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Developments in the field of accounting science are of course greatly influenced by market demand or community conditions.
Some modern accounting fields that are developing currently include financial accounting, management/business accounting, auditing, tax accounting, public sector accounting, and the latest development is Forensic Accounting & Fraud Detection. Forensic accounting consists of two words, namely accounting and forensics.
The word forensic comes from the Latin ‘forensis which means gathering facts to support an argument, providing evidence or facts in court.
In the article, it is stated that forensic accountants play a role in detecting tax fraud in financial statements.
By employing a forensic accountant in a business or company, of course it will be more effective in preventing the occurrence of such fraud.
Forensic Accounting & Fraud Detection is carried out by collecting accounting evidence from records, systems, networks, and reports. The forensic accountant will then try to gather other evidence from other sources such as criminal investigators, video monitoring systems and eyewitnesses, to reconstruct the fraud incident.
In the next step, the forensic accountant mounts the suspected computer forensic image or other relevant data from the investigation process to the cyber forensic machine.
However, the problem is whether hiring forensic accountants in a business or company is an efficient strategy in overcoming fraud when viewed from the side of the costs incurred by the business or company?
Thus, management or company owners need to consider several things before deciding whether to hire a forensic accountant or not.
Some of these considerations include the magnitude of the risk and the number of gaps in the risk of fraud in a company and the ability of management to control the potential for fraud in its business.
A company that has large assets with large profits and has branches spread across various operational areas, it seems that hiring a forensic accountant is the right thing because the costs incurred by the company to fund forensic accountants will be lower than the costs to overcome potential fraud in business organizations.
Likewise in a business organization that has a large amount of risk. For example, a banking company will of course face more and greater risks when compared to companies engaged in trading or retail.
Banking has eight business risks, namely credit risk, market risk, operational risk, liquidity risk, legal risk, strategic risk, compliance risk, and reputation risk.
For banking companies, Forensic Accounting Services in India can provide consultation in terms of building an effective and efficient internal control system, build a system for preventing the occurrence of potential fraud in the banking company, including in the technology aspect of the banking business information system, as well as being asked for assistance in terms of examination – periodic inspection of transactions at the bank.
Thus, companies or businesses engaged in banking would be better off if they employ forensic accountants in their business organizations, especially if the banking company does not yet have a good internal control system.