Aproject report on forensic accounting and auditing

8/18/2019 Aproject report on forensic accounting and auditing

http://slidepdf.com/reader/full/aproject-report-on-forensic-accounting-and-auditing 1/42

A Project Report On

“Forensic Accounting

And

Auditing”

Submitted ByDurvesh S. Ni!

Ro"" No# $ %&'(

)*O) PAR+$,,

-Advnced Accountncy

'&/0$/(

)121ND *O22343 OF *O))3R*3

SARO5,N, NA,D1 ROAD6

)121ND -7.

)1)BA,$8&

S1B),++3D +O

1N,93RS,+: OF )1)BA,

A*AD3),* :3AR '&/0$/(

1 | P a g e



D3*2ARA+,ON

, Durvesh Ni! student o; )u"und *o""ege o; *ommerce6 S. N.

Rod6 )u"und -7. )umbi < 8& o; )com Prt ,, -Advnced

Accounting Set no# $ %&'(6 hereby dec"re tht , hve comp"eted

the project on the tit"e “Forensic Accounting nd Auditing”

during the cdemic yer '&/0$/(. +he in;ormtion submitted is

true nd best o; my !no="edge nd be"ie;.

Dte o; submission# $ Signture

P"ce#$

2 | P a g e



Parle Tilak Vidyalaya Association's)121ND *O22343 OF *O))3R*3

Sarojini Naidu Road, Mulund West, Mumbai 40000!

"erti#icateT$is is to certi#y t$at Mr. __________________________________________________________

Of Mcom. Part II (Advanced Accountancy) Semester _______ has undertaken

completed the project work ttled _________________________

______________________________ durn! the academc year __________

under the !udance of Prof. ______________________________________.

Su"mtted on _________________ to ths colle!e on the fulfllment of the

currculum of Mcom (Advanced Accountancy) #nversty of Mum"a.

$hs s a "onafde project work % the nformaton presented s true& and

or!nal to the "est of our knowled!e and "elef.

PR%&"T "%(RS )TRNA* PR+N"+PA*

(+- "%.%R-+NAT%R )AM+NR

A*>NO723D43)3N+

3 | P a g e



+ ackno/lede /it$ ratitude my indebtness to Pro#essors #or i1in me t$eo22ortunity to /ork on t$is 2roject and a1e 1aluable uidance #or 2re2arint$is 2roject!

+ /ould like to t$anks t$ose 2eo2le t$ose 2eo2le /$o directly or indirectly $el2me to en$ance my 2ractical kno/lede in t$e #ield o# commerce and e32ress mysincere ratitude to all t$ose /$o s$are 1aluable t$ou$ts /it$ me!

T$is is bein my #irst e##ort, t$e 2ossibilities o# errors and omissions in its

contents and 2resentation cannot be com2letely ruled out! + s$all, $o/e1er,

rate#ul to my teac$ers, colleaues and ot$er readers #rom t$eir suestions #or

its im2ro1ement!

4 | P a g e



5 | P a g e





,N+ROD1*+,ON

"or2orate #raud is on t$e rise in +ndia, com2ellin more manaement to conduct#orensic audits! 32erts on /$ite.collar crimes say #orensic accountin is not

just ainin 2rominence, t$e met$ods are c$anin #ast! (no##icial estimates1alue t$e 2ractice at Rs 400.00 crore annually but it is belie1ed t$is coulddouble in t$e ne3t t$ree or #our years!

T$at5s not sur2risin i1en $o/ t$e incidence o# cor2orate #raud is on t$e rise!

+n1estiations and risk consultin #irm 6roll uneart$ed in a recent sur1ey t$at789 o# com2anies studied /ere a##ected by #raud in :;<=, u2 #rom 79 in t$e

2re1ious year! T$e 1alue o# #raud, t$e study #ound, rose, to ><9 #rom 7>9!"rimes are o# all $ues, se1en in 2articular ? t$e#t o# 2$ysical assets, t$e#t o# in#ormation, corru2tion and bribery, internal #inancial #raud, 1endor #raud,manaement con#lict o# interest and reulatory breac$!

+nsider #raud /as 2articularly ri#e in +ndia, /it$ 89 o# res2ondents indicatin

t$e 2er2etrator /as an insider o# some sort ? a junior, middle manaement or senior em2loyee, or an aent!

