FORENSIC ACCOUNTING AND AUDIT TO STRENGTHEN CORPORATE GOVERNANCE

Abstract

Forensic accounting is a distinct specialized field of accounting. It is described as a dynamic and all-encompassing instrument for investigating financial fraud that includes a thorough review of records to support financial fraud and serves as supporting documentation in legal proceedings. It involves applying scientific knowledge to legal proceedings and tries to use accounting reports for legal reasons to survive legal scrutiny for criminal prosecution. It has been determined that internal and statutory audit systems are insufficient to prevent frauds, and it is urgently necessary to redefine the function of auditors. As a result, forensic audit is expected to grow dramatically. This paper is descriptive and qualitative in nature and is based on secondary sources of data. It clarifies the idea and application of forensic accounting and recognises its significance in corporate governance. The Forensic Audit Investigation Methodology has been discussed and the regulatory stance on Forensic Audit in India has been elaborated. It also identifies the difficulties in implementing Forensic Accounting in India. The use of forensic auditing as a preventative measure has given management and regulators access to intricate financial concealment. Since stakeholders have grown to comprehend the significance of forensic audit and recognise its relevance, a regular procedure is now employed to preserve an entity's operational accuracy and managerial effectiveness. The forensic audit should be made mandatory in order to stop scams before they start and increase security awareness to fight fraud. India's financial sector reforms are intended to increase its versatility, efficiency, and competitiveness.