Effect of Fraudulent Practices on Market Capitalization of the Nigeria Capital Market.
- Author Onyekachi Chibueze Onuoha
- Co-Author Nonso John Okoye, Frank Chika Udemadu
- DOI 10.17605/O
- Country : Nigeria
- Subject : Cooperative Economics and Management
Keywords : Fraud, Market, Capitalization, Capital, Practices
Abstract
The study examined fraudulent practices on Market Capitalization of the Nigerian Capital Market. Specifically, this study determined the effect of both fraud and corruption on market capitalization. This study is anchored on social learning theory. The theory is based on the assumption that a similar learning process can produce both deviance and conformity. Four variables are thought to influence social behavior: definitions, differential association, modelling, and reinforcement. The interaction of these variables predisposes one to either conforming or deviant behaviour. Secondary data were generated from the Nigerian Stock exchange. This study used descriptive statistics in the analysis. The findings show that fraud and corruption had a significant effect on the market capitalization of Nigeria’s capital market. The work recommended that capital regulators should speedily adopt and enact policies that proactively address corporate fraudulent practices for their negative impact on the stock market development. The industry regulators should see urgency for several corporate governance reforms, such as gender equity and minority representation as strategies to curb managerial fraud practices. Regulators should also pay attention to internal corporate practices such as the appointment and selection of internal auditors and design of internal control systems. The apex regulators, such as Securities and Exchange Commission and anti-graft agencies in the country should embed recent fraud detection methodologies such as the use of forensic accountants or auditors to further strengthen the oversight role and aid the detection of fraud among companies.
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