Forensic Accounting – the Missing Link in Education and Practice

Abstract

Financial scams and fraud appear to be a global problem. Although research related to financial fraud and embezzlement varies slightly from region to region, fraud schemes and perpetrator characteristics are pretty similar. In Serbia in particular, forensic accounting is an underdeveloped area in education and practice, and is thus often replaced by and considered to be an audit, even in academic circles, whereas forensic accountants are viewed as auditors. The correlation between auditing and forensic accounting is a dynamic process that changes over time due to political, social and cultural events, and the auditors themselves are expected to have, at least, adequate knowledge and skills to recognize a financial fraud. However, detailed disclosure of financial fraud and embezzlement is the matter forensic accountants are dealing with. These experts have the skill sets in many areas and are able to apply their skills and abilities in one area, while working in another. Forensic scientists need to be familiar with not only financial accounting, but also with tax and business law, criminology, psychology, etc. The aim of this paper is to show the incidence of financial fraud and embezzlement, indicating the consequences they bear and to explore the extent to which forensic accounting is represented in academic institutions and practice in the Republic of Serbia. It also explains the general concepts of services in the field of forensic accounting. As a research method in this paper the content analysis method is applied. With respect to the consequences of financial fraud and embezzlement it carries, and lessons learned from recent financial scandals in the world and in Serbia in particular, we can conclude that the development of forensic accounting in education and practice is of utmost importance. Although this process is neither easy nor cheap, the benefits it provides are invaluable. The present research topic should be given more attention, given a large number of fraudulent acts in the financial statements that characterized the operations of a substantial number of Serbian companies. A higher education is being proposed in the area of forensic accounting, both at the academic level and in the accounting practice.