In the last few decades, payroll fraud model has been drawing a great deal of attention amongst researchers, professional accounting bodies and practitioners, as it is becoming increasingly frequent, complex, more difficult to prevent and control it effectively. The aim of this study is to empirically help re-energize movement towards accounting system and payroll fraud model of local governments in Nigeria. Survey data were obtained from 774 respondents using researcher designed questionnaire validated by experts and shown to have reliability coefficient of 0.92%. Pearson product moment coefficient of correlation and regression statistical techniques were used in analyzing the data. The empirical result indicates that accounting system significantly relate to payroll fraud, explaining about 73.8% and 84.5% of the variation in ghost employee fraud. Traditional accounting system, investigative accounting and computerized accounting system were found to significantly relate to payroll fraud model, sustaining short run equilibrium relationship with ghost employee fraud model. We conclude that accounting system has the potency to make significant contribution to payroll fraud model and recommends that government should ensure that the government should ensure that forensic accounting department is instituted in the ministries to enhance effective management of fraudulent activities. Accountants employed in the ministries should have a broad knowledge of law while lawyers also should have a broad knowledge of accounting to be able to effectively carry out the task of a forensic accountant. Back duty investigation should be carried out regularly to stem the tide of false wage claims
