FORENSIC BACKGROUND INVESTIGATION TECHNIQUE AND INSIDER FRAUD THREATS: EVIDENCE FROM THE LOW-LEVEL SUPPLY CHAIN FIRMS IN NIGERIA

Damilola Gabriel FAGBORO; Omowunmi Jumoke OGUNLEYE; Adegbola Olubukola OTEKUNRIN

Damilola Gabriel FAGBORO Department of Accounting, University of Lagos
Omowunmi Jumoke OGUNLEYE Department of Accounting, University of Lagos
Adegbola Olubukola OTEKUNRIN Bowen University, Iwo, Osun State, Nigeria

Keywords: Forensic investigation, intelligence gathering, employees’ fraud threats, and supply chain firms

Abstract

The paper explores the nexus between forensic background investigation techniques on employees and insider fraud threats in Nigeria's low-level supply chain firms. The research design adopted for the study is a survey. Primary data are gathered from the 109 volunteered sole-business owners used for the analysis; descriptive and inferential statistical tools are deployed to analyse the data.

Findings reveal that sole-business owners rarely conduct background investigations on their employees during recruitment. The background intelligence gathering among the firms' employees is significantly low. Slack employment policies, misplaced trust, and uncoordinated internal control systems among the firms mostly create avenues for employees to commit fraud. The study concludes that both tactical and strategic approaches to intelligence gathering on employees are suitable methods to build up a detailed signal of threats to a business. Initial assessments and background forensic investigation processes on employees help make timely decisions about how to respond to insider fraud threats and identify what protective measures to take. The study recommends that sole business owners protect their investments by employing trustworthy persons, ensuring the safety of the assets, and upholding the reputation of the firm’s image. Preemployment and on-the-job forensic background investigation techniques and tactical intelligence evaluation on the employees should be part of the standard anti-fraud strategies of a small-size business firm. Credibility in the information gathered, and intelligence products generated by each employee must be a hallmark of the employing firm.