Forensic Accounting Report: Corruption in Public Sector Analysis

This report delves into the critical role of forensic accounting in addressing global corruption, with a specific focus on the public sector. It begins by highlighting the pervasive nature of corruption and its detrimental effects on economic development, emphasizing the importance of accounting and auditing systems in maintaining financial transparency and detecting fraudulent activities. The literature review explores the relationship between corruption levels and the effectiveness of accounting and auditing practices, and the theories of public sector corruption and reform. The paper then examines the impact of globalization on corruption, discussing the roles of international organizations like the World Bank, WTO, and IMF. The report concludes that governments must play a pivotal role in eradicating corruption at all levels, from international to national, to foster global productivity and reduce poverty. The paper emphasizes the need for enhanced public oversight of auditing, improved accounting regulations, and the adoption of international accounting and auditing standards to combat corruption effectively.

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Table of Contents
Introduction................................................................................................................................2
Literature Review.......................................................................................................................2
Corruption and System of Accounting...................................................................................2
Theories of Public Sector Corruption and Reform................................................................3
Globalization and Corruption.................................................................................................3
Conclusion..................................................................................................................................4
Reference....................................................................................................................................5

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Introduction
All around the world, the focus on subject of the corruption has been increased.
Corruption is debatable and complicated phenomenon. It is the barrier, which postpones
economic development of the country. Occurrence of corruption in public sector has negative
effects such as decrease in the taxation amount, increase in general expenses and therefore, it
increases financial deficit and ultimately creates macroeconomic uncertainties (Passas 2017).
Hence, this research paper aims analyze global fight against corruption and accounting role in
fighting against corruption in public sector.
Literature Review
Corruption and System of Accounting
Corruption is considered to be the global problem and it has negative impacts on all
the countries around world. It is the main player in global agenda, which has able to draw
attention of different academic researchers around world. Further, accounting play major role
in global fighting against corruption. The system of accounting and auditing have significant
role in any company. Accounting helps in providing information regarding economic entities
by financial reports and statements (Sheth 2017). The relationship exist between corruption
level and accounting & auditing. The corruption level in country depends enormously
depends on its system of audit and accounting. The prior research has found that financial
reports with high level of disclosures and transparency shows lower corruption level. The
government of the country can be able to reduce corruption level with the help of
strengthening its system of audit and accounting (Steger 2017). The system of accounting is
key element of management system and it has greatest role for detecting corruption cases,
particularly fraud cases and bribery. It is whether in public or private sector, the most
important element in structure of organization is audit and accounting system. The

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accounting role has able to change policies of development that ranges from state capitalism
by neo-liberal market based to the policies of good governance. However, any changes in the
system of accounting affects the factors such as international flow of capital, foreign
investment, accounting scandals, international trades, globalization process and others
(Hopper, Lassou and Soobaroyen 2017).
Theories of Public Sector Corruption and Reform
There is great relationship in between corruption and democracy, as it starts from
buying votes to political influence to control by the political power. The reform of public
sector has become issues on agenda of government in different jurisdictions. This
preoccupies both in developing and developed nations. The implementation of principle is
characterized by globalization and it is taken as part of reform strategies, which is pursued by
the public sectors in developing nations (Sheth 2017). There is negative effect of the
globalization on the developing nations and their less-privileged citizens because of
corruption phenomenon. The issues of public policy at stake are consists but not limited to
capital markets liberalization, government asset’s privatization, foreign investments and
others. The dominance of corruption is the greatest obstacles for the progress of economy.
Any increase in corruption level have negative effects on public policies effectiveness
(Wójcik 2015).
Globalization and Corruption
There is great impact of globalization on the economic growth of the country. The
economic globalization is characterized by long distance goods flow, services and capital as
well as perceptions and information, which accompany market exchanges. The political
globalization is characterized by diffusion of the government policies and social globalization
is characterized by spread of information, images, people and ideas (Hoogvelt 2018). The
globalization is not driven inevitably by the socio-political factors, technological innovations

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and markets, which is depicted in most of the popular writing, rather it is partly outcome of
policies from the major regulators of global economy, some of which are World Bank, WTO
and IMF. Each one is having different set of missions such as WB promotes development,
WTO fosters trade and IMF maximizes financial stability (van Helden and Uddin 2016). The
public sector companies should seek global standardization through adoption by the
government of better public oversights of auditing, modified regulations of accounting, better
resources for implementing standards and international accounting & auditing standards
(Haque and Azmat 2015).
Conclusion
Therefore, this research paper concludes that corruption has erupted in the public
sectors. Further, it has been found that globalization has caused “race to bottom” in between
the nations for seeking to provide the off-shore centres in order to benefit the major
businesses. The increase in corruption of public sector has resulted into lack of the financial
transparency, which ultimately has weakened the economies of country. Lastly, it can be said
that government should play significant role in eradicating corruption at all the levels,
international, regional and national for increasing global productivity and reducing rate of
poverty for accomplishing desired goal.

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Reference
Haque, M.Z. and Azmat, F., 2015. Corporate social responsibility, economic globalization
and developing countries. Sustainability accounting, management and policy journal.
Hoogvelt, A., 2018. Globalisation and imperialism: Wars and humanitarian intervention.
In Revitalising communities in a globalising world (pp. 17-42). Routledge.
Hopper, T., Lassou, P. and Soobaroyen, T., 2017. Globalisation, accounting and developing
countries. Critical Perspectives on Accounting, 43, pp.125-148.
Passas, N., 2017. Globalization, criminogenic asymmetries and economic crime.
In International Crimes (pp. 17-42). Routledge.
Sheth, D.L., 2017. Globalization and new politics of micro-movements. In Social
Movements (pp. 112-151). Routledge India.
Steger, M.B., 2017. Globalization: A very short introduction (Vol. 86). Oxford University
Press.
van Helden, J. and Uddin, S., 2016. Public sector management accounting in emerging
economies: A literature review. Critical Perspectives on Accounting, 41, pp.34-62.
Wójcik, D., 2015. Accounting for globalization: evaluating the potential effectiveness of
country-by-country reporting. Environment and Planning C: Government and Policy, 33(5),
pp.1173-1189.