FORENSIC ACCOUNTING IN

FRAUD AUDITING CASE

PRESENTED BY:NIKAM TEJASWINI NITIN
What Is Forensic Accounting?

 The integration of accounting, auditing and investigative skills yields the speciality known as
Forensic Accounting.
 Forensic accounting is the 'speciality' practice area of accounting that describe engagements,
which result from actual or anticipated disputes or litigation.

 In other words:
 The identification, interpretation, and communication of the evidence of economic transaction and
reporting events.
 Forensic accounting is the specialty practice area of accountancy that describes engagements that
result from actual or anticipated disputes or litigation. "Forensic" means "suitable for use in a court
of law"
 Branches of Forensic Accounting

1. Investigative Accounting-
Definition: Investigative accounting involves the analysis and examination of financial records to uncover
fraudulent activities, financial discrepancies, or other irregularities.
Investigating and analysing financial evidence.
Review of the factual situation and provision of suggestions regarding possible courses of action.Assistance with
the protection and recovery of assets.
Co-ordination of other experts, including:
■ Private investigators;
■ Forensic document examiners;
■ Consulting engineers.
Assistance with the recovery of assets by way of civil action or criminal prosecution.
2. Litigation Support-
it involves providing accounting assistance in litigation matters.It primarily deals with
quantification of economic damage.

Assistance in obtaining documentation necessary to support or refute a claim.

Review of the relevant documentation to form an initial assessment of the case and identify
areas of loss.
Assistance with Examination for Discovery including the formulation of questions to be asked
regarding the financial evidence.
Attendance at the Examination for Discovery to review the testimony, assist with understanding
the financial issues and to formulate additional questions to be asked.
Review of the opposing expert's damages report and reporting on both the strengths and
weaknesses of the positions taken.
Assistance with settlement discussions and negotiations.
Attendance at trial to hear the testimony of the opposing expert and to provide assistance with
cross-examination.
 ACTIVITIES CARRIED BY FORENSIC
ACCOUNTANT

•Investigating and analysing financial Evidence.

•Developing computerised applications to assist in the analysis and presentation of financial

evidence.

•Communicating their findings in the form of reports, exhibits and collections of documents.

• Assisting in legal proceedings, including testifying in courts, as an expert witness and preparing
visual aids to support trial evidence.
 Steps In Forensic Accounting
• Meeting with the client

• Performing a Conflict checkdance.

• Carrying out Preliminary investigation.

• Developing detailed action plan.

• Obtaining Relevant Evidence.

• Perform Analysis.

• Prepare Reports.

• Chart and Graphics

 FUNCTIONS OF FORENSIC ACCOUNTANTS
• Criminal Investigation: Criminal investigation is a multifaceted process aimed at
uncovering facts, gathering evidence, and solving crimes. It involves systematic
procedures conducted by law enforcement agencies or specialized investigators to identify
perpetrators, establish motives, and bring offenders to justice

• Detection of Fraud: Criminal investigators play a vital role in detecting and

investigating fraud within various contexts, including corporate, financial, and
governmental sectors.They utilize forensic accounting techniques to trace irregularities in
financial records, such as embezzlement, money laundering, or financial statement fraud.

• Litigation support (legal support) cance: Criminal investigators often provide crucial
support to legal proceedings by gathering evidence, conducting interviews, and analyzing
complex situations.They assist legal teams in preparing cases for trial, offering expert
testimony, and presenting findings in a clear and compelling manner.

• Solve shareholders and partnership disputes: Criminal investigators may be called

upon to resolve conflicts arising between shareholders or partners within businesses or
organizations. They employ investigative techniques to uncover underlying issues, such as
breach of fiduciary duty, mismanagement, or fraudulent activities.
 FORENSIC SERVICES:

• Business valuations

• Divorce proceedings and matrimonial disputes

• Personal injury and fatal accident claims

• Professional negligence

• Insurance claims evaluations› Arbitration

• Partnership and corporation disputes

• Shareholder disputes (minority shareholders claiming (oppression)

 CONCLUSION

It is only through the practice of preventive rather than reactive auditing that forensic
auditing will become visibly effective and make auditing credible, once more.

Awareness of human element, organization's behavior, knowledge of the system, the

technology in use and expected to be used, knowledge of fraud, evidence are so called red
flags are key issues
 THANK YOU….!!