The lack of respect and belief in India law enforcement agencies and the rate at which white-collar crimes have increased has prompted the development of Forensic Accounting in India. The fraud detecting agencies seems to lack time and devotion needed for detecting and prevention of errors and fraud. According to a large global accounting firm, the market is sufficiently big enough to maintain an unit devoted entirely towards forensic accounting.
Many large as well as small accounting firms as well as the tiny firms have inculcated or rather developed separate forensic accounting departments.The litmus test of investigation,first introduced by the ever great Sherlock-Homes(considered by many as the father of Forensic Accounting)is perhaps the first ever application of forensic accounting . Though ,the contribution of the other few great historians to the field of forensic accounting cannot be overlooked.
They used various tricks to investigate various crimes.The word forensic means suitable for use in court.The forensic accounting work is tailor made according to the situation and need. The gathering of information and evidences is done according to the need and situation. We can say, it is customized according to the situation.The forensic-accountants give expert evidence at the ultimate trial.All the modern medium-sized as well as the large-sized accounting firms have specialized forensic accounting departments.
Within these groups their may be further sub-specializations. Various sub-specializations include insurance claims , personal injury claims, fraud detection, construction or royalty audits. Nearly 40 percent of the top 100 US accounting firms are expanding their forensic and fraud services, according to Accounting Today. Now if we consider this data as significant then we can say that the total contribution of forensic accounting to the total revenue of the C.A. firms would be highly significant in the years to come. Under rising instances of frauds and litigation and flourishing businesses these services are considered to be very significant as they are rendered at a very competitive price.
The forensic accountants utilize the various information relating the business, utilizes financial reporting systems, various accounting and auditing standards and procedures ,investigative techniques and litigation processes and procedure to perform their work. By acting as advisors to audit committees and assisting in investment analyst research, they are playing more proactive risk reduction roles .This is possible by designing and performing extended procedures as part of the statutory audit.
The objectives include measurement of losses caused by an auditor due to his negligence ,to look into the matter whether their has been any embezzlement of cash, the amount, necessity of criminal proceedings ,computation of asset values in a divorced proceeding.