The financial downfall of many a high profile companies which enjoyed a preeminent position leave the stake holders stunned and heart-broken. Even as the investigations are into the murky happenings of Satyam Computers, the investigators and regulators are curious about what precisely went wrong of a company which was the picture of financial health even a month before could suddenly plunge into one the worst financial crisis. With widespread financial scams reported the needle of suspicion is directed to the role played by the accountants and the auditors of the company. Here lies the importance of forensic accounting. This branch of accounting draws on the accounting and financial knowledge to solve civil and criminal cases. Given to the complex nature of financial and accounting issues, the importance of members of this profession who, with their expertise , are capable of detecting frauds well in advance to act as whistle-blowers.


Forensic accounting is nothing but an admixture of accounting, finance, Law, IT, ethics. Its focus is on prevention and detection of financial frauds and identify the process of commission of such acts, the people behind them . And to bring these elements to justice by initiating appropriate judicial proceedings. The role of the forensic accountants differ from the one played by the traditional accountants who tend to lay greater emphasis on the arithmetical accuracy of accounts without deeply going into the history of transactions. They are supposed to pay attention to uncover frauds by linking the data knowledge, internal transactions and prevention of frauds by establishing and placing the accounting system on the right track .


A forensic accountant is on the prowl like a bloodhound all the time looking for the financial situations which could be the fertile ground for giving birth to frauds or catching the culprits red-handed. The areas their services could be effectively employed may relate to transaction reconstruction, bankruptcy, falsification and manipulation of accounts or inventories, accountability within the statutory audit etc. The role of forensic accountants in the investigations into financial frauds and white-collars crimes like embezzlement is extremely critical, who are to apply the tools and techniques mastered to be successful in their mission. Apart from this they are supposed to provide litigation support to lawyers and law-enforcement agencies to establish the guilt in the courts. The evidence they collect and compile must meet the rigorous scrutiny of the courts.


They must have the ability to analyze, interpret and assimilate complex financial data which are relevant to particular cases and synthesize them in an organized manner to meet the ultimate goal. Thus the services of forensic accountants can be effective utilized in the spheres of investigative accounting, review of the factual situation and provision for making suggestions in the form of corrective steps, holding consultations with external forensic experts etc.


The relevance of forensic accounting and forensic accounts has grown enormously in recent years and in the context of our country where fraudulent practices are very common both in the public sector and private sector companies. In the interest of such organization and numerous investors who have direct stakes in the financial well-being of the organizations, more and more forensic accountants should be involved to ward off financial disasters.

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