Forensic Accounting, Auditing, and Governance in Trinidad and Tobago

This report investigates the positive impact of forensic accounting, auditing, and investigation on corporate governance in the financial sector of Trinidad and Tobago. The study examines the increasing prevalence of financial fraud and the role of forensic accounting in mitigating these issues. The research includes a literature review on forensic accounting, fraud, and corporate governance, along with a detailed methodology involving primary data collection and SPSS analysis. The findings highlight the positive effects of forensic accounting in enhancing corporate governance within the financial sector of Trinidad and Tobago. The report addresses research objectives, provides recommendations, and suggests areas for future work, offering valuable insights into the application of forensic accounting in combating financial crimes and ensuring better governance practices.

Running head: THE POSITIVE IMPACT OF FORENSIC ACCOUNTING, AUDITING AND
INVESTIGATION ON CORPORATE GOVERNANCE IN THE FINANCIAL SECTOR OF
TRINIDAD AND TOBAGO
The positive impact of Forensic Accounting, Auditing and Investigation on Corporate
Governance in the Financial Sector of Trinidad and Tobago
Name of the Author:
Name of the University:
Author’s Note:

1THE POSITIVE IMPACT OF FORENSIC ACCOUNTING, AUDITING AND
INVESTIGATION ON CORPORATE GOVERNANCE IN THE FINANCIAL SECTOR OF
TRINIDAD AND TOBAGO
Abstract
This paper is constructed in order to have an understanding of the investigation on corporate
governance in the financial sector of Trinidad and Tobago. The background of the paper has
provided an insight on the topic and how the financial sector in the country has been performing.
It is observed that the number of financial frauds has increased and it is seen that several
measures have been taken with the help of which the “forensic accounting”” has been able to
enhance the financial sector and has been able to mitigate the financial scams and issues. The
literature of the paper provided an overview of “forensic accounting”” and how these aspects
have been looked upon by the other researchers. The methodology has determined that primary
data has been collected and the data with the help of SPSS analysis has been analysed with the
help of which they are to provide results that are desirable for this paper. The results indicate that
positive impacts are observed in “forensic accounting” and this has been able to provide better
corporate governance in the financial sector in Trinidad and Tobago.

2THE POSITIVE IMPACT OF FORENSIC ACCOUNTING, AUDITING AND
INVESTIGATION ON CORPORATE GOVERNANCE IN THE FINANCIAL SECTOR OF
TRINIDAD AND TOBAGO
Table of Contents
Chapter 1: Introduction....................................................................................................................5
1.1 Background of the Study.......................................................................................................5
1.2 Research Problem..................................................................................................................8
1.3 Research Objectives...............................................................................................................9
1.4 Research Questions................................................................................................................9
Chapter 2: Literature Review.........................................................................................................10
2.1 Introduction..........................................................................................................................10
2.2 Forensic accounting and Accountants.................................................................................10
2.3 Forensic Auditor and forensic accounting...........................................................................13
2.4 Financial Fraud....................................................................................................................14
2.5 Forensic accounting and Financial Fraud............................................................................16
2.6 Impact of Forensic Auditor in Corporate Governance........................................................17
2.6.1 Corporate Governance and Audit Functions................................................................17
2.6.2 Management Accountability.........................................................................................18
2.6.3 Agency Theory.............................................................................................................19
2.7 Summary of the literature....................................................................................................21
Chapter 3: Research Methodology................................................................................................22
3.1 Introduction..........................................................................................................................22
3.2 Justification for the choice of methodology........................................................................23

