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Forensic Auditing and Financial Strength Transparency in Selected Southwest Government Sector of Nigeria

Okpanachi Anone Baba. CNA, CCFA, CCFI

Abstract

Financial transparency, characterized by the openness, clarity, and accessibility of public financial information, remains a significant governance challenge in Southwest Nigeria. This study empirically investigates the impact of forensic auditing conceptualized through its core components of Investigative Audit Techniques , Evidence Analysis Procedures , and Litigation Support Functions on these dimensions of transparency. Employing a quantitative research design, data was collected from 157 financial and audit professionals across state ministries in Southwest Nigeria and analyzed using multiple linear regression. The results demonstrate a differentiated impact: Openness of Financial Information was significantly enhanced by IAT (?=0.298, p<0.01) and EAP (?=0.412, p<0.01). Clarity of Financial Disclosure was most strongly driven by EAP (?=0.461, p<0.01), with a secondary effect from LSF (?=0.132, p<0.05). Notably, Accessibility of Financial Reporting was positively influenced by all three components: IAT (?=0.194, p<0.01), EAP (?=0.187, p<0.05), and LSF (?=0.253, p<0.01). The regression models were statistically significant (p<0.01) with substantial explanatory power (Adjusted R2: 56.2% for OFI, 57.8% for CFD, 43.2% for AFR). The study concludes that forensic auditing is a potent but under-optimized tool for promoting transparency in the region. A critical "enforcement gap" exists, where investigative and analytical functions are more developed than the legal follow-through. We recommend the formal establishment of forensic audit units and stronger legal-institutional frameworks to ensure audit findings translate into concrete accountability and improved public financial management.

References

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