W$ic$ is /$y, as Ro$it Ma$ajan, -eloitte :orensic @+ndia national leader andsenior director, 2oints out, #orensic audit 2ractices $a1e e1ol1ed sini#icantlyo1er t$e last <0.< yearsB Carlier t$e in1estiations /ere restricted to booksand records but no/ t$ere is a sini#icant element o# intellience at$erin,D $ee32lains! Ma$ajan adds t$at tec$noloy and analytics $a1e a reater 2lay in

e1ery as2ect o# #orensic accountin today, /$et$er it5s market intellience or $uman resources @ER intellience!

Not sur2risinly, t$e #inancial sector #inds itsel# most 1ulnerable to #raud! AsSandee2 -$u2ia, $ead o# 6PM5s #orensic ser1ices in +ndia, e32lains, t$is isdue to misuse o# tec$noloy and des2ite t$e 2resence o# a stron reulator!-ata released by t$e Reser1e Fank o# +ndia @RF+ s$o/ t$at 2ublic sector bankslost money to t$e tune o# Rs ,>=4 crore in t$e last t$ree years on account o#

loans @2ersonal, $ousin, cor2orate and ot$ers t$at /ere disbursed aainst #ake

7 | P a g e



documents! T$e amount /as nearly #our times $i$er t$an t$at in G0<0 o# Rs<,G0G crore!

Fut ot$er s2aces too are e32osed to #raud, /$ic$ is /$y t$e sco2e o# #orensic

auditin is ettin /ider! W$at5s more, c$artered accountants, MFAs andla/yers are no loner solely relied u2on! W$ile t$ey do #orm t$e core 2art o# #orensic accountin, t$ere is no/ a need #or #inancial researc$ analysts,enineers, journalists, artists and e1en #ormer la/ en#orcement o##icials! Ase32erts 2oint out, #raud related to a toll road or com2etiti1e biddin /ould call#or t$e ser1ices o# a 2ro#essional /it$ insi$ts into t$e in#rastructure industry/$ile a /$ite.collar crime in #inancial ser1ices and issues related to stressedassets or anti.money launderin /ould reHuire an understandin o# t$e /orkin

o# banks and #inancial intermediaries! T$e nature o# crimes is com2licated andissues suc$ as con#licts o# interests, code.o#.conduct 1iolations and reulatorynon.com2liance reHuire a stron /orkin kno/lede o# t$e sector!

More com2anies are /akin u2 to t$e #act t$at cor2orate o##ences can5t be/is$ed a/ay! +ndeed, t$e 6roll re2ort s$o/ed +ndia /as /ell abo1e t$e a1erae/$en it came to most crimes! T$e#t o# 2$ysical assets ? ==9 o# com2anies

/ere a##ected 1ersus G9 #or t$e sur1ey as a /$ole, and corru2tion ? G49com2ared /it$ <49! +ndia also beat t$e a1erae on internal #inancial #raud ? GG9 aainst <79 ? and $ad an abo1e. a1erae incidence o# in#ormation t$e#t

? G49 com2ared /it$ GG9! C+ndian com2anies /ere a/are t$ey o2erated in a$i$.corru2tion en1ironment!!! "om2anies need to a1oid acce2tin t$at #raud is

just a normal 2art o# business,D 6roll obser1ed!

Fut t$ere are ot$er reasons /$y demand may be risin! Pro1isions o# t$e ne/

"om2anies Act mean t$at e1ery com2any no/ $as to $a1e 2roacti1e #raud risk manaement 2olicies! T$e Act reHuires inde2endent directors to increasesa#euards aainst #raud and reminds t$em o# t$eir /$istleblo/inres2onsibilities! %bjections must be documented, and no/ t$at t$e Act de#ines#raud and sa#euards e32licitly, inorance o# t$e 2arameters o# eit$er /ill noloner be a de#ense!

8 | P a g e



9 | P a g e



7@A+ ,S FOR3NS,* A**O1N+,N4

:orensic accountin is a ra2idly ro/in area o# accountin concerned /it$ t$edetection and 2re1ention o# #inancial #raud and /$ite.collar criminal acti1ities!eore A! Mannin in $is book I:inancial +n1estiation and :orensicAccountinI de#ines :orensic Accountin as t$e science o# at$erin and

2resentin #inancial in#ormation in a #orm t$at /ill be acce2ted by a court o# juris2rudence aainst 2er2etrators o# economic crimes! T$e interation o# accountin, auditin, and in1estiati1e skills yields t$e s2ecialty kno/n as

:orensic Accountin /$ic$ #ocuses 1ery closely on detectin or 2re1entinaccountin #raud!

