2. INTRODUCTION
• Forensic accounting is the area which is called upon to address the issues of
prevention and investigation of white collar crimes.
• Forensic accounting also known as forensic auditing is a vital tool for finding of
financial crime and the direction of justice, providing decisive information about
the facts found related to financial crime.
• The increase in white collar crime and the hitches faced by law enforcement
agencies in finding fraud have also contributed to the growth of the profession.
• Opportunities for forensic accountants are increasing rapidly in recent years due
to a rise in white collar crime.
3. HISTORY OF FORENSIC ACCOUNTING
• Birbal was used various tricks to investigate various crimes in the time of King
Akbar.
• Chetan Dalal who is the Gem of Indian Fraud Examiners, can be credited with
actually applying the stories of the Birbal to the Investigation of the frauds.
• Forensic accounting known as triangle of the integration of accounting, auditing
and investigative speciality.
• In Times, Kautilya was the first person to indication the well-known 40 ways of
fraudulent in his famous Kautilya arthasastra during the ancient In India.
6. DEFINITION AND MEANING OF FORENSIC
ACCOUNTING
• According to AICPA “ the use of professional accounting skills in matters involving
potential or actual civil or criminal litigation, including, but not limited to,
Generally Acceptable Accounting Principles the determination of lost profit
income, assets, or damages; evaluation of internal controls; fraud; and any other
matter involving accounting expertise in the legal system”.
• Other definition “the use of accounting skills to investigate fraud or
embezzlement and to analysis financial information for use in legal proceedings”.
8. OBJECTIVE OF FORENSIC ACCOUNTING
• A forensic accountant can help improve and make sure the
integrity of the financial reporting system.
• Forensic accounting helps in detecting financial frauds and
muggings.
To use the forensic accountant’s ends to facilitate a settlement,
claim, or jury award by reducing the financial component is an
area of continuing debate.
9. SCOPE OF FORENSIC ACCOUNTING
• Due to An increase in white collar crimes and frauds, scandals in public as well as
private sectors, there is a wide scope for forensic accounting in India.
) Forensic accounting designs and performs statutory audit procedures for risk
reduction of the business.
) Design accounting processes for verifying important premises and data. A forensic
accounting orientation also calls for skills in identifying possible fraud.
)Forensic accountant or auditor acts as an advisor to the audit committee.
10. MERITS AND DEMERITS OF FORENSIC
ACCOUNTING
• Merits-
• Fraud Identification and Preclusion.
• Structure of Economic Policies .
• Creation of Sound Investment Decisions.
• Gratifying Career Opportunity.
13. FORENSIC ACCOUNTING IN INDIA
• Forensic accounting gained popularity in India following the Enron, Rajat Gupta,
and Satyam cases. Few chartered accounting firms specialize in fraud
investigation as a practice area. The big four consulting firms Deloitte, KPMG,
PricewaterhouseCoopers, and Ernst & Young control a large portion of this
industry.
• Many accountants in India lack the expertise and knowledge required to conduct
forensic accounting or fraud detection effectively.
14. CONCLUSION
• Forensic accounting is preferred by regulators and courts to look into complex
fraudulent activities. It is an independent examination of alleged wrongdoing in
the company’s accounting system.
