Abstract
The process of company liquidation is always full of money laundering allegations andvulnerable to fraud. This fraudulent scheme is referred to as phoenix activity. The main purposeof phoenix activity is to avoid liability and expenses, which detriments the stakeholders. Thisresearch explains the importance of the role of forensic accountants prior, during, and afterbankruptcy. The methodology used in this research is literature review examining the problemsthrough various researches and frameworks. The literature review discusses three aspectsrelated to fraudulent bankruptcy scheme i.e. motivation, the scheme processes and litigationprocesses. The research concludes that the presence of forensic accountants is important in theinsolvency prevention and detection, in their roles as (1) independent and hired experts; (2)professional legal assistance providers of Anti-Money Laundering (AML) and asset manager; (3)business valuation experts; (4) private investigators; and (5) surveillance body for anti-moneylaundering purposes.
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