Future of Forensic audit : Evolution of the forensic industry has been saved
Future of Forensic audit : Evolution of the forensic industry
While the pandemic was an unexpected event that continues to shape the future of businesses, a similar inference can be drawn from the Satyam fraud, which over a decade ago forced the Indian government, law enforcement agencies, and the industry at large, to relook at the corporate fraud and compliance landscape of the country.
It was also the time that saw the rise of the forensic accountant or forensic investigator.
In 2009, “forensic accounting” was an unheard-of subject in the boardroom; much reliance was placed on the internal auditor to identify corporate malpractices. Over the years, the reliance on internal auditors remained, but there equal emphasis has been brought onto bringing forensic investigators in situations involving a conflict of interest, such as a possible collusion with employees.
Recognising these vulnerabilities, the government introduced multiple provisions in the Companies Act, 2013 to help combat fraud and brought the onus of these requirements on the management of companies. The Act also brought white-collar crime into the ambit of the Serious Fraud Investigation Office (SFIO). Over the last few years, the agency has been seen to pick up several investigations suo-moto.
The impact of these enforcement efforts are clearly reflected as 37.08 percent of respondents of our India Corporate Fraud Perception Survey, Edition IV indicated that law enforcement agencies would undertake fraud investigations and in turn, help improve fraud risk management efforts in the future.
Despite the emergence of multiple players in the corporate fraud prevention, detection, and response arena, our survey indicates that the recognition of forensic investigators as experts remains the strongest. 69.23 percent of those surveyed believe that forensic investigators are the ones to turn to for fraud investigations
With state-of-the-art technology and the opportunity to observe fraud across multiple industries, forensic investigators are able to quickly recognise the modus operandi and structure the investigation to help ring fence issues. It is this differentiator, combined with the agility to work on multiple fronts simultaneously, that gives companies the confidence that is required while the investigation is underway.