Forensic Accounting – a New Paradigm For Niche Consulting

AIMS OF WRITING THIS DOCUMENT: Forensic accounting(F. A. ) comes into limelight credited to rapid increase in financial frauds and white-collar crimes. However it is largely untrod unbeaten area in India. The integration of accounting, auditing and investigative skills creates the speciality know as F. A. The opportunities for the Forensic Accountancy firm are growing fast; they are being engaged in public practice and are working by insurance companies, banks, police forces, authorities agencies etc. This post looks for to examine the interpretation and nature, activities and services rendered, core knowledge and private skills required for forensic accounting as a specialized field in accountancy profession. Indeed there is a future in F. A. as a separate niche consulting. Irenas Bookkeeping

The lack of respect and belief in India’s law enforcement officials agencies and the rate from which white-collar crimes have increased has prompted the development of Forensic Accounting in India. The scams detecting agencies generally seems to shortage time and devotion necessary for detecting and prevention of errors and fraud. Relating to a sizable global accounting firm, the market is sufficiently big enough to maintain an unit focused totally towards “forensic accounting”. Many large as well as small accounting organizations as well as the tiny organizations have inculcated or rather developed individual forensic accounting departments. 

We all were of the idea that detection and elimination of frauds or white-collar crimes is part of conventional accounting function. Was thought that the scammers, both internal as well as external has be to detected by the auditors through their intermittent audit. Now it is crystal clear that auditors can only check for the compliance of a company’s books to generally accepted accounting principles, auditing standards and company guidelines. Hence the need was felt to discover the frauds in companies that are suspected to be engaged in fraudulent ventures. This field of accounting is called “forensic accounting”.

The litmus test of analysis, first introduced by the ever great Sherlock-Homes(considered by many as the daddy of Forensic Accounting) is perhaps the first ever before using forensic accounting. Although, the contribution of the other few great historians to the field of forensic accounting may not be avoided. They used various methods to investigate various criminal activity.

F. A. is a specialized an area of accounting practice that details engagements which result from actual or anticipated conflicts or litigation. The term “forensic” means “suitable for use in court”. The forensic accountants have to keep in mind this statement while they have to work or chalk out their programme. The F. A. work is tailor made in line with the situation and need. The acquiring of information and evidences is done in line with the need and situation. We can say, it is custom-made in line with the situation. The forensic-accountants give expert evidence at the ultimate trial. Almost all the modern medium-sized as well as the big accounting organizations have focused forensic accounting departments. Inside these businesses there may be specialized forensic accounting departments. Within these teams their may be further sub-specializations. Various sub-specializations include insurance claims, personal damage claims, fraud detection, building or royalty audits. Practically 40 percent of the top 100 US accounting organizations are expanding their forensic and fraud services, matching to Accounting Today. Today if we consider this data as significant then we know that the total contribution of forensic accounting to the overall earnings of the C. A. businesses would be highly significant in the many years movement to come. Under rising instances of frauds and litigation and flourishing businesses these services are considered to be very significant as they are rendered at a very competitive price.