3THE POSITIVE IMPACT OF FORENSIC ACCOUNTING, AUDITING AND
INVESTIGATION ON CORPORATE GOVERNANCE IN THE FINANCIAL SECTOR OF
TRINIDAD AND TOBAGO
3.3 Research Philosophy............................................................................................................23
3.4 Research Approach..............................................................................................................24
3.5 Research Design..................................................................................................................24
3.6 Process of Data Collection and Design of the Questionnaire..............................................25
3.7 Sampling and Sample Size..................................................................................................25
3.8 Data Analysis Technique.....................................................................................................26
3.9 Ethical Consideration...........................................................................................................26
Chapter 4: Data Analysis and Discussion......................................................................................27
4.1 Introduction..........................................................................................................................27
4.2 Frequency Analysis.............................................................................................................27
Answer to Question No 1......................................................................................................27
Answer to Question No 2......................................................................................................28
Answer to Question No 3......................................................................................................30
Answer to Question No 4......................................................................................................32
Answer to Question No 5......................................................................................................33
Answer to Question No 6......................................................................................................35
Answer to Question No 7......................................................................................................37
Answer to Question No 8......................................................................................................39
Answer to Question No 9......................................................................................................41
Answer to Question No 10....................................................................................................42

4THE POSITIVE IMPACT OF FORENSIC ACCOUNTING, AUDITING AND
INVESTIGATION ON CORPORATE GOVERNANCE IN THE FINANCIAL SECTOR OF
TRINIDAD AND TOBAGO
Answer to Question No 11....................................................................................................44
Answer to Question No 12....................................................................................................45
Answer to Question No 13....................................................................................................47
Answer to Question No 14....................................................................................................49
Answer to Question No 15....................................................................................................50
4.3 Correlation...........................................................................................................................52
4.4 Regression Analysis.............................................................................................................66
4.5 Results..................................................................................................................................67
Chapter 5: Conclusion, Recommendation and Future Work.........................................................68
5.1 Conclusion...........................................................................................................................68
5.2 Addressing the research objectives......................................................................................69
5.3 Recommendations................................................................................................................70
5.4 Future Work.........................................................................................................................71
Reference List................................................................................................................................72
Bibliography..................................................................................................................................79
Appendix........................................................................................................................................83
Questionnaire.............................................................................................................................83

5THE POSITIVE IMPACT OF FORENSIC ACCOUNTING, AUDITING AND
INVESTIGATION ON CORPORATE GOVERNANCE IN THE FINANCIAL SECTOR OF
TRINIDAD AND TOBAGO
Chapter 1: Introduction
1.1 Background of the Study
Investigative accounting and “forensic accounting” is the implication of the financial
expertise and thereby examine attitude to the concerns that are unresolved that is conducted
within the aspect of the rules that is accordance to evidence. By looking at it as a discipline, it
surrounds the issues like the knowledge of fraud, financial experiences and skills, precise and
effective knowledge and gaining the understanding of the reality of the business and the
functioning of the legal mechanism. “Forensic accounting” is the multilateral process of making
use of accounting, examination skills, auditing in order to support the matters that are legal in
nature. It is anexperienced area of accounting that explains the actions that leads to litigations.
“Forensic accounting” can thereby be looked upon as the component of accounting that is ideal
for the lawful overview and subscription of the best extent of declaration. Sadaf et al.(2018)
reports that “forensic accounting” in Trinidad and Tobago can be utilised to resolve the issues
and the leakages that can lead to organizational failures. In this manner, it can be accredited to
the matter and the fact that positive “forensic accounting” process searches for mistakes, errors
and thereafter engages in the organizational notions and the various kinds of transactions prior to
crystalizing into frauds.
Alleyne and Pierce (2017) cited that there has been a huge rise in the total number of
frauds and fraudulent operations in Trinidad and Tobago and therefore there is a need for taking
the services of “forensic accountants”.
The key corporate governance process failure in order to mitigate the financial disasters
and frauds and the rise in the aristocrat and innovative financial frauds has created a grave threat

