Forensic Accounting and Financial Statements Fraud in Nigeria

This study examined the effect of capital structure on the financial performance of deposit money banks in Nigeria (a study of Wema Bank Plc). The study adopted ex-post facto research design. The data to be used is secondary data, which was derived from the audited financial statements of WEMA bank Plc for ten years, spanning from 2013 to 2022. Data collected was analyzed using descriptive and inferential statistics. This study used descriptive statistics of mean, standard deviation, minimum and maximum values to describe the variables used in the study. This was followed by Pearson correlation and Ordinary Least Square regression analysis method. The results revealed that total debt to total asset (TDTA) and long term debt to total asset (LDTA) have negative effect on return on assets with their respective coefficient values of -0.0002138 and -0.0244311. However, the negative effect was only significant for TDTA with the probability value of 0.036 as against the insignificant effect of LDTA with probability value of 0.235. Also, total debt to total equity (TDTE) has a positive insignificant effect on financial performance of deposit money banks with the coefficient and probability values of 0.0235538 and 0.266 respectively. Based on the findings made, it can be established that there is a statistical significant effect of capital structure on firms’ performance in Deposit Money Banks (DMBs) in Nigeria. Based on the findings, it was recommended that logically, firms should use more of equity than debt in financing their business activities because in as much as the value of a business can be enhanced using debt capital, it might get to a point that it becomes detrimental to the value of the business. Hence, firms should establish the point at which the weighted average cost of capital is minimal and maintain that gearing ratio so that the company’s value will not be eroded, as the firm’s capital structure is optimal at this point ceteris paribus. This is because the highly geared firms are more prone to lower firm performance as a result of an additional leverage incurred. Keywords: Forensic Accounting, Financial Statements, Fraud, Nigeria