A Structured Literature Review on the Role of Forensic Accounting

This structured literature review delves into forensic accounting, examining its role in fraud detection and its connection to corporate governance. It synthesizes findings from multiple articles, highlighting the impact of forensic accounting on uncovering financial fraud, its advantages in linking ethical policies, and its potential to improve corporate governance through effective internal controls and fraud prevention programs. The review also addresses the limitations of current research and suggests future research directions, particularly concerning computer forensics and cyber-crimes. Managerial implications are discussed, emphasizing the value of forensic accounting services in providing litigation support, risk assessment, and enhanced corporate governance within the retail sector. Desklib provides access to similar solved assignments and past papers for students.

0Running head: FORENSIC ACCOUNTING
Structured Literature Review on Forensic Accounting
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Table of Contents
Summary of the Theory in Brief..........................................................................................2
Common Findings from the Articles...................................................................................2
Impact of Forensic Accounting on Fraud Detection........................................................3
Advantages of Forensic Accounting Attributed to Connection of Links........................3
Differences in Finding from Articles...................................................................................4
Improvement of Corporate Governance through Forensic Accounting..........................4
Forensic Accounting’s Relation with Corporate Governance.........................................5
Managerial Implication of the Articles................................................................................5
Study Limitation and Future Research................................................................................6
References............................................................................................................................7

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Summary of the Theory in Brief
Bhasin (2018) referred forensic accounting as the observation of auditing as well as
accounting that is being carried parallelly with the investigation of the financial statement of the
concerned organization. Forensic accounting is considered to conduct the accounting evaluation
as per the situation of the court. It has also been stated that forensic accounting is a practice
which explains the involvement that is the outcome of actual as well as estimated disputes. In
this theory, “Forensic” is the term which is widely used in court for which it is considered as
suitableand the likely outcome is of almost same standards which the forensic accounting
generally uses. The theory of forensic accounting is referred to as the specialty practice within
the various accounting processes which encompasses all the types of crime those are related to
property (Carcello, Hermansonand Ye2015). In other words, forensic accounting deals with the
crimes against property. The forensic accountants can also be termed as the investigators of fraud
who actually with other fraud auditors investigate the accountants. Moreover, forensic
accounting is also referred to as the investigation of the financial records in order to reveals the
evidence related to lawsuit or criminal prosecution. While analyzing the theory during and its
purpose as an effective tool against fraud within Australian retail companies, there are four
articles which is highlighted. 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”.
Common Findings from the Articles
The common explanation of the finding from the four selected articles are as follows:

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Impact of Forensic Accounting on Fraud Detection
Analysis of the aforementioned articles has highlighted that the symptoms of fraud are
reflects itself within a proper check following the accounting techniques by an organization. It
has also indicated that the part of accounting that has been frauded is hidden from naked eyes in
he safe line in which the conviction becomes tough. This also can be said as the fraudsters are in
an advantage due to mistakes caused by some of the accountants. Hence, this turns out to make
the work of forensic accountants tough to detect the fraud (Koh, Arokiasamy and Suat 2015).
This also points out that a deep analysis is needed to be carried out to detect the defaulter’s act.
Therefore, an active involvement of the public is also needed with forensic accountants to detect
the fraud. In other word it can also be said that an increase in such financial fraud has been
successful due to failure of addressing the anticipation and expectation of public and
shareholders. The article also throws a light on the perception of accountants on forensic
accounting (Adekola andSergi2016).
Advantages of Forensic Accounting Attributed to Connection of Links
The articles selected in this paper also revels the employers of the forensic accountant
who are generally the government agencies such as IRS, CIS and FBI for detecting the cases of
fraud. These articles reflect that there has been need of such forensic accountant for their
capabilities for accounting, investigating auditing and taking on the necessary legal actions. This
also explains the importance of forensic accounting on linking the effort of the organization on
its policies on ethics (Gray 2014). The two major aspects of the articles have been highlighted
that is the litigation services that considers the skill of accountant as a proficient consultant and
the investigating services which takes the help of forensic accountants. This also reflect that the
financial accountant must be well equipped with the knowledge of internal control system along

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with that of auditing the financial statement. The chosen articles also state that in order to trap
the fraud, the support of government is of utmost importance. Hence, there are certain
government bodies those have developed certain guidelines and procedures that is concerned
with the forensic accounting. An individual with a proper training under a forensic accountant
can sharpen his/her skill by receiving a certificate (Nigrini 2017).
Differences in Finding from Articles
The different explanation of the finding from the four selected articles are as follows:
Improvement of Corporate Governance through Forensic Accounting
The article “Corporate Governance and Forensic Accountants' role: Global Regulatory
Action Scenario” refer to the requirement of the organization to centralize the program while
establishing system which would monitor as well as measure the internal control effectively. It
also reveals the relationship among the internal control and corporate governance along with
external reporting actions. It has also been stated that it also improvises the background
knowledge of legal and corporate governance of the institution (Pedneaultet al.2014). Therefore,
in such a scenario, the forensic accountant should showcase his/her skill to develop as well as
maintain a proper governance policy. The article “Communion of Corporate Governance and
Forensic Accounting: A Study of an Asian Country” reflects that an effective program for fraud
prevention creates a positive surrounding at the workplace which acts as a motivation for the
employees who are avoiding their responsibilities. The core responsibility of forensic accounting
is to ensure that the corporate governance policies should deal with environments with high risk
when he management is weak. The finding also includes the proper implementation of the
policies which is vital in order to keep the employees honest (Singleton and Singleton 2017).