I:orensicI, accordin to t$e Webster's -ictionary means, IFelonin to, used inor suitable to courts o# judicature or to 2ublic discussion and debate!IJ T$e/ord accountin is de#ined as Ia system o# recordin and summariKin businessand #inancial transactions and analyKin, 1eri#yin, and recordin t$e results!I

T$e term #orensic accountin' re#ers to #inancial #raud in1estiation /$ic$includes t$e analysis o# accountin records to 2ro1e or dis2ro1e #inancial #raudand ser1in as an e32ert /itness in "ourt to 2ro1e or dis2ro1e t$e same! T$us,

basically, t$e #orensic accountin is t$e use o# accountin #or leal 2ur2oses!

:orensic accountin is 1ery im2ortant tool to detect, in1estiate and 2re1ent t$e

#rauds !W$et$er it is stock market #raud or bank #raud or cyber #raudL #orensicaccountin $as become an indis2ensable tool #or in1estiation! Wit$ +ndia beinranked as t$e t$ most corru2t nation, t$e needs #or #orensic accountants

become all t$e more 2ro#ound!

Forensic ,nvestigtion#$

T$e utiliKation o# s2ecialiKed in1estiati1e skills in carryin out an inHuiryconducted in suc$ a manner t$at t$e outcome /ill $a1e a22lication to a court o#

10 | P a g e



la/! A :orensic +n1estiation may be rounded in accountin, medicine,enineerin or some ot$er disci2line!

Forensic Audit#$

An e3amination o# e1idence reardin an assertion to determine itscorres2ondence to establis$ criteria carried out in a manner suitable to t$ecourt! An e3am2le /ould be a :orensic Audit o# sales records to determine t$eHuantum o# rent o/in under a lease areement, /$ic$ is t$e subject o#litiation!

FOR3NS,* A**O1N+,N4 ,)P23)3N+A+,ON ,N

,ND,A

+n +ndia, :orensic Accountin $as not ot its due reconition e1en a#ter alarmin increase in t$e com2le3 #inancial crimes and lack o# adeHuatelytrained 2ro#essionals to in1estiate and re2ort on t$e com2le3 #inancial crimes!

T$e task o# :orensic Accountants is $andled by "$artered Accountants /$oa2art #rom $andlin traditional 2ractice o# auditin as reHuired under t$e"om2anies Act, <87 or +ncome Ta3 Act are called u2on by t$e la/en#orcement aencies or t$e com2anies or 2ri1ate indi1iduals to assist inin1estiatin t$e #inancial crime or scam!

T$e "A or "MAs in +ndia are best suited #or t$is 2ro#ession due to t$eir #inancial acumen acHuired durin t$eir riorous trainin /$ic$ can be #urt$er $oned by introducin 2ost Huali#ication deree or di2loma in +n1estiatin and:orensic Accountin similar to one introduced by "+"A!

T$e "A or "MA /$o acHuire 2ost Huali#ication in +n1estiati1e :orensicAccountin can use t$e desination "A.+:A or "MA.+:A and be leally

reconiKed as t$e :orensic Accountin 32erts to $andle t$e in1estiation o#

11 | P a g e



#inancial crimes and i1e e32ert testimony in t$e "ourt o# *a/! Eo/e1er, noe##orts $as so #ar been made by t$e +"A+ and +"MA+, t$e t/o leadin statutoryaccountin 2ro#essional bodies to mo1e in t$is direction and set u2 a institute/$ic$ can o##er t$e 2ost Huali#ication di2loma in +n1estiati1e and :orensic

Accountin to its members!

Eo/e1er, ro/in #inancial #raud cases, recent stock marker scams, #ailure o# non #inancial bankin com2anies, 2$enomena o# 1anis$in com2anies and

2lantation com2anies and #ailure o# t$e reulatory mec$anism to curb it $as#orced t$e o1ernment o# +ndia to #orm Serious :raud +n1estiation %##ice@S:+% under Ministry o# "or2orate A##airs /$ic$ can be rearded t$e #irst ste2o# o1ernment o# +ndia to reconiKe t$e im2ortance and ad1ance t$e 2ro#ession

o# #orensic accountants! T$e S:+% is a multidisci2linary oraniKation $a1ine32erts #rom #inancial sector, ca2ital market, accountancy, #orensic audit,ta3ation, la/, in#ormation tec$noloy, com2any la/, customs and in1estiation!T$ese e32erts $a1e been taken #rom 1arious oraniKations like banks, Securities 3c$ane Foard o# +ndia, "om2troller and Auditor eneral and concernedoraniKations and de2artments o# t$e o1ernment! Eo/e1er, t$e mainim2ortant la/ en#orcement aency in1ol1ed directly in combatin #rauds is t$ePolice, "F+, -R+ etc!

