Forensic auditing: the procedures of the accountant in the investigation of the corporative fraud

Abstract

Price Waterhouse Coopers (2003: 13) states that seemingly no company or industry may be protected from a financial fraud risk, regardless its size or provided resources to face it. Elliot & Schroth (2003) by analyzing financial frauds committed by important companies in the early Twenty-First Century, conclude that investors, banks, suppliers, and employees all have been affected by corruption because they have faithfully believed in the institutions’ financial information which usually used intentionally different tricks by their owners, managers, and reliable staff to create a ‘structure on lies,’ and generating a harder and deeper, economical and social gap to bridge it. This paper shows some ordinary, illegal actions the corporate governances and others do to obtain profits, then we address a way Public Accountants can help to detect them efficiently. Firstly, we expose different financial fraud types and the way they happen. Taking into account that Forensic Audit is primarily a mental set than a methodological tool, later we propose a particular technique set of competence-focus forensic audit a Public Accountant should acquire to face financial fraud conflicts. And finally, we expose a required judicial framework to show the total of their investigations vis-á-vis relevant authority