EFFECT OF FORENSIC ACCOUNTING SKILLS ON TAX FRAUD INVESTIGATION BY FEDERAL INLAND REVENUE SERVICES IN NIGERIA

Abstract

This study examines the impact of forensic accounting skills on tax fraud investigations conducted by the Federal Inland Revenue Service (FIRS) in Nigeria. Employing a mixed-methods approach, the research combines quantitative analysis of 222 FIRS investigators with qualitative insights from 20 senior staff members. The study reveals a strong positive correlation (r = 0.783, p < 0.001) between forensic accounting expertise and investigation success rates. Analysis of variance demonstrates that investigators with advanced forensic skills handle significantly more complex cases (F(2, 219) = 78.42, p < 0.001, η = 0.417). Multiple regression analysis identifies key organizational factors, including training, technological infrastructure, and management support, as significant predictors of effective forensic accounting skill utilization (R = 0.624, p < 0.001). These findings underscore the critical role of forensic accounting in enhancing tax fraud detection and prosecution capabilities. The study contributes to the growing body of literature on specialized accounting skills in combating financial crimes, particularly within the Nigerian tax administration context. Recommendations include implementing comprehensive forensic accounting training programs, establishing specialized units, and fostering interdepartmental collaboration. This research provides valuable insights for policymakers and tax administrators, highlighting the potential for improved tax revenue collection and overall economic stability through enhanced forensic accounting capabilities.