6THE POSITIVE IMPACT OF FORENSIC ACCOUNTING, AUDITING AND
INVESTIGATION ON CORPORATE GOVERNANCE IN THE FINANCIAL SECTOR OF
TRINIDAD AND TOBAGO
to the government and the investors and even to the common people. Furthermore, there has
been an instance of fraud related to the corporate financial statement audit where there has been a
capitalization of the expenditure that has led to a huge rise in the level of profit which is actually
not existent in the point of view of the auditors and yet the audits of such organizations was
rejected by their auditors that resulted to a failure of two large organizations. Gachoka et al.
(2018) have even acknowledged the rise in the level of frauds and such activities in all over the
globe.
The problems and the issues that are related to “forensic accounting”and frauds has been
continuously been argued for the past certain years as the organizations in the developed nations
like WorldCom Inc, Enron Corp and Kmart Corp have been discovered and accused of
fraudulent activities. This is still aconcern that needs to be highlighted in the business sector as
fraudulent scenarios are discovered after there has been disappearance of huge funds from the
economy. Mburugu (2016) explained that incompetency of the “statutory audit” to restrict and
mitigate the misuse of the corporate fraudulent activities and the rise in the corporate crimes has
led to a pressure in the skilled and professional accountants and the legal specialist in order to
discover an effective way of exposing these frauds in the business world.
The financial frauds related to the corporate world can be discovered from the current
bank failures globally where the management has deceitfully has given out loans without the
permission of the board and yet the annual report of these banks has been unqualified. Even
though utilisation of “forensic accounting” is not collective in Trinidad and Tobago, the extent to
which the financial indiscretions in Trinidad and Tobago is expanding particularly in the
financial sector that has put emphasis on the demand for “forensic accounting” mechanisms that
are to be exploited. Sookram (2016) cited that change is constant and the response and the

7THE POSITIVE IMPACT OF FORENSIC ACCOUNTING, AUDITING AND
INVESTIGATION ON CORPORATE GOVERNANCE IN THE FINANCIAL SECTOR OF
TRINIDAD AND TOBAGO
answer to these transformations in the fraudulent operations that is existent in the corporate
companies and the expertise of the forensic accountants which is inclusive of the legal
professionals, investigators in order to fight the corporate menace which is dominant. In
accordance to the problems that have been explained, this research paper looks to investigate the
degree to which “forensic accounting” is fighting with the deceitful operations and the effect on
corporate governance of the business firms.
The actual cause of all the issues in the financial sector is an ineffective and meagre level
of “corporate governance” and an effective level of corporate governance is looked upon to be an
effective functioning of any organization. Wilkins and Esteban Ferrer (2017) explained that
fraud cases mainly occur due to the ineffective corporate governance as instances arise that a
fraud or a mistake can take place. The absenteeism of an effective accounting regulations and
policies within a company additionally deteriorates the the corporate documenting process and it
is the auditor’s obligation to look for any kind of frauds that have been committed and the
admission to the transparency of the financial statements that have been disclosed by the higher
level management. Canterbury (2016) examined the development of “forensic accounting”
because of an extensive level of financial frauds and recognised the key responsibilities that are
related to a forensic accountant in handling with these kinds of frauds. Hence, it is seen that
“forensic accounting” make priceless additions to the corporate governance by generating a
favourable working scenario that would lead to detection of frauds, examination of the doubtful
scenarios and efficient level of communication. Minto-Coy and McNaughton (2016) recognised
that a forensic accountant is an accountant who has the capability of accounting, forensic
capabilities, auditing in order to handle with the deceitful activities. On distinct scenarios, the
forensic accountant may give out additional professional assistance, proofs, evidences on the

8THE POSITIVE IMPACT OF FORENSIC ACCOUNTING, AUDITING AND
INVESTIGATION ON CORPORATE GOVERNANCE IN THE FINANCIAL SECTOR OF
TRINIDAD AND TOBAGO
current hearing at the court and therefore may defined to be a “litigation accountant”. Therefore,
the function of an accountant is necessary to influence “corporate governance” in Trinidad and
Tobago and thereby the responses of the various organizations that are operational in the country
has to be assessed in order to recognise the awareness of “forensic accounting” in the country.
This thesis has been constructed in order to ascertain the impact of “forensic accounting”
in battling with the falsified operations in order to make sure that effective level of corporate
governance in Trinidad and Tobago is maintained.
1.2 Research Problem
Bhargava and Madala (2014) stated that “forensic accounting” is identified as having a
distinct method of the specialised knowledge and gifted with various features within which there
are neutrality, rationality and freedom. The forensic accountants have a specific communal
recognition that is significant to the interpretation of the economic problems into the symbolic
representation of trust. The significant social value that is possessed by the forensic accountants
is the key capability by which the interpretations are understood.
“Forensic accounting” provides cultural arbitration for the political and the economic
aspects. It is the area within which the cultural arbitration of the claims related to the political
and economic aspects are fulfilled. In the first few years of the twentieth century, there has been
a large number of corporate failures, scandals and failures. These scenarios have led to the
various recessions and thereby had an impact on the effective operations of the independent
market. There were certain scenarios that have been handled by the public accountants. The
failures, scandals and frauds have led to the loss of confidence by the financial reports and have
led to the development and rise in the demand for forensic accountants.

