This study empirically investigates the impact of tax audit and investigation in the detection and prevention of tax fraud in Nigeria. A structured questionnaire was adopted as instrument for data collection to elicit useful information from respondents. The cross-sectional survey research design was employed and stratified simple random sampling was adopted in selecting a sample size of 166 which consists of staff members of the Federal Inland Revenue Service, State Internal Revenue Service, Revenue Committees of the Local Government, tax consultants and the taxpaying public within Port Harcourt, Rivers State Nigeria. Pearson product moment correlation was used as a statistical tool for data analysis. Findings reveal that effective tax audit and investigations are reliable administrative tools that could be employed by the relevant tax authority to reduce and eradicate the rampant cases of tax fraud pervading every strata of the Nigerian society as it could help to boost tax revenue collection in the country. The study therefore recommends that tax audit and investigations unit should be constituted as a matter of priority by the relevant tax authority in all the tax offices. The unit should be decentralized and be empowered to perform its statutory roles of promoting voluntary but sincere tax compliance with the Nigerian tax legislation without any sort of compromise and red tapism.