Structured Literature Review on Forensic Accounting

This literature review explores the theory, common themes, and findings of forensic accounting. It also discusses the managerial implications and limitations of the study.

Running head: LITERATURE REVIEW ON FORENSIC ACCOUNTING
Structured Literature Review on Forensic Accounting
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1LITERATURE REVIEW ON FORENSIC ACCOUNTING
Table of Contents
Brief Summary of the Theory..............................................................................................2
Common Themes and Findings from the Articles...............................................................2
Different Themes and Findings from the Articles...............................................................4
Managerial Implications of Four Articles............................................................................6
Study Limitations and Future Research...............................................................................7
References............................................................................................................................8

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Brief Summary of the Theory
According to Bhasin (2018) forensic accounting can be observed to use accounting,
auditing along with investigative skills for carrying out an analysis of an organization’s financial
statements. Forensic accounting is observed to conduct an accounting evaluation that is suitable
for the court. Henry and Ganiyu (2018) stated that forensic accounting is particularly an
accounting practice area that explains engagements which results from real and estimated
litigation or disputes. “Forensic” can be termed as suitable to be used in court and it is to that
standard along with likely outcome which forensic accountants generally need to work. Forensic
accounting theossry explanation can be deemed as specialty practice area within accounting
which explains the types of crimes those are investigated by the forensic accountants such as
“crimes against property”. Forensic accountants are also considered as fraud investigators,
investigative accountants along with forensic and fraud auditors. Imedpub.com. (2018) stated
that forensic accounting theory is a type pf investigative accounting that investigates financial
records for revealing lawsuit or criminal prosecution evidence. In analyzing forensic accounting
as an effective tool in fraud prevention within Australian retail companies four articles are
selected. This includes “Effect of Forensic Accounting Services on Fraud Reduction in The
Nigerian Banking Industry”, “The Impact of Forensic Accounting on Fraud Detection”,
“Corporate Governance and Forensic Accountants' role: Global Regulatory Action Scenario” and
“Communion of Corporate Governance and Forensic Accounting: A Study of an Asian
Country”.

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Common Themes and Findings from the Articles
The common themes along with findings those are gathered from the selected four
articles are explained under:
 Theme 1: Forensic accounting impact on fraud detection
From analysis of the four articles it has been gathered that the symptoms of fraud are
generally observed in certain mistakes carried out within proper accounting techniques by
the organizations (Henry and Ganiyu 2018). The articles also indicated that the fraud is
not simply proven as they remain in at a safe line in which authority could not convict
them. This indicates that the fraud defaulters are turning out to be smarter because of
likely mistakes caused by humans. This has made proving and detecting fraud as a hard
work for the forensic accountant. Four of the articles revealed that there is a requirement
for deeper understanding on the ways in which the defaulters carry out their defaulter act.
Without regular improvement of public along with forensic accounting, fraud cases will
be difficult to get detected. Pdfs.semanticscholar.org. (2018) indicated that this can result
in increased success within financial fraud that can also turn into a failure for addressing
the expectations of public along with shareholders. The article revealed findings
regarding accountants’ perception of forensic accounting. This elaborates low
accountants’ perception extent regarding forensic accounting.
 Theme 2: Benefits of forensic accounting in providing connecting link
Four articles selected in this paper explained the fact that the forensic accountants
were employed by the government agencies such as FBI, CIA and IRS for investigating
the major accountancy frauds (Williams 2014). However, findings gathered from these
articles indicated that within the recent reporting environment, forensic accountants are in

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increased demand for their auditing, accounting, investigative and legal capabilities. This
can have an important function in linking organizations efforts for maintaining a cohesive
policy of ethical behavior in the companies. These articles indicated that this includes two
major aspects such as litigation services which recognizes the function of accountant as
an expert consultant along with investigating services that uses skills of forensic
accountants. This also implies that the financial accountants must be skilled in financial
accounting as well as organizational internal control systems, law and institutional needs.
All the four articles gathered findings that to deal with the frauds an active support of the
government is required (Seda and Kramer 2015). Certain government authorities have
taken initiatives in developing guidelines along with procurements concerned with
investigative accounting. Along with formal certificate, one can sharpen his knowledge
along with sharpening individual skills within forensic accounting through undergoing
training under experienced forensic accountant (Seda and Kramer 2015).
Different Themes and Findings from the Articles
The different themes along with findings those are gathered from the selected four
articles are explained under:
 Theme 1: Forensic accountants role in improving corporate governance
The article “Corporate Governance and Forensic Accountants' role: Global Regulatory
Action Scenario” revealed findings about the fact that organizations require centralized
program along with established system for monitoring and measuring internal controls
effectiveness. This article also revealed that there is an alignment along corporate
governance, internal control along with external reporting activities. Awolowo and Clark

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(2017) revealed that with a better background knowledge of the legal along with
institutional needs of corporate governance. In such scenario a forensic accountant can
facilitate in developing and maintaining a comprehensive governance policy. The article
“Communion of Corporate Governance and Forensic Accounting: A Study of an Asian
Country” gathered findings regarding the fact that an effective fraud prevention program
develops a positive work surrounding in which increasing motivated employees those are
not attempted to address their responsibilities (Smith 2015). Forensic accountants can
make sure that policies of corporate governance are developed in dealing with high risk
environments in which management is pathetic is necessary. Findings from the article
was also gathered that it is vital to have properly defined bring policies that results in
quailed and honest employees (Seda and Kramer 2015).
 Theme 2: Link between forensic accounting and corporate governance
The article “Communion of Corporate Governance and Forensic Accounting: A
Study of an Asian Country” has explained the link between forensic accounting and
corporate governance. It has been found that the literature on forensic ccount8ng along
with its implementation is less in the finance curriculum (Awolowo and Clark 2017). In
contrast, “The Impact of Forensic Accounting on Fraud Detection” article reveled that
forensic accountants realizes the best way in dealing with fraud and maintain an effective
control system which includes a better control government explained by management’s
ethical behavior policy along with better corporate governance policies. Bhasin (2016)
indicated that fraud deterrence must also encompass a punishment expectation.
Considering the same, a forensic accountant can facilitate in developing policies which
clearly indicate the organizations intention to take actions against all criminal conducts.