9THE POSITIVE IMPACT OF FORENSIC ACCOUNTING, AUDITING AND
INVESTIGATION ON CORPORATE GOVERNANCE IN THE FINANCIAL SECTOR OF
TRINIDAD AND TOBAGO
On the other hand, there have been big organizations that have been found to be involved
in frauds and scandals as it is seen that the higher level management has the access to the
important data for the organization and thereby make changes in the same in order to persuade
the society and the community. Hence, the forensic accountants have played a key role in the
litigation and the other legal arguments stimulated by the current failures and frauds. The factor
is that very less knowledge and information is available and therefore this study has been
undertaken in order to discover the impact of “forensic accounting” in the corporate governance.
1.3 Research Objectives
The aim of the research areassociated to the understanding of the areas and the aspects that
would be taken into consideration when assessing the research topic. Hence, the research
objectives that have been constructed for this paper are as follows:
 To determine whether “forensic accounting” is an efficient technique and tool for
explaining the financial frauds in the financial sector in Trinidad and Tobago
 To assess the essentiality of “forensic audit” in guaranteeing “corporate governance” in
the financial sector of the country.
1.4 Research Questions
The research questions have been constructed in order to discover the aspects on which
research would be undertaken by the researcher in order to discover the desired results that is in
accordance to this topic. The research questions are therefore as follows:
Q1. What is the effective tools and techniques for addressing the financial frauds in financial
sector in Trinidad and Tobago?

10THE POSITIVE IMPACT OF FORENSIC ACCOUNTING, AUDITING AND
INVESTIGATION ON CORPORATE GOVERNANCE IN THE FINANCIAL SECTOR OF
TRINIDAD AND TOBAGO
Q2. What is the essentiality of forensic audit in safeguarding“corporate governance” in the
financial sector in the country?

11THE POSITIVE IMPACT OF FORENSIC ACCOUNTING, AUDITING AND
INVESTIGATION ON CORPORATE GOVERNANCE IN THE FINANCIAL SECTOR OF
TRINIDAD AND TOBAGO
Chapter 2: Literature Review
2.1 Introduction
This segment of the thesis has the purpose of addressing the characteristics and the
factors that have been taken into consideration by various previous researchers who have
commenced research on various elements that are related to “forensic accounting” in several
nations. These elements have been able to recognise the kind of corporate frauds, scandals and
failures that are taking place in several economies and the severity of these kinds of issues. The
literature review would therefore address the suggestions and the opinions that have been
provided by other researchers with the help of which an idea can be attained and accordingly this
research paper can be concluded in an effective manner.
2.2 “Forensic accounting” and Accountants
There have been numerous researchers and authors who have come up with several
explanations for the term “Forensic Accounting”. Blanc et al. (2017) explained “forensic
accounting” as the process and the exercise of extensive collection of data and the assessment in
the regions of trial assistance consultation, skilled observing and inspection of frauds. Khan,
Serafeim and Yoon (2016) has the believe that forensic examination is all about the
establishment and the determination of the data that supports any kind of legal cases and this
means to make use of “forensic accounting” tools in order to identify and evaluate a crime
thereby addressing all their characterises and accordingly recognise the malefactors. Yiu, Wan
and Xu (2018) have viewed that forensic is the mechanism of briefing, understanding and
presenting the difficult financial problems in a clear manner, concisely and factually in the law
court as a professional. “Forensic Accounting” is adequately complete and thorough with the
help of which an accountant in their self-governing decision can provide an answer the