ANALYSING THE EFFECTIVENESS OF AUDITORS’ EXPERTISE IN REDUCING FINANCIAL STATEMENT FRAUD IN PUBLIC NIGERIAN BUSINESS ENTERPRISES

Abstract

This study investigates the effectiveness of auditors' expertise, skills, and tools in reducing financial statement fraud within Nigerian public business enterprises. The study is anchored on the Expertise Theory, which posits that auditor competence is developed through deliberate practice and domain-specific knowledge, and is complemented by fraud theories (the Fraud Triangle, Diamond, and Pentagon). A descriptive survey research design was employed, with data collected via questionnaires from 576 accounting, finance, and audit staff in selected federal government-owned enterprises in Lagos State, Nigeria. The data were analyzed using both descriptive and inferential statistics (regression analysis). The findings reveal that auditors' expertise significantly predicts financial statement fraud reduction (β = -0.309, p < 0.05), explaining 96.1% of the variation in fraud reduction. Similarly, auditors' skills and tools, including proficiency in information technology, forensic accounting techniques, specialized audit software (e.g., ACL, IDEA), and risk assessment have a significant positive effect (β = 0.293, p < 0.05). However, while expertise is crucial, respondents indicated that it is insufficient on its own and must be supported by ethical conduct, a strong organizational culture, and robust regulatory enforcement. The study concludes that a combination of deep auditor expertise and the strategic application of advanced skills and modern tools is vital for combating financial statement fraud. It recommends continuous professional development, technological integration in audit processes, and the pursuit of higher qualifications to strengthen fraud reduction efforts, thereby enhancing transparency and accountability in Nigeria's public sector.