A Study of Forensic Accounting a useful tool to combat Fraud

Greed and arrogance - the main roots of Fraud, are human nature. If we look through the financial transaction fabric, it transpires that, over the years, Fraud or deception has become an industry, not just for the group of fraudsters - academics study it, investigators investigate it, lawyers litigate on it and conference-goers debate it. In business, we must recognize fraud as a permanent risk which we must take action to prevent and manage. Fraud is theft which hits an enterprise in the pocket having direct impact on the bottom line and in turn the economy. The extent of fraud and white-collar crime resulted in the formation of various specialized units in law-enforcement agencies and also in a major demand for accountants in the fields of forensic accounting. More appropriately, crimes can only be proved with forensic reports and testimony by expert investigators. Experience shows that instead of preventing the fraud, industry is built on managing the consequences of fraud. Though, in practice, professional investigators offer services to detect the cause and creators of the crime, in recent past, endeavors towards preventing fraudulent practices are growing globally by creating a culture and environment and developing structured syllabus and training towards this direction. According to a report released by Nedcor on South Africa in 1994/1995, a large part of the amount of fraud could be attributed to white-collar crime.