Forensic Accountant: Role played in unfolding various frauds and crimes

A company seeks the help of forensic accountant when it smells something wrong in financial dealings and is not able to find the reason behind it. This may be some mischief, frauds or anything that can cause damage in the financial position of the Organization. Fraud can be of various types such as, forging important documents, cooking up financial information, misappropriation of cash/ stock and money laundering. The stock frauds in India can be categorized into various types: the Flying Companies including IPO web as the investors were attracted by huge returns from the listed shares and in the early 20th century the norms and principles of the regulatory bodies were not strong. Brokerage Misguidance which includes misleading customers by guiding investors in an uncanny manner. High Tech Frauds emerges with the new technology being coming up leading to highly vulnerable frauds. Market Manipulation case can be traced from the example from Ketan Parikh and Harshad Mehta been noted for making abnormal profits by manipulating the market prices of the shares deliberately. There could be various reasons behind a fraud like, ego, fraud intensity, greed etc, and it would start from a very little thing and then after sometime it becomes a part & parcel of the life of the fraudster. A forensic accountant opines that the management should adopt a simple policy that it “Trust, but to Verify” principle since it is found that most of the forgery are done by the CFO’s the most trusted employee by the management. In forensic investigation a group of professional forensic accountant starts its investigation by meeting the senior members of the management and starts shooting questions. The investigator then plans the structure of the interview, place of the interview, number of interviews and the series of questions that would be asked. In order to be successful in investigations, the investigator follows some general principles during investigations that include: conduction of the interview with the potential suspects, manner the questions are posed, shoots pertinent questions depending on the fact whether the interviewee is a lead or a prime suspect, observing the body language and words that could disclose deception. . We can say that corporate world should be very alert and watchful so as to avoid the crimes and frauds that have come up with the so called globalization.