International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

Accounting Ratios and False Financial Statements Detection: Evidence from Nigerian Quoted Companies
Alade Sule Omoye PhD, Emmanuel Eragbhe PhD

The paper investigated accounting ratios and false financial statements detection among firms quoted in the Nigerian Stock Exchange. Accounting data were obtained from the reported financial statements of 30 sampled firms in financial and non financial sectors covering a time frame of five (5) years (2007-2011).The statistical instrument employed was Pooled Data Binary Logit regression. Data collected were run with E-Views 7 and SPSS 20. The findings revealed that investment and liquidity ratios were significantly related to financial statements fraud. It was recommended that accounting ratios should be critically examined by investors and stakeholders so as to detect probabilities of financial statements fraud occurrences, and also Government regulatory authorities like the Nigerian Stock Exchange, Security and Exchange Commission, Central Bank of Nigeria, Financial Reporting Council of Nigeria and others should ensure that financial statements of firms are properly screened and endorsed by them before being released to the public.

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