AUDITOR'S RESPONSIBILITY FOR FRAUD DETECTION
By
ADEDEJI MICHAEL SEUN
19/01/0385
SUPERVISOR IN CHARGE
DR J.K OGUNWEDE
BEING A RESEARCH PROJECT SUBMITTED TO THE DEPARTMENT
OF ACCOUNTANCY, SCHOOL OF BUSINESS AND MANAGEMENT
STUDIES, IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR
THE AWARD OF HIGHER NATIONAL DIPLOMA (HND) IN
ACCOUNTANCY
MOSHOOD ABIOLA POLYTECHNIC, ABEOKUTA
OGUN STATE.
NOVEMBER, 2024
CERTIFICATION
This project was carried out and completed by ADEDEJI MICHAEL SEUN Marticulation
Number 19/01/0385 in partial fulfilment of the requirements for the award of Higher National
Diploma (HND), in Accountancy Department, School of Business and Management Studies,
Moshood Abiola Polytechnic, Abeokuta, Ogun State.
DEDICATION
This project is dedicated to Almighty God the beginning and the end of everything, MR AND
MRS ADEDEJI for their financial and moral support and also my supervisor DR J.K
OGUNWEDE.
ACKNOWLEDGMENTS
Firstly, I give glory to Almighty God for sparing my life and bringing the journey that seems
unending to an end. My sincere appreciation goes to the Director Dr O.A Oyebolu, Sub-Dean-
Dr. L.A Osho, Head of Accountancy Department and my project supervisor Dr J.K Ogunwede, ,
for their kind effort on this work, may Almighty God never stops his blessing on you. A great
appreciation also goes to the lecturers in the departments, Mr. [Link], Dr.
[Link], Mr H.O Adesile, Dr (Mrs.) [Link], Dr O.O Omotilewa, and Mr. Idowu Oriade
and all other Lecturers. By God's grace you shall not diminish, may God continue to bless you
and your household. I can't but acknowledge the moral and financial support of my parents. I
pray you shall eat the fruit of your labour and may God bless you for all you do. My appreciation
also goes to my lovely siblings for their full support, care and financial aspect throughout my
aacademic journey. I pray may Almighty God grant your heart desires and guide and provide for
your need. .I owe gratitude to every member of my family, am grateful to you all. I am also
grateful to all my friends for their influence towards my learning, for their unflinching support,
uncompromising love, encouragement and prayers, throughout the period of my study.
Finally, I remain indebted to all the authors of the materials I used. I say thank you all
ABSTRACT
This study examines auditors' responsibility in detecting fraud within financial statements,
focusing on the impact of their responsibilities. Using regression analysis with a 5% significance
level, each hypothesis was tested to assess the relationships between variables. The adjusted R-
squared values indicate the extent to which the dependent variable varies with the independent
variables. The data revealed that 78.5% of financial statements are influenced by auditors'
responsibility, with the remaining 21.5% attributed to other factors not covered in this study. The
second hypothesis showed that 62.3% of fraud detection is influenced by challenges and
constraints on auditors' ability, while the remaining 37.7% is due to variables not covered by the
research. The statistical analysis confirmed a positive and significant relationship between these
constraints and fraud detection, with a P-value of 0.00, lower than the 5% benchmark
significance level. This highlights that constraints such as time limitations, resource availability,
and the evolving complexity of fraud schemes significantly affect auditors' ability to detect fraud.
The third hypothesis revealed that 82.5% of fraud detection is influenced by current auditing
standards, while 17.5% is influenced by other factors. This relationship was found to be
significant, with a P-value of 0.002, which is lower than the 5% threshold. The study suggests
that strong auditing standards are crucial for improving fraud detection, and further investment
in training, experience, and resources is necessary to enhance auditors' effectiveness in
uncovering fraud.
Keywords: Auditors responsibility, Fraud Detection, Significance level, Regression analysis,
Effectiveness of auditor's, Financial statements, Audit Procedures, Financial Integrity.
Word Count: 232words
TABLE OF CONTENTS
TITLE PAGE i
CERTIFICATION ii
DEDICATION iii
ACKNOWLEDGEMENTS iv
ABSTRACT v
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study. 1
1.2 Statement of the Problem 4
1.3 Objective of the Study 5
1.4 Research Questions 5
1.5 Research Hypotheses 6
1.6 Scope of the Study 6
1.7 Justification of the Study 6
1.8 Significance of the Study 7
1.9 Definition of Terms 7
CHAPTER TWO
LITERATURE REVIEW
2.0 Preamble 9
2.1 Conceptual Review 9
2.1.1Auditor's Responsibility 9
2.1.2 Fraud Detection 15
2.2 Theoretical Review 17
2.3 Theoretical Framework 22
2.4 Empirical Review 23
2.5 Literature Gap 30
2.6 Researcher Conceptual Model 31
CHAPTER THREE
METHODOLOGY
3.0 Preamble 32
3.1 Research design 32
3.2 Population of the Study 32
3.3 Sampling Techniques 33
3.4 Sources of Data 33
3.5 Methods of Data Collection 34
3.6 Methods of Data Analysis 34
3.7 Validity and Reliability of Data 34
3.8 Designing of questionnaire 34
3.9 Model Specification 35
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND DISCUSSION OF FINDINGS
4.0 Preamble 36
4.1 Data Presentation 36
4.2 Test of hypotheses 50
4.3 Summary of findings 53
4.4. Discussion of findings 54
4.5 Implication of Findings 58
CHAPTER FIVE
SUMMARY, CONCLUSION RECOMMENDATIONS
5.0 Summary 60
5.1 Conclusion 60
5.2 Recommendation 61
5.3 Limitations 62
5.4 Contribution to knowledge 63
5.5 Suggestion for further studies 64
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APPENDIX
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