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The field of forensic accounting has become a hot topic of discussion among accounting practitioners and academics in recent decades. A forensic accountant is generally divided into two types based on their field, namely litigation support specialists and investigative or fraud accounting.
Litigation support includes business assessment, earnings analysis, and future earnings evaluation. An example is when there are parties involved in a legal dispute and need to use certain calculations to help resolve the dispute through a court decision.
The demand for Forensic Accounting Services in India is increasing as criminal laws and regulations are passed from time to time. With the number of criminal acts that continue to emerge, the need for forensic accountants is increasing. However, an accountant who wants to enter this profession requires several qualifications.
A forensic accountant requires several soft skills, such as communication skills, adaptive, and critical attitude. Apart from soft skills, a forensic accountant also requires some hard skills, such as knowledge of financial accounting, taxation, business operations, internal controls, and auditing. General knowledge of the world of accounting, especially auditing, will determine the ability of forensic accountants to identify criminal acts. Even though they appear to have the same job, an independent auditor and a forensic accountant have different characteristics.
An auditor is generally tasked with verifying and disclosing if there is a deviation from the company’s financial statements with applicable accounting principles, such as IFRS or GAAP. The independent auditor generally assumes that the client complies with the applicable accounting principles.
But this is not so in the case of forensic accountants as they critically assess the validity of a company’s financial transactions and their conformity with accounting principles along with investigating whether there is a fraud within the business or not.
Forensic Accounting Positions
If viewed from the perspective of the fraud triangle (pressure, perceived opportunity, and rationalization), accounting and forensic auditing have two roles in preventing fraud.
First, as a preventive measure because of concerns from the perpetrators that corruption that is carried out easily will be exposed. In addition, accounting and forensic auditors are also considered to be detectives because they are hired to collect and provide evidence for trial in court (litigation support), such as the direction of the flow of corruption, the perpetrators of corruption, the model used, and other more detailed results.
Until now, not many universities have taught in-depth knowledge and expertise related to accounting and forensic auditing. The application of forensic accounting education is seen as an important attribute to increase awareness of forensic accounting in the eyes of the public and students.
Although there are still many people who debate whether Forensic Accounting & Fraud Detection should be a new branch of science or should be integrated with general courses, practitioners ask academics to continue to teach the basics of accounting and forensic auditing to students.
Conclusion
Seeing its unique characteristics as one of the special fields in accounting, accounting, and forensic auditing has an important role in uncovering cases of fraud and corruption. Several countries are also intensively implementing accounting and forensic auditing to suppress increasingly rampant corruption cases. Businesses have great potential in implementing accounting and forensic auditing.