Payroll Fraud and Profit Performance: An Assessment of Small and Medium Enterprises (SME’s) in Nigeria

Wale Henry Agbaje, Olusola Esther Igbekoyi


The study examined the effects of payroll fraud on profitability of small and medium scale enterprises SMEs in Nigeria. The specific objectives focused on effect of payroll fraud on ghost workers, false wage claims and false expense claims. To accomplish these objectives a survey research design was adopted and data were collected using questionnaires that was structured on 5-point Likert summated rating scale. Multiple regression analysis was adopted to analyse the data. The findings of the analysis revealed that ghost workers, false expense claims and false wage claims are predominant factors affecting the profit performance of SMEs. It was found that increase in ghost workers has a negative effect on the profitability of SMEs although the effect is not so significant compared to false expense claims and false wage claims. The implication of this is that SMEs might not develop into develop the potentials of helping to reduce or eradicate unemployment if pragmatic decision is not taken as to this regards. The paper concluded that appropriate management of the variables of   payroll fraud should be encouraged in SMEs in Nigeria.

Keywords: Payroll; Fraud; Wage claims; Expense claims; Ghost workers.

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ISSN (Paper)2222-1697 ISSN (Online)2222-2847

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