Forensic accounting involves using accounting, auditing, and investigative skills to detect fraud. It combines these disciplines to investigate financial evidence, develop applications to analyze financial evidence, and communicate findings through reports and testimony. Forensic accountants look for indicators of fraud such as large unexpected losses, non-compliance with policies, employees living beyond their means, unexplained inventory shortages, and missing or altered documentation.

1. FORENSIC ACCOUNTING
• Forensic Accounting is the combination of
accounting, auditing and investigating skills in
detecting a fraud
• It is a great weapon against accounting frauds
and malpractices in corporate world
• Forensic Accounting developed as early as
1995 in USA but after Harshad Mehta, Satyam
and Kingfisher Airlines case the same has
gained proposition in Indian context also.

2. 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 collection of documents
• Assist in legal proceedings including testifying
in courts, as an expert witness and preparing
visual aids to support trial evidence

3. INDICATORS OF FRAUD
• Large unexpected losses
• Non compliance with corporate policy or
internal controls
• Employees apparently living beyond their
means
• Inventory shortages remain unexplained and
poorly investigated
• Missing and altered documentation