THE IMPACT OF FORENSIC ACCOUNTING ON FINANCIAL PERFORMANCE OF NIGERIAN DEPOSIT MONEY BANKS

This study investigates the impact of forensic accounting on the financial performance of Nigerian deposit money banks, focusing on its role in fraud detection, internal control enhancement, and regulatory compliance. Utilizing an ex-post facto research design, the study analyzes secondary data from twenty two selected banks, over the period from 2017 to 2023. The research employs a linear multiple regression model to examine the relationship between forensic accounting (proxied by forensic audit, FAUD) and financial performance indicators, including Net Profit Margin (NPM), Profit After Tax (PAT), and Retained Earnings (RE). Findings reveal that forensic accounting significantly influences net profit margin and retained earnings, indicating its effectiveness in reducing financial fraud and enhancing financial stability. However, its impact on profit after tax was found to be statistically insignificant. The study underscores the mediating role of fraud detection, internal controls, and regulatory compliance in linking forensic accounting to improved financial performance. The results suggest that forensic accounting enhances transparency, curbs fraudulent activities, and strengthens corporate governance in Nigerian banks. Recommendations include increased adoption of forensic accounting practices, investment in technological advancements, and stricter enforcement of anti-fraud measures to bolster the financial health and sustainability of deposit money banks in Nigeria. This study contributes to the growing literature on forensic accounting and provides a foundation for further empirical research in the Nigerian banking sector.