Abstract
Abstract. The article is devoted to topical issues of business protection through the prism of forensics (financial investigations). This new line of financial fraud and fraud investigation services is used to investigate and assist clients in identifying the facts and causes of fraud that may occur due to the absence or inadequate and ineffective system of internal control. The types of economic crimes faced by companies during 2017—2019 were analyzed and it was established that bribery and corruption are the leaders among economic crimes. The article reveals the essence of the concept of «forensic» as the identification of potential problems through legal and financial audit. Forensic procedures as a promising way to protect business in the context of global transformations and emerging cyber risks in an increasingly complex digital business environment have been studied. The article outlines the main directions of forensics in risk management, among which are: investigation of fraud; support in court proceedings; corporate intelligence; computer forensics; compliance with anti-corruption legislation, as well as to use preventive measures to prevent fraud. The classical methods and algorithm of financial investigation are outlined and it is noted that they may differ depending on the purpose for which forensics is conducted, the industry in which the company operates, and others. It is established that forensics for an economic entity ends with a reporting stage, during which the customer is provided with evidence of fraud, as well as the proposed recommendations. It is proposed to use the forensic mechanism when business owners: doubt an important decision; there is a leak of commercial information; mechanisms for working with suppliers have not been established; a large deal is envisaged. Keywords: forensic, audit, internal control, fraud, financial investigations, methods of financial investigation, economic security. JEL Classification F52, H83 Formulas: 0; fig.: 2; tabl.: 1; bibl.: 14.
Highlights
In an open economy, an important element of stability and efficiency of financial and economic activity of enterprises is their economic security
It is often not enough to use standard audit techniques to identify the nature of the risk, as fraud is often a preplanned and thought-out process that is accompanied by inventive measures to cover it
Researches of state financial audit with an opportunity to transform it into forensic were examined by Deb [1], who allocated corruption risks of accounting and essential influence on the process of state audit.Semenets [11] proposes to introduce into the accounting theory the concept of «forensic audit», which should be understood as the process of studying company’s reporting and economic operations in order to develop measures to respond, manage and prevent fraud on the basis of expert judgement
Summary
An important element of stability and efficiency of financial and economic activity of enterprises is their economic security. Researches of state financial audit with an opportunity to transform it into forensic were examined by Deb [1], who allocated corruption risks of accounting and essential influence on the process of state audit.Semenets [11] proposes to introduce into the accounting theory the concept of «forensic audit», which should be understood as the process of studying company’s reporting and economic operations in order to develop measures to respond, manage and prevent fraud on the basis of expert judgement. Despite the close attention that has been drawn in recent years, it is still difficult for most organizations around the world to grasp and manage emerging cyber risks in an increasingly complex digital environment. Over the past two years, 48% of Ukrainian organizations have suffered from economic crime and fraud, including through modern information technology. Ukrainian respondents expect bribery and corruption to be the most significant economic crime for their organizations in the two years (Table)
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