Abstract
Forensic accounting is the practice of utilizing accounting, auditing, and investigative skills to assist in legal matters. It encompasses two main areas – litigation support and investigation. It is a new area where various stakeholders, like banks, insurance companies and even public have increased taking the help of forensic accountants. In the emerging economic scenario, forensic accounting is an essential tool for uncovering or inquiry of financial crime and the direction of justice, providing decisive information about the facts found related to financial crime. Since the scope of Forensic Accounting has been growing steadily, it is also important to make sure that a company‘s finances are being kept safe. The increase in white collar crime and the difficulties faced by law enforcement agencies in uncovering fraud have also contributed to the growing need of forensic accounting. While many companies have always had in-house accountants to monitor and minimize any irregularities or complications that arise over the course of regular business, there are still instances of fraudulent activity. While the numbers may be balancing out in the end, businesses are still finding cleverly masked fraudulent activity when they go through the books.The paper focuses on the concept of forensic accounting and its importance and challenges. It also enumerates the differences between traditional auditing and forensic accounting. i.e., how the forensic accounting is proved to be an effective tool in detecting and preventing the white collar crime.
Keywords: Forensic Accounting, Auditing, detection and investigation of Fraud and effective tool.
Suggestions
The organisations should follow forensic accounting in preventing white collar crime. So they should adopt forensic accounting.There is huge requirement for honesty, fairness and transparency in Indian Corporate reporting. Therefore, The Institute of Chartered Accountants of India (ICAI) started a course on forensic accounting for only its members. It is ―Certificate Course on Forensic accounting and Fraud Detection using IT and CAATs‖. At present, very few academic institutions are offering courses (full time or part time) on forensic accounting. Indian universities are lagging behind in this area as compared to other foreign universities. Some leading organization such as India forensic (Pune, Maharastra) started certificate Course in Bank Forensic Accounting (CBFA), Certified Forensic Accounting Professional (CFAP). Institute of Chartered Financial Analyst of India (ICFAI) University also started Postgraduate Diploma in Forensic Accounting.