OB53*+,93S OF S+1D:#

<! To kno/ t$e 1arious uses o# #orensic accountin in +ndia!

G! To kno/ t$e role o# :orensic Accountin @tec$niHues in #raude3amination!

R3S3AR*@ )3+@ODO2O4:#

T$e 2a2er is based on secondary data and some discussion /it$ eminent 2ersons in t$e cor2orate sector! :orensic Accountin is in1estiationaccountin /$ic$ in1ol1es analyKin, testin, inHuirin and e3aminin t$eci1il and criminal matters and #inally i1in an unbiased and true re2ort!&ust as #orensic in1estiations and lab re2orts are needed in t$e court to

12 | P a g e



sol1e t$e murder and dacoit mysteries! Similarly #orensic accountin 2laysa key role in tracin t$e #inancial #rauds and /$ite.collar crimes!

Eo/e1er, #orensic accountin co1ers a /ide rane o# o2erations o# /$ic$ #raude3amination is a small 2art /$ere it is most 2re1alent!

13 | P a g e





NA+1R3 OF FOR3NS,* A**O1N+,N4

:orensic accountin is t$e s2ecialty area o# t$e accountancy 2ro#ession /$ic$describes enaements t$at result #rom actual or antici2ated dis2utes or

litiation! O:orensic means Osuitable #or use in a court o# la/ and it is to t$at‟ ‟

standard and 2otential outcome t$at #orensic accountants enerally $a1e to /ork @"rumbley et al! G00! +t is o#ten said OAccountants look at t$e numbers but:orensic accountants look be$ind t$e numbers @%koye G008! :orensicaccountants are trained to look beyond t$e numbers and deal /it$ t$e businessrealities o# t$e situation! Analysis, inter2retation, summariKation and

2resentation o# com2le3 #inancial and business related issues are 2rominent#eatures o# t$e 2ro#ession @F$asin G00>!

+he services provided by Forensic Accountnts re s ;o""o=s• Fusiness 1aluations

• -i1orce 2roceedins and matrimonial dis2utes

• Personal injury and #atal accident claims

• Pro#essional nelience

• +nsurance claims e1aluations

• Arbitration• Partners$i2 and cor2oration dis2utes

• S$are$older dis2utes @minority s$are$olders claimin

• "i1il and criminal actions concernin #raud and #inancial irreularities cross e3amination, #ormulate Huestions

• :raud and /$ite.collar crime in1estiations

15 | P a g e



+:P3S OF FRA1DS#

:ollo/in are t$e ty2es o# #rauds

< Fank #rauds

G "or2orate #rauds

= +nsurance #rauds

4 "yber #rauds

Securities #rauds

/ Bn! Fruds#

T$e number o# bank #rauds in +ndia is substantial! +t is in increasin /it$ t$e 2assae o# time in all t$e major o2erational areas in bankin! T$ere is di##erentarea in Fank -e2osits, loan, inter branc$, accountin, transaction etc! Fank #raud is a bi business in today's /orld!

' *orporte Fruds#

+n +ndia, is risin 49 #rom leadin +ndian business declared t$at #raud e!!Satyam "om2uters stunned t$e national #inancial /orld in G008 Satyam:ounder F! Ramalinan Raju declared $e $ad in#lated 2ro#it and jacked u2 t$ecom2any5s Falance S$eet by more t$an one billion dollars!

C ,nsurnce Fruds#

T$ere is di##erent ty2e o# #rauds in insurance sectors! !! $ealt$ insurance,claims #raud, #alse claims, insurance s2eculations, a22lication #rauds etc!

0 *yber Fruds#

16 | P a g e



W$o says +ndian cyber crimes are still in t$e in#ancyB T$is is a man /$o 2enetrated t$e commerce #or $is 2ersonal bene#its to a reat use credit card,ATM card, cyber takinWork at $ome etc!

