Forensic Accounting Techniques, Regulatory Compliance, and White-Collar Crime Prevention in South-South Nigerian Microfinance Banks: A Multicollinearity-Corrected Account

This paper examines how five forensic accounting techniques, forensic audit, fraud examination, digital forensics, litigation support and forensic data analytics, relate to white-collar crime prevention among microfinance banks in Nigeria's South-South zone, and whether that relationship varies by state, respondent design and compliance with the Central Bank of Nigeria's 2022 revised Microfinance Policy Framework. Data came from a cross-sectional survey of 81 usable microfinance banks, 324 respondents, combined with a constructed regulatory-standing proxy since genuine CBN and EFCC records could not be obtained. Multiple regression tested the five techniques jointly. Once they proved severely inter-correlated, with variance inflation factors up to 6.53, ridge regression with bootstrap inference and a Forensic Capability Index isolated their individual contributions. Because the regulatory component of the outcome is itself partly built from the predictor variables, a proxy-free replication on the underlying respondent-level data, 305 usable cases, checked whether the institutional pattern was an artefact of that circularity; this replication is treated throughout as the primary evidentiary basis for the paper's technique-level conclusions. Together the five techniques explained substantial variance in the outcome, R-squared equal to .844, p less than .001. Ordinary least squares identified only two techniques as significant, an artefact of multicollinearity rather than evidence the others contribute nothing. Ridge regression and the capability index showed all five contributing, forensic data analytics strongest. No state-level variation emerged. Full compliance with the 2022 framework was associated with the largest association found anywhere in the study, a difference of 0.88 standard deviations, a pattern corroborated, though not confirmed, in a proxy-free replication. Boards should treat forensic accounting as one integrated capability rather than five separate decisions, and regulators have reasonable grounds to prioritise accelerating full compliance with the 2022 framework, pending longitudinal confirmation. Few studies test all five forensic accounting techniques jointly, with a multi-informant design, across an entire geopolitical zone, or examine the 2022 framework's association with crime prevention, and this paper also shows, through the proxy-free replication, how severe multicollinearity among related techniques can mask genuine effects.

Forensic Accounting, White-Collar Crime Prevention

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