In the present scenario, there has been
tremendous increase in the financial frauds, white collar
crimes, and professional negligence, etc., due to flourishing
businesses and diversified operations. Recent accounting
frauds and requirement of transparency, as well as governance,
gives rise to the need of Forensic Accounting in the corporate
sector. Internal and external auditors can only check the
arithmetical accuracy and the compliance with the Accounting
Standards and Auditing Standards and Policies in the preparation
of books of accounts. This new arena of accounting would
be helpful to detect suspicious business transactions,
frauds and other criminal offences.
The concept of Forensic Accounting has
emerged since long. Kautaliya was the Economist who had
discovered the methods of detecting frauds. Similarly,
Birbal reportedly analyzed some dubious deals to dig out
the truth. Forensic Accounting is basically the application
of accounting knowledge, principles, methods, interpersonal
skills and analytical skills to look beyond the numbers,
to detect the various offences and frauds in the books
of accounts.
Forensic Accounting can work as an important constituent of management control and information system. This article attempts to find the various areas of Forensic Accounting and explains how Forensic Accounting can be applied in the corporate sector as an innovative tool to get success and avoid frauds and crimes. In the present scenario, there has been tremendous increase in the financial frauds, white collar crimes, and professional negligence, etc., due to flourishing businesses and diversified operations. Recent accounting frauds and requirement of transparency, as well as governance, gives rise to the need of Forensic Accounting in the corporate sector. Internal and external auditors can only check the arithmetical accuracy and the compliance with the Accounting Standards and Auditing Standards and Policies in the preparation of books of accounts. |
