ABSTRACT
This study examined the experience of small audit firms in the conduct of fraud auditing in Nigeria. Specifically, the study targeted a sample size of one hundred (100) small audit firms in Nigeria, however, a total of one hundred and twenty-eight (128) responses were retrieved which was considered adequate to conduct the study’s analysis. The study utilised descriptive statistics (simple percentage and frequency count) and inferential statistics (Chi-square test) to carry out its analysis. It was revealed that: small audit firms conduct fraud audits, with 53.9% doing so over 6 to 10 years; small audit firms engage in various types of fraud audits, including financial statement, asset misappropriation, employee expenses, insurance, investment, payroll, cyber, and vendor fraud audits; small audit firms have adequate resources in terms of finances, personnel, technology, information, legal, and regulatory aspects; challenges faced include limited resources, lack of expertise, time constraints, restricted access to information, risk management, and competition with larger firms; coping strategies involve investing in technology, collaborating with specialists, setting priorities, using good judgment, conducting risk assessments, and providing exceptional client service; and best practices include building skilled teams, establishing clear fraud policies, conducting risk assessments, maintaining independence, and implementing follow(up and monitoring measures. Based on these findings, it was recommended that: small audit firms should invest in continuous training and development programs for their auditors to keep them updated with the latest fraud detection techniques and technologies; small audit firms should allocate resources to upgrade and integrate advanced forensic accounting tools; establish partnerships with specialists or consult external experts when facing complex fraud cases to benefit from their specialized knowledge and experience; given the potential resource limitations, prioritize audit tasks and allocate resources judiciously, focusing on critical areas of fraud risk; develop and enforce comprehensive fraud policies and procedures within the firm to provide a structured framework for conducting fraud audits; and ensure auditors maintain independence and objectivity in their assessments, minimizing any potential conflicts of interest that could compromise the integrity of the audit process.
