Relationship Between Fraud Auditing and Forensic Accounting

Abstract

The duties, responsibilities and expectations of accountants and auditors have become clearer today. A person’s knowledge of accounting, auditing, law and modern technology may be required to find solutions to some disputes encountered in both private and business lives. This need arises in the areas that constitute the intersection of law and accounting, especially fraud auditing. This situation has led to the emergence of forensic accountancy/forensic auditorship, which is a separate recognized area of expertise. The aim of this study is to uncover the relationship between forensic accountancy or forensic consultancy or their areas of expertise with fraud and fraud auditing. Stakeholders in need of forensic accountants are also diverse. These may include Lawyers, police and law enforcement agencies, insurance companies, banks, courts, business world, government representatives and government legal entities. The main difference between forensic accounting and classical accounting is that the former investigate and reveal accounting frauds with a systematic approach. Auditing, fraud auditing and forensic accounting are closely related fields. Auditing knowledge and expertise will be useful in fraud auditing and forensic accounting. Similarly, mastering the technical and scientific aspects of accounting will also have a positive effect on fraud auditing. The three main fields of activity of forensic accountancy are fraud auditing or investigative accountancy (administrative support), litigation support (legal support) and expert witnessing (expert testimony). It is possible to benefit from many practices such as techniques applied by the independent auditor in fraud auditing, planning, applied procedures, fraud risk indicators and documentation in forensic accounting studies. In most developed countries, there are organizations providing services in the field of forensic accounting and fraud auditing, and various titles given to them. Comparatively, even in areas not directly related to forensic accounting practice in Turkey, competent authorities to make arrangements in this area. Additionally, there are various regulations regarding forensic accounting profession in the legal system.KeywordsForensic accountingFraudulent financial statementFraud auditingFraud risk factorsFraud triangleInternal auditingInternal control