Effect of Forensic Accounting Bank Statement Analysis on Tax Fraud Detection in States' Internal Revenue Services of North Central Nigeria

Tax fraud detection poses a persistent challenge for State Internal Revenue Services in North Central Nigeria. This study explored the impact of forensic accounting bank statement analysis on the detection of tax fraud, treating forensic bank statement analysis as the key independent variable. Using a survey design, data were gathered from all 411 respondents through a census sampling method and analyzed with simple regression techniques. Results indicate that forensic bank statement analysis significantly and positively influences tax fraud detection. Although tax fraud detection exists at a baseline level without forensic analysis, the findings reveal that enhanced use of forensic bank statement analysis substantially improves the IRS’s capacity to identify fraudulent activities. The model explains 24.3% of the variation in tax fraud detection, highlighting the crucial role of forensic analysis in these efforts. Consequently, it is recommended that the IRS in North Central Nigeria invest in advanced forensic tools, specialized staff training, and dedicated forensic accounting units to boost tax fraud detection and ensure greater compliance.