Beneish Model as Effective Complement to the Application of SAS No. 99 in the Conduct of Audit in Nigeria

This paper gives due consideration to determining the contribution made by SAS 99 towards improving the skills of Nigerian Auditors in the detection of fraud in Financial Statements of corporate organisations, while laying emphasis on the extent to which the Beneish Model could further strengthen Auditors likelihood to detecting such manipulations in the Financial Statements. The research was descriptively and historically designed. 100 respondents comprising Auditors, Accountants in the Industries and the Accounting Academics in Anambra and Enugu State were infinitely determined using the Topman’s formula. Data from secondary sources comprising Audited Annual Reports of the first five most capitalised manufacturing companies in Nigeria for the years 2002-2006 (in Cadbury, for model confirmatory test purpose) and 2006-2010 were used to complement this work. Inputs from the questionnaire distributed and the Annual Reports and Accounts, were analysed with the aid of SPSS software package using the Two way ANOVA statistical technique, and the Beneish Model. The analyses result showed that SAS 99 will significantly contributed to the deterrence and detection of fraud by Auditors in Nigeria, especially where complemented with the Beneish model. Thus, the Model should be introduced into the Nigeria Audit System as one of the prescribed analytical Audit techniques to aid External Auditors perform the relevant substantive tests where necessary so as to effectively curtail the rising incidence of fraud among corporate organisations in Nigeria.