( Securities Fruds#

Alt$ou$ not corru2tion scams t$ese $a1e a##ected may 2eo2le t$ere is no /ayt$at t$e in1estor community #oret t$e under truncate Rs! 4000 crore Ears$adMet$a scam and o1er Rs! <000 "rore 6etan Parek$ scams /$ic$ ended t$es$are$older /ealt$ in #orm o# bi market!

+@3 S*A)S ,N ,ND,A#$

+b"e# Sttistics o; scm in ,ndi

Scnd" :er

reported

Scope >ey P"yers Summry

Stam2 Pa2er scam

G00 Rs!700 billion

Abdul 6arim Teli $is associates, Policeo##icers, o1tem2loyees 2oliticians

"ounter#eitin o# stam2 2a2ers! Sellin #ake to bulk 2urc$asers like banks, insurancecom2anies stock

brokin #irms! Sentencedto =0 years o# riorousim2risonment!

SatyamScam

G008 Rs!<4000crore

Ramalina Raju $is#amily, ":% ot$er

to2 le1el manaement,Auditors Foard o#-irectors

+n#lated #iures o# cas$ bank balance, o2eratin

2ro#it arti#icially boosted#rom 7< crores to 748crores, #ictitious names o# em2loyees

G S2ectrum G0<0 Rs! <>70 billion

A Raja, M6 6animoK$i, Nira Radia,ManyTelecom "os!

+rreularities in a/ardins2ectrum licenses!*icense issued on #irstcum #irst ser1e basisinstead o# auction!Ad1ancin o# cuto## date

17 | P a g e





cousins, 2oliticians,o1t o##icials se1eralmiddlemen

contract /ort$ Rs! =7 billion! T/o +ndian #irms 2layed key role in t$econtro1ersy!

19 | P a g e



1S3S OF FOR3NS,* A**O1N+,N4#

T$e ser1ices rendered by t$e #orensic accountants are in reat demand in t$e#ollo/in areas

/. Frud detection =here emp"oyees commit Frud#

W$ere t$e em2loyee indules in #raudulent neati1ities and are cau$t to $a1ecommitted #raud, t$e #orensic accountant tries to locate any assets created byt$em out o# t$e #unds de#alcated, t$en try interroatin t$em and tryin to #indout t$e $idden trut$!

'. *rimin" ,nvestigtion#

Matters relatin to #inancial im2lications t$e ser1ices o# t$e #orensic

accountants are a1ailed o#! T$e re2ort o# t$e accountants is considered in 2re2arin and 2resentation as e1idence!

C. *ses re"ting to pro;ession" neg"igence#

Pro#essional nelience cases are taken u2 by t$e #orensic accountants! Non.con#ormation to enerally Acce2ted Accountin Standards @AAS or noncom2liance to auditin 2ractices or et$ical codes o# any 2ro#ession t$ey areneeded to measure t$e loss due to suc$ 2ro#essional nelience or s$ortae inser1ices!

0. Arbitrtion service#

:orensic accountants render arbitration and mediation ser1ices #or t$e businesscommunity, since t$ey undero s2ecial trainin in t$e area o# alternati1e dis2uteresolution!

(. Sett"ement o; insurnce c"ims#

+nsurance com2anies enae #orensic accountants to $a1e an accurateassessment o# claims to be settled!Similarly, 2olicy$olders seek t$e $el2 o# a #orensic accountant /$en t$ey needto c$allene t$e claim settlement as /orked out by t$e insurance com2anies! A#orensic accountant $andles t$e claims relatin to conseHuential loss 2olicy,

2ro2erty loss due to 1arious risks, #idelity insurance and ot$er ty2es o#insurance claims!

%. Dispute sett"ement#

Fusiness #irms enae #orensic accountants to $andle contract dis2utes,construction claims, 2roduct liability claims, in#rinement o# 2atent and trademarks cases, liability arisin #rom breac$ o# contracts and so on!

20 | P a g e



FOR3NS,* A**O1N+AN+S $ +@3 B2OOD@O1NDS

OF BOO>$>33P,N4

:orensic accountin reHuires t$e most im2ortant Huality a 2erson can 2ossesst$e ability to t$ink! T$ere is no book t$at tells you $o/ to do a #orensicin1estiation! +t is about sol1in a 2uKKle or 2eelin an onion! +t takes creati1ity!

