An Examination of the Relationship between Corporate Culture and Financial Statement Fraud in Nigeria

This research paper investigated the relationship between corporate culture and financial statement fraud among listed companies in Nigeria. Data for the research was collected from primary sources through the issue of structured questionnaires to the top and mid-level accounting staff of fourteen companies listed on the Nigerian stock market and analyzed using descriptive statistics and the OLS method of the multiple regression analysis. The findings showed that there is a negative relationship between corporate culture and the perpetration of financial statement fraud in listed companies. Thus, strong corporate culture in terms of teamwork and communication will lead to a reduction in financial statement fraud. The findings also indicated that there is a negative relationship between corporate culture in terms of transparency and accountability and financial statement fraud. It is thus concluded that positive corporate culture reduces the tendencies to commit financial statement fraud among organization listed on the Nigeria stock market. Further, it is concluded that transparency and accountability in the workplace reduce the perpetration of financial statement fraud. However, in both cases, corporate culture is not a reliable determinant of financial statement fraud. Thus, financial statement fraud can still occur in organizations with positive workplace culture if procedures relating to compiling and publishing financial statements are violated. It is thus recommended that organizations should take actions and set examples that will continue to enthrone a positive workplace culture in their organizations. It is also recommended that companies imbibe the culture of strict compliance with laid down rules and procedures in compiling and publishing financial reports so as to ensure that individuals with fraudulent intents do not take undue advantage of lapses in the system to perpetrate fraud.