Forensic accounting involves investigating financial crimes and disputes. It includes two main areas: investigative accounting which deals with crimes like theft and fraud, and litigation support which helps quantify economic damages in legal cases. Forensic accountants gather and analyze financial evidence, develop tools to analyze evidence, and communicate their findings through reports and testimony in court. While starting in the US in 1995, forensic accounting is growing in India due to increased fraud and a shortage of qualified professionals. Common areas forensic accountants work include fraud investigation, business disputes, and insurance and personal injury claims.

1. BY :SHRIYA GUPTA

2. “Earth provides enough
to satisfy every man's
needs, but not every
man's greed.”
― Mahatma Gandhi

4. The identification, interpretation, and
communication of the evidence of
economic transaction and reporting events
 Forensic accounting is the „speciality‟
practice area of accounting that describe
engagements, which result from actual or
anticipated disputes or litigation.

5. BIRBAL
KAUTILYA

6. 1
•INVESTIGATIVE
ACCOUNTING
2 •LITIGATION SUPPORT

7. Investigative Accounting-It deals with
investigation of criminal matters relating to
employee,theft, securities fraud, insurance
fraud etc. it does not end with investigation
but also includes provisions of
suggestions regarding possible courses of
action.

8. Litigation Support- it involves providing
accounting assistance in litigation
matters. It primarily deals with
quantification of economic damage

9. •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.

10. Human nature:
– Hide failures; not admit them.
– Conceal problems; not discuss them.
– Defend wrong decisions; not admit
them.
– Cover up mistakes; not own up.
While Forensic Accounting developed as
early as 1995 in USA,But after the
fiasco, the same has gained proposition in
Indian context also.

11. FORENSIC ACCOUNTING ORIENTATION
TIMELY PERFORMANCE OF AUDIT
REVIEW TRANSACTIONS

12. ◦ Preliminary investigations examination of
available information
◦ Allows auditors to identify likely trouble
areas and assess the work to be done
◦ Should identify objectives to be achieved
and plan audit methodology to be used

13.  Collect the Relevant Information
◦ In depth interviews with client‟s staff
◦ Examination of hard-copy & electronic info
 Electronic info is often best source for
forensic auditors
 Specialized computer forensic auditors are
sometimes called in, depending on the
audit
◦ Off-site computers & servers, hard-copy
info, etc. are also examined

14. ◦ Highly dependent on specifics of the engagement
◦ Often involves: calculating economic damages and
sensitivity analysis, tracing of assets
◦ Should contain the details of the engagement, the
scope, any limitations and a detailed summary of the
findings
◦ Reports are generally confidential and often used in court
proceedings
◦ Period in which evidence gathered
◦ Review Process & report to the client.
◦ Identify those involved and quantify amount of fraud.
◦ Present findings to the client and court

15. ◦ Self Study (e.g., ICAI Certificate course started in
2008-09)
◦ On-the-job training
◦ Formal education
Obviously, a combination of at least two of
these approaches will lead to optimal
preparation.

16.  Revenue in forensic accounting in the United
States is expected to grow 6.8% annually from
$4.3 billion in 2012 to $6.0 billion in
2017, according to a report by IBISWorld.
 A 7.0% increase in forensic accounting
revenue is expected for 2013.

17.  Large unexpected losses
 Non-compliance with corporate policy or
internal controls
 Employees apparently living beyond their
means
 Inventory shortages remain unexplained
and poorly investigated
 Copies rather than original invoices are
being paid
 Missing and/or altered documentation

18.  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)

19.  Central Bureau of Investigation (CBI)
 Insurance Sector (TRAI)
 Securities Exchange Board of India (SEBI)
 Big Corporations and Companies ( Proactive
and Reactive Action)
 Military and Police Department
 State And Central Government.
 Banks and Financial Institutes.

20.  Serious Fraud Office: SFIO is the dedicated division of the
Department of Company affairs, which looks into the
frauds that involves the violations of multiple laws such
as Income Tax, FEMA and RBI Act etc.
 CBI: Central Beauro of Investigations has its specialized
wing to deal with the financial frauds called as economic
offenses wing.
 CVC: Central vigilance commission is the place, which
handles the crucial part of the occupational frauds ie.
Corruption. It also helps in resolving the bank fraud
cases.

21.  There is an acute shortage of forensic
accounting skill sets in India. A huge
 demand for forensic accountants has come
up in the wake of the requirements from the
investors after the Satyam fiasco. There are
only about 400 forensic accountants in the
country though India loses approximately
$40 billion because of frauds.

22. Satyam Computers Ltd.
 Founder Chief Executive Raju charged with
fraud, false corporate reporting and making
false statements to regulators.
 First CEO charged under Criminal offence for
false reporting.
 Satyam Computers case is the first of Its Type
in India.

23.  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

25.  CONTACT DETAILS :
 SHRIYA GUPTA
 +91- 7837586206
 shriyagupta137@gmail.com