The Importance and Evolution of Forensic Accounting

Abstract

Committing any fraud, whether it is a significant scheme such as in an organization, or a small project (such as cheating), could be said that it is a phenomenon inherent in human society and accompanying it throughout the history of its existence. Many individuals do not hesitate to use all sorts of (and often bizarre) methods for circumventing rules or laws, thus promoting one's interests. Since regulations and laws are subject to constant changes, fraud methods are also changing, thus stimulating the creativity of their creators.

The field of accounting does not avoid negative manifestations of human creativity. Accounting fraud arises in companies at different levels and from different motivations. The common denominator, however, is that these motivations are always selfishness and personal gain. The initiator, for example, a company director trying to improve current results, can be a fraud in the eyes of investors or a manager manipulating the necessary parameters to achieve a higher bonus. Fraud results in financial damage and loss of credibility against a specific individual or organization. Accounting fraud is a natural and unexceptional phenomenon in today's economies.

Therefore, the issue of accounting fraud is still very current and exciting. From a more optimistic perspective, it should be emphasized that the development of fraud is also occurring in the development of methods helping to detect these frauds through forensic accounting investigators. Moreover, it is an activity that, unlike an audit, does not have a regulatory framework. However, it has a wide and exciting range of methods that explicitly focus on fraud detection.

Forensic accounting and its methods are a popular topic, especially in the foreign professional literature (especially in Anglo-Saxon countries). Domestic literature offers only a limited number of publications devoted to the methodology detection of accounting fraud.

2 This thesis delves deeply into fraud as well as the forensic accounting profession. It describes forensic accountants' education, training, and careers and why the demand for this profession has suddenly increased. The necessary skills of forensic accountants are discussed, such as why these skills are valuable and discussing standard forensic accounting techniques and how they can be employed to detect and prevent fraud. This dissertation tries to explain several fraud schemes and well-known frauds that contributed to the increased demand for forensic accountants. The fraud triangle, as well as other contributing factors, are investigated. [...] [edited by Author]