All o# t$e larer accountin #irms, as /ell as many medium.siKed and boutiHue#irms $a1e s2ecialist #orensic accountin de2artments! Wit$in t$ese rou2s,t$ere may be #urt$er sub.s2ecialiKations some #orensic accountants may, #or e3am2le, just s2ecialiKe in insurance claims, 2ersonal injury claims, #raud,construction, or royalty audits!

:orensic accountants may be in1ol1ed in reco1erin 2roceeds o# crime and inrelation to con#iscation 2roceedins concernin actual or assumed 2roceeds o# crime or money launderin! +n t$e (nited 6indom, rele1ant leislation iscontained in t$e Proceeds o# "rime Act G00G! +n +ndia t$ere is a se2arate breedo# #orensic accountants called "erti#ied :orensic Accountin Pro#essionals!Some #orensic accountants are also "erti#ied :raud 3aminers, "erti#ied PublicAccountants, or "$artered Accountants!

:orensic accountants utiliKe an understandin o# business in#ormation and

#inancial re2ortin systems, accountin and auditin standards and 2rocedures,e1idence at$erin and in1estiati1e tec$niHues, and litiation 2rocesses and 2rocedures to 2er#orm t$eir /ork! :orensic accountants are also increasinly 2layin more 2roacti1e risk reduction roles by desinin and 2er#ormine3tended 2rocedures as 2art o# t$e statutory audit, actin as ad1isers to auditcommittees, #raud deterrence enaements, and assistin in in1estment analystresearc$!

T$e #orensic Accountant is a blood$ound o# Fookkee2in! T$ese blood$ounds

sni## out #raud and criminal transactions in bank, cor2orate entity or #rom anyot$er oraniKation5s #inancial records! T$ey $ound #or t$e conclusi1e e1idences!3ternal Auditors #ind out t$e deliberate misstatements only but t$e :orensicAccountants #ind out t$e misstatements deliberately! 3ternal auditors look att$e numbers but t$e #orensic auditors look beyond t$e numbers!

:orensic accountant takes a more 2roacti1e, ske2tical a22roac$ in e3aminint$e books o# Accountin! T$ey make no assum2tion o# manaement interity @i# t$ey can assume so t$en t$ere is no need #or t$eir a22ointment s$o/ lessconcerns #or t$e arit$metical accuracy $a1e not$in to do /it$ t$e Accountinor Assurance standards but are keen in e32osin any 2ossibility o# #raud!

21 | P a g e





7@A+ DO3S A FOR3NS,* A**O1N+AN+ DO

A :orensic Accountant is o#ten retained to analyKe, inter2ret, summariKe and 2resent com2le3 #inancial and business related issues in a manner, /$ic$ is bot$understandable and 2ro2erly su22orted! Ee is trained to look beyond numbersand deal /it$ t$e business realities o# t$e situation!A :orensic Accountant is o#ten in1ol1ed in t$e #ollo/in• +n1estiatin and analyKin #inancial e1idenceL• -e1elo2in com2uteriKed a22lications to assist in t$e analysis and

2resentation o# #inancial e1idenceL• "ommunicatin t$eir #indins in t$e #orm o# re2orts, e3$ibits and collections

o# documentsL and• Assistin in leal 2roceedins, includin testi#yin in court as an e32ert

/itness and 2re2arin 1isual aids to su22ort trial e1idence!• As mentioned earlier a :orensic Accountant can be o# assistance is t/o

/ays +n1estiati1e Accountin• Re1ie/ o# t$e #actual situation and 2ro1ision o# suestions reardin

2ossible courses o# action!• Assistance /it$ t$e 2rotection and reco1ery o# assets!• "o.ordination o# ot$er e32erts, includin Pri1ate in1estiatorsL :orensic document e3aminersL "onsultin enineers!

• Assistance /it$ t$e reco1ery o# assets by /ay o# ci1il action or criminal 2rosecution!

2itigtion Support• Assistance in obtainin documentation necessary to su22ort or re#ute a

claim!• Re1ie/ o# t$e rele1ant documentation to #orm an initial assessment o# t$e

case and identi#y areas o# loss!• Assistance /it$ 3amination #or -isco1ery includin t$e #ormulation o#

Huestions to be asked reardin t$e #inancial e1idence!• Attendance at t$e 3amination #or -isco1ery to re1ie/ t$e testimonyL assist

/it$ understandin t$e #inancial issues and to #ormulate additional Huestionsto be asked!

• Re1ie/ o# t$e o22osin e32ert's damaes re2ort and re2ortin on bot$ t$e

strent$s and /eaknesses o# t$e 2ositions taken!

