential role of
accountant in corporate financial institution.
The significance of the study will go a long way to enlighten all people in managerial groups
on the importance of accounting information. That is, seeing accounting tools, as something
that cannot be avoided is the bedrock of management in taking decisions.
The Beneficiaries
Shareholders: This study will be important and beneficial to the shareholders who are
interested in their capital investment
The Government: Who really have interest in the profit to help them determine task and
other policies
The Managers: This study guides the managers to determine the profitability of a business
concern
The Tax Authorities: It enlightens the tax authorities and gives them the direction on how
to use accounting information for tax assessment
Public: The study shows the income and expenditure of a particular industry to the public
Financial Analyst: This study will help the financial analyst to provide a means by which
the finances of a business is controlled, to provide permanent records for all transactions,
and to know the assets and liabilities of the industry.
In addition, it makes some people to work directly in the field of accounting and to create
awareness of how accounting information works effectively and efficiently
1.8 JUSTIFICATION OF THE STUDY
The researcher now finds out that modern accountant and accounting firm is therefore
concerned not only with record keeping but also with focuses on the ultimate needs of those
who use accounting information, whether the users are inside or outside the business itself, so
accounting is not an end in itself. Instead, an information system measures, process and
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communicates financial information about an identifiable economic entity. The study intends
to examine how accounting information helps management, societies, institutions and others
to curb corruptions, takes decisions as regards the profitability of its products and maintain a
corrupt free economy.
1.9 SCOPE OF THE STUDY
Conceptually the study covers the implicit role accountants play as far as corporate financial
organisations are concerned in Nigeria. However, the research was limited to U.C.H in
Ibadan due to the schedule of the researcher.
1.9 DEFINITION OF TERMS
i. Accounting Department: These are special section of the organisation which provide
services and run by experienced accountants, like individual accountants, accounting
department can specialise in different areas of accounting such as business start-ups or
liquidations.
ii. Financial Accountant: The role of a financial accountant is to record, summarise and
report all the financial transactions of an organisation in such a way that it is possible
for someone outside the organisation to get an accurate picture of the organisation’s
position and performance.
iii. Internal Auditor: Evaluate and report the efficiency and effectiveness of the activities,
processes and procedures within an organisation. They involve in compliance, risk
management and corporate governance
iv. Management Accountant: Assist in strategic planning by providing accurate and
timely financial and non-financial information to the managers and key decision-makers
within an organisation.
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v. Accountant: An accountant is any person who possesses a professional license to
practise accountancy from a recognized professional body and has legal capacity and
authority to carry out the duties of accountants in taxation and audit practice.
vi. Accountancy: Accountancy is the composite activity of collecting, analysing,
recording, summarizing, reporting and interpreting the true financial position or
transaction of any organisation or government unit.
vii. Financial Report: is a formal record of the financial activities of a business, position,
or other entity. It also provides information regarding the position
viii. Fraud: This refers to a wrongful or criminal deception intended to result in financial or
personal gain. That is, an act or course of deception, omission or perversion of truth in
order to gain unlawful or unfair advantage
ix. Corruption: According to section 2 of I.C.P.C Act (2000), corruption simply connotes
impropriety and encompasses all forms of reprehensible, indecorous and infamous
conduct in the performance of some official and non-officials’ responsibilities. This
means any act, which go out of any normal societal behaviour
