Emerging Application of Forensic Accounting for Detection of Frauds

Question: Discuss about the Emerging Application of Forensic Accounting for Detection of Frauds. Answer: Introduction (Research Topic): The emerging demand for forensic accounting is already acknowledged by many accounting practitioners in the field of accounting fraud detection (Williams 2014). In other words, it describes the engagement that results from actual or anticipated dispute or litigations (Ajao, Dada and Olaoye 2013). According to Nigrini (2012), forensic accounting helps to determine whether an individual or an organization has engaged in any illegal financial activities. Pedneault et al. (2012) assert that forensic accounting as a discipline encompasses knowledge regarding fraud, financial expertise and a sound knowledge and understanding of the business reality and the working of the legal system. Thus the role of the forensic accounting is gaining popularity worldwide by perceiving one of the more effective and efficient way to decrease and check accounting fraud. The purpose of the research is to explore the role of the forensic accounting in the area of detection of fraud in different types of organizations. Based on such research topic, the researcher will design the entire research process by containing research aim, objectives and research questions. Using different tools and techniques in the methodology section, the researcher will reach towards the research objectives and Research Problem: Nowadays, series of fraud have been committed both in private and public sector of the economy. Internal auditing is indeed not guaranteed to disclose all internal frauds of the organization because an internal auditor is the representative of government or organization. Then come the idea of external auditors, yet frauds are still being committed on regular intervals. The users of financial statements are often loss their confidence in the ability of the public accounting due to the occurrence of scandals, frauds, and failures and have increased the demand for forensic accountants (Awolowo 2016). The large organizations like Cadbury Aus Plc, West farmers have been found involved in fraud due to accessibility of high level management data in paper-based-system or a system of computer alike (Fiia 2013). Most of the frauds are human nature. This problem can be resolved by the way of knowing and informing about the application and role of forensic accounting in occurrences of the prevention of fraud. According to Huang et al. (2016) forensic accounting has played a significant role in the litigation and other legislative disputes fomented by these recent failures and frauds. Thus the fraud will be detected if the public is made to know the concept of forensic accounting. Research aim and objectives: Based on the problem of the research stated above, the research will address the significance of the detection of fraud by the application of forensic accounting. By aiming at this, the researcher will address the following objectives: To discuss the role of the forensic accounting on fraud detections To evaluate the differences between the roles of forensic accounting and that of the fundamental accounting in curbing financial crimes Questions of the Research: The research is expected to answer the following questions after the accomplishing the research work: What extent does forensic accounting influence on fraud detection? How does forensic accounting better than that of conventional accounting? How forensic accounting control falsified activities in a firm? Methodology of the research: According to O'Leary (2013), the methodology of the research gives the framework for conduct the research systematically. To make people informed about the application of forensic accounting and share the knowledge about its impact on fraud detection, the researcher will select the survey method for addressing the purpose of the study by gathering the adequate amount of primary research of data. The design of the research for this study is the exploratory research design because it relies on determining phenomena in their natural setting and deriving theories that fit the analysis of the data (Pickard 2012). To gain some insights of the research topic, the researcher wills select the sample for getting the responses from the concerned respondents. The information on numerous subjects of research will be gathered from audit and accounting practitioners who have previously applied or have a clear concepts about the forensic accounting. Research Process: The researcher will follow a progressive research approach by maintaining a typical process in the following manner: By presuming that the chosen research topic holds the relevance, the researcher selects forensic accounting as the research topic in the firm section. After investigating the problem statement, the researcher will formulate the aim, objectives and questions of the research in the following of the research. To address the research questions and identify the role of the forensic accounting on fraud detection, the researcher conducts methodologies in the next section. After collecting data from accounting practitioners considering those who hold detailed application knowledge about forensic accounting, the researcher will analyze the gathered data and information in the data analysis and analysis section of this research study. In this way, the researcher will get the research outcome addressing the research objectives in the last section of the research. Collection of data and analysis: This section will be displayed and presented the empirical results of the research (Palinkas et al. 2015). This study will attempt to analyze gathered data and information about the impacts of forensic accounting on fraud detection detailing the variables like falsification of accounts, forged cheques, cashiering frauds, theft of cash/suppression of lodgment and other miscellaneous frauds (Awolowo 2016). For getting responses from the survey process, the researcher will ask questionnaires about the effectiveness of forensic accounting in the area of fraud detection. The research will also ask responses about any current challenges that they faced during the practice of such accounting. Furthermore, the researcher will arrange face-to face interviews for getting more information related to this research topic. The researcher will collect data from people associated with international accounting bodies such as members of ICA of Australia. Expected Research outcome: By discussing the applications of forensic accounting services considering both private and public sector organizations of Australia, the study will identify the different types of fraudulent activities which could be resolved by an effective application of the forensic accounting. The ineffectiveness of the forensic accounting services by corporate organizations will get a strong signal about the significant role of the forensic accounting in maintaining the corporate governance. References: Ajao, O.S., Dada, S.O. and Olaoye, S.A., 2013. Application of forensic accounting technique in effective investigation and detection of embezzlement to combat corruption in Nigeria.Unique Journal of Business Management Research,1(4), pp.065-070. Awolowo, I.F., 2016. Financial Statement Frauds: The Need for a Paradigm Shift to Forensic Accounting.system,7(10), p.23. Fiia, F., 2013. Forensic accounting: A tool for fraud detection and prevention in the public sector.(A study of selected ministries in Kogi state).International Journal of Academic Research in Business and social sciences,3(3), p.1. Huang, S.Y., Lin, C.C., Chiu, A.A. and Yen, D.C., 2016. Fraud detection using fraud triangle risk factors.Information Systems Frontiers, pp.1-14. Nigrini, M., 2012.Benford's Law: Applications for forensic accounting, auditing, and fraud detection(Vol. 586). John Wiley Sons. O'Leary, Z., 2013. The essential guide to doing your research project. Sage. Palinkas, L.A., Horwitz, S.M., Green, C.A., Wisdom, J.P., Duan, N. and Hoagwood, K., 2015. Purposeful sampling for qualitative data collection and analysis in mixed method implementation research. Administration and Policy in Mental Health and Mental Health Services Research, 42(5), pp.533-544. Pedneault, S., Silverstone, H., Rudewicz, F. and Sheetz, M., 2012.Forensic accounting and fraud investigation for non-experts. John Wiley Sons. Pickard, A., 2012. Research methods in information. Facet publishing. Williams, J.W., 2014. The private eyes of corporate culture: The forensic accounting and corporate investigation industry and the production of corporate financial security. InCorporate Security in the 21st Century(pp. 56-77). Palgrave Macmillan UK.