23 | P a g e





APP2,*A+,ON OF PR,N*,P23S OF FOR3NS,*

A**O1N+,N4 +O AN OR4AN,SA+,ON

Q %ne 2remise o# #orensic accountin is to look #or indications o# abnormaloccurrences in t$e accountin and #inancial re2ortin systems!

Q Ea1in a #orensic accountin orientation to desinin t$e accountin 2rocesses /ill 2ro1ide an o22ortunity to desin in ste2s #or 1eri#ication o# keyassum2tions and data /$ile also 2ro1idin t$e o22ortunity #or identi#yin

2ossible #raud!

Q T$e related area o# #orensic auditin can $el2 in reducin t$e transaction 2rocessin risk by $el2in to 2er#orm audit ty2e 2rocedures on a routinesc$edule!

Q Timely 2er#ormance o# audit ty2e 2rocedures can $el2 manaement andinternal audit #unction is more e##ecti1e by $el2in to identi#y and resol1e

2otential internal control breakdo/ns Huickly and t$orou$ly! +t can reducee3ternal audit costs by reularly com2letin testin 2rocedures t$at are 2art o# t$e annual certi#ied audit!

Q +n instances /$ere in#ormation 2rocessin systems co1er a broad array o# businesses andor locations establis$in routine or continuous monitorin o# alltransaction 2rocessin systems, it can be considered as a ty2e o# #orensicaccountin!

Some o; the res tht the princip"es nd ctivities o; ;orensic ccounting

cn pp"y in n orgnition inc"ude#

Q Re1ie/in o2erational transactions #or com2liance /it$ standard o2eratin 2rocedures and a22ro1als!

Q "om2letin analysis o# #inancial disbursement transactions in t$e accountinsystem to determine i# t$ey are normal or outside com2any 2olicy and, t$us,

2ossibly #raudulent!

Q Re1ie/in eneral leder and #inancial re2ortin system transactions #or 2ossible im2ro2er classi#ication or mani2ulation o# data or accounts and itsim2act on t$e resultin #inancial re2orts!

25 | P a g e



Q 3aminin /arranty claims or returns #or 2atterns o# #raud or abuse!

26 | P a g e



+@3 +3*@N,13S OF FOR3NS,* A**O1N+,N4#

T$e con1entional accountin and auditin /it$ t$e $el2 o# di##erent accountin

tools like ratio tec$niHue, cas$ #lo/ tec$niHue, a standard statistical toole3amination o# e1idences are all 2art o# #orensic accountin! +n cases in1ol1insini#icant amounts o# data, t$e 2resent.day #orensic accountant $as tec$noloya1ailable to obtain or source data, sort and analyse data and e1en Huanti#y andstrati#y results t$rou$ com2uter audit and 1arious ot$er tec$niHues!! Some o# t$e tec$niHues in1ol1ed in :orensic Accountin to e3amine t$e #rauds are

-/ Ben;ordGs 2=#

+t is a mat$ematical tool, and is one o# t$e 1arious /ays to determine /$et$er 1ariable under study is a case o# unintentional errors @mistakes or #raud! %ndetectin any suc$ 2$enomenon, t$e 1ariable under study is subjected to adetailed scrutiny! T$e la/ states t$at #abricated #iures @as indicator o# #raud

2ossess a di##erent 2attern #rom random #iures! T$e ste2s o# Fen#ord5s la/ are1ery sim2le! %nce t$e 1ariable or #ield o# #inancial im2ortance is decided, t$ele#t most diit o# 1ariable under study e3tracted and summariKed #or entire

2o2ulation! T$e summariKation is done by classi#yin t$e #irst diit #ield andcalculatin its obser1ed count 2ercentae! T$en Fen#ord5s set is a22lied! A

2arametric test called t$e .test is carried out to measure t$e sini#icance o# 1ariance bet/een t$e t/o 2o2ulations, i!e! Fen#ord5s 2ercentae numbers #or

#irst diit and obser1ed 2ercentae o# #irst diit #or a 2articular le1el o# con#idence! +# t$e data con#irms to t$e 2ercentae o# Fen#ord5s la/, it meanst$at t$e data is Fen#ord5s set, i!e! t$ere is79 @almost G=rd c$ance o# no error or #raud! T$e #irst diit may not al/ays be t$e only rele1ant #ield! Fen#ord $asi1en se2arate sets #or Gnd, =rd , and #or last diit as /ell! +t also /orks #or combination numbers, decimal numbers and rounded numbers!T$ere are many ad1antaes o# Fen#ord5s *a/ like it is not a##ected by scalein1ariance, and is o# $el2 /$en t$ere is no su22ortin document to 2ro1e t$eaut$enticity o# t$e transactions!

