Forensic Accounting and Fraud Examination as a Science: Universities Should Teach It

摘要

Always when people hear of Forensic Accounting, they immediately think of lawenforcement and the medical field. People are so ignorant as to the use of forensic when itcon-cerns accounting. This paper will discuss the application of forensic science as a whole andwhy suddenly forensic accounting has become so significant. Forensic science is an important part of the whole justice and regulatory system. Some of the different disciplines of forensic science had been primarily associated with lawenforcement; a representation which has been promoted by the media. This is misleading because forensic experts are required in all areas of criminal cases, which may serve as either the defense or prosecution. The goal of a forensic expert is to use all the available information inhis or her possession to determine the facts and, subsequently arrive at the truth. Any scienceused for the purposes of the law, is a forensic science and is a rewarding career which can beapplied to the good of society. Why then was forensic accounting not promoted or projected even though it existed for a long time? The accounting scandals and frauds in globally popular companies, such as Enron and WorldCom, have drawn every one' s attention to the business environment. With the number of-frauds and crimes increasing in the corporate world, the investing community is facing a criticalsi-tuation. Financial fraud such as that which has taken place in Enron, WorldCom, and Tyco hasre-sulted in increased pressure on auditing profession. The failure of auditors to disclose financial mismanagement by these companies has attracted criticism from the public (.Ramaswamy,). This led to the introduction of the Sarbanes-Oxley Act of 2002(Edward,2004)through which regulators made companies follow strict corporate governance guidelines. Companies are expected to follow anti-fraud and anticorruption strategies under theframe-work of corporate governance guidelines. These regulations have increased auditors' responsibility to include the role of investigator. This new level of responsibility gives a newdimension to the profession of auditors and rise to the term "forensic accountants." Today, forensic accountants are not only expected to do the regular work relative to auditing, but theyare also required to be knowledgeable in all types of financial transactions performed in anorganization. Auditors now have the responsibility to make sure that the audited financial statement gives a fair representation to shareholders and that there are no errors or frauds found.