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Forensic Accounting’s Relation with Corporate Governance
The article “Communion of Corporate Governance and Forensic Accounting: A Study of
an Asian Country” has highlighted the relationship between the forensic accounting and
corporate governance. It has been observed that the financial curriculum has a less literature on
the forensic accounting. However, another article “The Impact of Forensic Accounting on Fraud
Detection” reveals that fraud detection could effectively be realized by the forensic accountant
while maintaining an effective control system encompassed with an improvised control as per
the management’s ethical policy as well as other improved corporate governance policies (Van
Akkeren, Buck and MacKenzie 2014). It is also indicated that the to discourage fraud practice, a
punishment is also expected s it helps to deter the same. Therefore, the forensic accountant ae
capable of facilitating the development of policies which reflect the intention of the organization
and its capability to take actions against the criminal. Furthermore, the article also highlights that
the integrity of financial statements can be ensured by the forensic accountants by understanding
the risk areas and finding fraud symptoms through active investigation (Carroll
andBuchholtz2014).
Managerial Implication of the Articles
With analysis of the aforementioned articles, the managerial implication that is associated
the same can be evaluated. It has been learned that the forensic accounting service can provide
the companies with important tools which analyze the fraudulent actions but does not curb the
same. It has also been gathered that the forensic accounting can also provide a support regarding
litigation along with other professional service to the retail sector as well (Ewa and Udoayang
2017). Moreover, the forensic accounting can provide various other support which can help the
institute to implement improved corporate governance to the retail industry. Hence, it can restore

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the confidence of public on government as well as the overall system. As discussed previously
that the fraud is tough to find within the financial statement as it remains within the safe line, it
increases the work for the accountants to find it. This has increased the demand for the forensic
accountant within the retail industry as they also provide with various other services to ascertain
risk and decrease the level of fraud within the industry (Golden, Skalak and Clayton 2016). This
has been a vital aspect in the retain industry to deal with the fraud especially during the
accounting process. The accounting standard is also very vital for its managerial implication
concerning the regulatory authorities. Hence, the relevant implication isconsidered vital within
the retail firm in Australia.
Study Limitation and Future Research
While analyzing the selected articles, it has been learned that prior researches have not
investigated the forensic accounting properly to improve the corporate governance of the
companies. There are certain limitations that generally focuses on the barriers of he forensic
accounting and its uses such as it fails to exaggerate current research which concerns with the
effectiveness of corporate governance mechanism (Digabriele 2016). It also did not consider the
growth prospective of the forensics especially the forensics regarding the computers as todays
world is driven by technology as so there is an increase in cyber-crimes. With a limited number
of research available in this area, the research which are to be held in future will be of probing
nature. Hence, the researches that are to conducted in future will address the gaps while carrying
the investigation process in essential skills while incorporating the training and education on
Forensic accounting in order to improve the corporate government system.

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References
Adekola, A. andSergi, B. S., 2016. Global business management: A cross-cultural
perspective.Routledge.
Bhasin, M. L., 2015. Contribution of Forensic Accounting to Corporate Governance: An
Exploratory Study of an Asian Country.
Carcello, J. V., Hermanson, D. R., and Ye, Z., 2015. Corporate governance research in
accounting and auditing: Insights, practice implications, and future research directions. Auditing:
A Journal of Practice & Theory, 30(3), 1-31.
Carroll, A. andBuchholtz, A., 2014. Business and society: Ethics, sustainability, and stakeholder
management. Nelson Education.
Digabriele, J. A., 2016. An empirical investigation of the relevant skills of forensic
accountants. Journal of Education for Business, 83(6), 331-338.
Ewa, E. U., and Udoayang, J. O., 2017. The Impact of Internal Control Design on Banks‟ Ability
to Investigate Staff Fraud, and Life Style and Fraud Detection in Nigeria. International Journal
of Research in Economics & Social Sciences, 2(2), pp. 32-43.
Golden, T. W., Skalak, S. L., and Clayton, M. M., 2016. A guide to forensic accounting
investigation. John Wiley & Sons.
Gray, D., 2014. Forensic Accounting and Auditing: Compared and Contrasted to Traditional
Accounting and Auditing. American Journal of business education, 1(2), pp. 115-126.

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Koh, A. N., Arokiasamy, L., and Suat, C. L. A., 2015. Forensic accounting: Public acceptance
towards occurrence of fraud detection. International Journal of Business and
Management, 4(11), p. 145.
Nigrini, M., 2017. Benford's Law: Applications for forensic accounting, auditing, and fraud
detection (Vol. 586). John Wiley & Sons.
Pedneault, S., Silverstone, H., Rudewicz, F. and Sheetz, M., 2014. Forensic accounting and
fraud investigation for non-experts. John Wiley & Sons.
Singleton, T. W., and Singleton, A. J., 2017. Fraud auditing and forensic accounting (Vol. 11).
John Wiley & Sons.
Van Akkeren, J., Buckby, S., and MacKenzie, K., 2014. A metamorphosis of the traditional
accountant: An insight into forensic accounting services in Australia. Pacific Accounting
Review, 25(2), 188-216.