Just
as forensic science has been helping catch the criminals
for long, forensic accounting is fast emerging in the
arena of corporate accounting frauds to play a similar
role.
Forensic
accounting is the most recent discipline in the accounting
field. In
fact, in developing countries like India, very few people
have heard about it. The dictionary meaning of word
`forensic' is "relating to, used in, or appropriate
for courts of law or for public discussion or argumentation".
Accounting activity essentially involves recording,
summarizing and presenting financial transactions of
an entity to the various users of the accounts, such
as management, shareholders, creditors etc.
Although
the role of forensic medical experts in dealing with
legal matters is well-known,
public in general and even many chartered accountants
are unaware of the role of accountants in matters involving
legal processes. For example, the role of a forensic
accountant in a criminal case is similar to that of
a forensic medical professional. In a murder trial,
a forensic medical professional gives evidence on matters
such as cause of death, time of death etc. This can
be used as evidence for either strengthening the prosecution
case or the case of the defense. For instance, in a
murder case, grievous injuring inflicted on the deceased
become very important clues to the case. A forensic
medical evidence can prove that the murder occurred
either due to a particular action of the accused or
that the man died before the attack took place or in
case the death occurred after the attack, whether or
not the man died of causes other than the injury inflicted
by the accused. Therefore, the forensic medical evidence
is an important factor in a criminal prosecution. In
a similar fashion, the role of a forensic accountant
in a criminal case can be equally important. In most
crimes, monetary benefits are the motive behind the
crime or money has been used or paid for perpetrating
the crime (for example, contract killing).
Often, police
acquire the personal diaries of the accused which contain
the details of the monetary transactions carried out
by the accused before and after crime. These details
throw light on the motive behind the crime and can be
used as vital evidence in the court. A regular accountant
is generally trained to deal with normal business transactions
and cannot develop a pattern out of the information
contained in such diaries. On the other hand, an investigative
officer, although he is very well trained in criminology
and criminal behavior, is completely ignorant of financial
accounting, especially if it is in coded form. A forensic
accountant is one who is not only well trained in the
accountancy but also in the criminology and investigation.
Therefore, they are often called to assist in the investigation
and judicial process by applying their financial wisdom
and investigative skills mentality to resolve issues
within the context of the rules of evidence. A forensic
accountant offers a wide range of services including
detection, investigation of frauds and deciphering the
financial angle in various criminal and civil cases.
As
the discipline is new and still evolving, forensic accounting
has no formal definition. Essentially, it involves integrating
accounting, auditing and investigative skills to provide
an accounting analysis suitable to the court, which
will form the basis for discussion, debate and, ultimately,
dispute resolution. It is already established as a specialized
profession in developed countries such as USA, Canada
etc. Forensic accountants can be engaged in public practice
or employed by insurance companies, banks, police forces,
government agencies and other organizations. Today,
the profession of forensic accounting is fast emerging
as a profession with good future in the backdrop of
global war on terrorism, drug-trafficking and money
laundering. |
