1. FORENSIC
ACCOUNTING
PROJECT PREPARED BY
VISHITA SHETTY
JAMES FERNANDES
JIGNESH BHATIA
VISHWANATH JADHAV
AVINASH MATHIAS MMM 21

2.  RAPID CHANGES IN THE ACCOUNTING
PROFESSION
> Operations of Day to day task of
debiting and crediting.
> Reports on internets (Technology)
> Demand of Global Economy and
International market.

3.  Forensic accounting have been around for nearly 200 years
 Found in 1824
 First institutions to use the services IRS (International Financial
Statistics)
 GAAP ( General Accepted Accounting Principles) and tax laws
became widespread and mandatory.
 Companies that manipulated accounting rules to boost their
earnings in a stock market gone wild.
 The year 2002 the annals of accounting history as
 the Year of Truth
 when companies disclosed billions of dollars of financial
fraud.
 SEC issued earnings restatements between the years 1997 and
2002.
 The FASB (Financial Accounting Standard Board) and the
SEC(Security and Exchange Commission) scrambled to find
solutions to the problem of such ubiquitous financial fraud.

4.  Forensic accounting is hardly a new field in
accountancy.
 Forensic accountants as preventative measures
as the demand for trustworthy financial
statements increases in the wake of the recent
accounting scandals.
Forensic accounting", provides an accounting
analysis that is suitable to the court which will
form the basis for discussion, debate and
ultimately dispute resolution.
Forensic Accounting encompasses both Litigation
Support and Investigative Accounting

5.  Litigation Support  Investigation Support
 It deals primarily with  “Investigative
issues related to the accounting", is often
quantification of associated with
economic damages. A investigations of
typical litigation criminal matters. A
support assignment typical investigative
would be calculating accounting assignment
the economic loss would be an
resulting from a breach investigation of
of contract. employee theft. Other
examples include
securities fraud,
insurance fraud, and
proceeds of crime
investigations.”

6.  The expert witness –  Fraud Detection –
preparation of formal assisting clients in
reports for filing in detecting financial
Court and giving fraud by employees
evidence as an Expert and others and
tracing
misappropriated
•Computer Forensics – funds. This section
assisting in electronic provides
data recovery and information for
enforcement fraud-related
engagements
of IP rights etc.

7. 1.Preparation (of the
investigator, not the data)
2. Collection (the data)
3. Examination
4. Analysis
5. Reporting
6. Comparison to Physical
Forensics

8. Shareholder/partnership disputes
•Personal injury claims/accidents
•Business interruption/insurance claims
•Employee fraud
•Divorce/bankruptcy
•Professional negligence
•Financial statement fraud
•Retained by lawyers, law enforcement,
banks and companies

10. Direct Method Indirect Method
 The Direct Method, also  Indirect Method is
known as the commonly employed
Transaction Method, is when the conventional
similar to traditional Direct Method is not
auditing procedures. In productive. The most
this method, the
appraiser commonly widely used techniques
examines: under the Indirect
 Cancelled checks & Method are the:
invoices  Cash T Method
 Contracts & agreements  Source & Application
 Public records & notices of Funds Method
 Interview management &  Net Worth Method
staff (multi levels)
 Bank Deposit Method

11. Forensic Accountants are often retained by
the following groups:
•Lawyers;
•Police Forces;
•Insurance Companies;
•Government Regulatory Bodies and Agencies;
•Banks;
•Courts; and
•Business Community.

12. “Auditor should be watchdog ”.
It’s a good quote that every
auditor should know. This quote
makes the definition of Forensic
accountants even more simple.”

13. Growing cyber crimes, failure of
regulators to track the security
scams,
Satyam scandal

14. Conclusion:……………………….
The importance of the forensic
accountant’s role in the detection of
fraud is continuously growing. Armed with
combination of skills, these financial
detectives are today important assets
to modern legal teams. In the backdrop
of increasing levels of frauds, the
demand for forensic accountants is bound
to substantially increase in the future.

17. End End of
Satyam Empire
of Satyam Empire
?