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Moreover, the article also gathered findings that forensic accountants can ensure financial
statements integrity through actively investigating fraud along with recognizing risk areas
and fraud symptoms (Awolowo and Clark 2017).
Managerial Implications of Four Articles
Analysis of the selected four articles also facilitated on identifying the managerial
implications associated with the. from evaluating these four articles, it is gathered that the
forensic acquainting services offers companies with vital tools for analyzing fraudulent activities
but does not curb such activities (Durtschi and Rufus 2017). Certain implication was also
gathered regarding the fact that forensic accounting can offer litigation support service with
suitable professional services provision within the retail sector. In addition to that, forensic
accounting can also facilitate in offering litigation support service that can institute better
corporate governance within retail industry. This can further instill public confidence within the
government along with the overall system (Durtschi and Rufus 2017). The articles also indicated
that the fraud is not simply proven as they remain in at a safe line in which authority could not
convict them. This indicates that the fraud defaulters are turning out to be smarter because of
likely mistakes caused by humans. This has made proving and detecting fraud as a hard work for
the forensic accountant. Prevention along with detection of corruption has resulted in the
increase of the forensic accounting profession. Due to this fact, the most vital aspects are that the
retail organizations are focused on fraud detection in order to deal with crime from taking pace n
the companies and from accountants’ behalf. Vital managerial implications were also provided
concerning that the government along with regulatory authorities makes sure of the provision
regarding accounting standards. These also includes relevant guidelines regarding regulation of
forensic accounting activities within the retail firms in Australia (Durtschi and Rufus 2017).

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Study Limitations and Future Research
Through analyzing the prior researchers explained in the selected four articles, it has been
gathered that previous researchers failed to investigate the expertise of “Forensic Accounting” to
enhancing companies corporate governance (Awolowo and Clark 2017). The current research
had certain limitations as it just focuses on explaining the barriers in using forensic accounting
services that has resulted in the failure and collapse of several organizations in Australia. It did
not consider explaining existing researchers on explaining the effectiveness of corporate
governance mechanisms. It also did not consider explaining the growth in the areas of forensics
particularly in computer forensics that is driven by the increased technology use along with cyber
security crimes (DiGabriele and Huber 2015). As very less research is available in such area, the
future research will be exploratory in nature. The future research will address such gap through
carrying out investigation on necessary skills along with educational and training needs of
Forensic accounting to enhance organizations corporate governance system (Awolowo and Clark
2017).

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References
Awolowo, I.F. and Clark, M.C., 2017. Towards a Forensic Accounting Paradigm: A Neo-
Empiricist Research Agenda.
Bhasin, M. (2018). Corporate Governance and Forensic Accountants' role:Global Regulatory
action Scenario. [online] OMICS International. Available at: https://www.omicsonline.org/open-
access/corporate-governance-and-forensic-accountants-roleglobal-regulatory-action-
scenario-.php?aid=16285 [Accessed 26 Apr. 2018].
Bhasin, M., 2016. Forensic Accounting in Asia: Perspectives and Prospects. International
Journal of Management and Social.
Bhasin, M.L., 2015. Contribution of Forensic Accounting to Corporate Governance: An
Exploratory Study of an Asian Country.
DiGabriele, J.A. and Huber, W.D., 2015. Topics and methods in forensic accounting
research. Accounting Research Journal, 28(1), pp.98-114.
Durtschi, C. and Rufus, R.J., 2017. Arson or Accident: A Forensic Accounting Case Requiring
Critical Thinking and Expert Communication. Issues in Accounting Education Teaching
Notes, 32(1), pp.89-105.
Henry, A.W. and Ganiyu, A. B. (2018). Effect Of Forensic Accounting Services On Fraud
Reduction In The Nigerian Banking Industry. Advances in Social Sciences Research Journal,
4(12), pp.53-64.

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Imedpub.com. (2018). [online] Available at: http://www.imedpub.com/articles/communion-of-
corporate-governance-and-forensic-accounting-a-study-of-an-asian-country.pdf [Accessed 26
Apr. 2018].
Pdfs.semanticscholar.org. (2018). [online] Available at:
https://pdfs.semanticscholar.org/25ac/a2a4f0eefc0b9ac4fc4457513b9af788521d.pdf [Accessed
26 Apr. 2018].
Seda, M. and Kramer, B., 2015. An examination of the availability and composition of forensic
accounting education in the United States and other countries. Journal of Forensic &
Investigative Accounting, 6(1), pp.1-46.
Smith, G.S., 2015. The past, present, and future of forensic accounting. The CPA Journal, 85(3),
p.16.
Williams, J.W., 2014. The private eyes of corporate culture: The forensic accounting and
corporate investigation industry and the production of corporate financial security. In Corporate
Security in the 21st Century (pp. 56-77). Palgrave Macmillan, London.