The corporate scandals in the US and Europe have led to the creation of new accounting laws and forensic accounting practices. It is the specialty practices in the area of accountancy, which describe the results from actual or anticipated disputes or litigation. In the present practices, forensic accounting is the fastest growing area of accounting. The world of forensic accounting involves the application of specialized knowledge and specific skills to the field of accounting, auditing, and investigation in order to collect evidence of a company's financial statements.

The large scale corporate scandals in the US and Europe has lead to the growth of Forensic Accounting in the global scenario. In the corporate world, Enron committed a major offense, which robbed many people of their investments. In this context, Ex-President, George W Bush, wanted to make certain rules to better monitor and prevent business failures in the future. So, new accounting laws were put into place and forensic accounting potions opened to better regulate the laws and the financial practices of the corporate world.

The Sarbanes-Oxley Act of 2002 (also known as Public Company Accounting Reform and Investor Protection Act) has 11 titles to explain the mandates and requirements that companies are now required to adhere to, when it comes to financial reporting. The titles generally include: Public Company Accounting Oversight Board, Auditor Independence, Corporate Responsibility, Enhanced Financial Disclosures, Analyst Conflicts of Interest, Commission Resources and Authority, Studies and Reports, Corporate and Criminal Fraud Accountability, White Collar Crime Penalty Enhancement, Corporate Tax Returns, and Corporate Fraud Accountability. The term `forensic' usually means "suitable for use in a court of law". So far, an improved definition of Forensic Accounting is, a specialized mode of accounting analysis that is suitable to the court, and which will form the basis of discussion, debate and, ultimately, for dispute resolution, whether before the courts or in other decision-making tribunals. As per the Webster's Dictionary, the term `forensic' means "Belonging to, used in or suitable to courts of judicature or to public discussion and debate."

It is also sometimes called `Investigative Accounting' and involves the application of accounting concepts and techniques to legal problems. In the corporate world, forensic accounting is a specialty practice in the area of accountancy, which describes the results from actual or anticipated disputes or litigation. Forensic accountants are also referred to as forensic auditors or investigative auditors, who give expert evidence at the eventual trial.

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