-' +heory o; re"tive sie ;ctor -RSF#

+t $i$li$ts all unusual #luctuations, /$ic$ may be routed #rom #raud or enuine errors! RS: is measured as t$e ratio o# t$e larest number to t$e secondlarest number o# t$e i1en set! +n 2ractice t$ere e3ist certain limits @e!!#inancial #or eac$ entity suc$ as 1endor, customer, em2loyee, etc! T$ese limitsmay be de#ined or analyKed #rom t$e a1ailable data.i# not de#ined! +# t$ere isany stray instance o# t$at is /ay beyond t$e normal rane, t$en t$ere is a needto in1estiate #urt$er into it! +t $el2s in better detection o# anomalies or

outliners! +n records t$at #all outside t$e 2rescribed rane are sus2ected o# errors

27 | P a g e





Total o1er$ead costs mi$t be di1ided by total direct labor $ours! Ratioanalysis may $el2 a #orensic accountant to estimate e32enses!

*O))ON A**O1N+,N4 FRA1D AR3AS

1su""y in ny typic" ;rud investigtion6 the ;orensic ccountnt nd his

tem =ou"d encounter simi"r ;ctu" scenrios or ;ruds6 =hich re not

pecu"ir to ny orgnistion. +he more common types re i""ustrted in the

;o""o=ing #$

Accounting ,tems Possib"e Frud Scenrios

Re1enue Reconition @a Premature reconition o# sales@b P$antom sales@c +m2ro2erly 1alued transactions

Reser1es @a Fad #ait$ estimates@b %ne time c$ares

+n1entory @a %1er.1aluation@b Non.e3istent in1entory

32enses @a -elayed e32ense reconition@b +m2ro2er ca2italisation o# e32enses

%t$ers @a Related 2arty transactions@b AcHuisition accountin

29 | P a g e



7@: 3N4A43 A FOR3NS,* A**O1N+AN+

A loical Huestion to 2ose is /$y brin in a #orensic accountant and $is team/$en t$e oranisation's internal auditor and manaement team can $andle t$esituation /$ic$ can rane #rom a sim2le em2loyee #raud to a more com2le3situation in1ol1in manaement itsel#B T$e ans/er /ould be ob1ious /$enmanaement itsel# is in1ol1ed and t$e #allout to t$e disco1ery o# t$e #raud leadsto lo/ em2loyee morale, ad1erse 2ublic o2inion and 2erce2tion o# t$ecom2any's imae and oranisational disarray enerally! nain an e3ternal

2arty can $a1e distinct ad1antaes #rom conductin an internal in1estiation!

Key Benefits of Using Forensic Accountants

Objectivity nd credibi"ity <

T$ere is little doubt t$at an e3ternal 2arty /ould be #ar more inde2endent andobjecti1e t$an an internal auditor or com2any accountant /$o ultimately re2ortsto manaement on $is #indins! An establis$ed #irm o# #orensic accountants andits team /ould also $a1e credibility stemmin #rom t$e #irm's re2utation,net/ork and track record!

Accounting eIpertise nd industry !no="edge <

An e3ternal #orensic accountant /ould add to t$e oranisation's in1estiationteam /it$ breadt$ and de2t$ o# e32erience and dee2 industry e32ertise in$andlin #rauds o# t$e nature encountered by t$e oranisation!

Provision o; v"ub"e mnpo=er resources <

An oranisation in t$e midst o# reoranisation and restructurin #ollo/in amajor #raud /ould $ardly $a1e t$e #ull.time resources to $andle a broad.basede3$austi1e in1estiation! T$e #orensic accountant and $is team o# assistants/ould 2ro1ide t$e muc$ needed e32erienced resources, t$ereby #reein t$eoranisation's sta## #or ot$er more immediate manaement demands! T$is is allt$e more critical /$en t$e nature o# t$e #raud calls #or manaement to mo1eHuickly to contain t$e 2roblem and /$en resources cannot be mobiliKed in time!

3nhnced e;;ectiveness nd e;;iciency <

30 | P a g e



T$is arises #rom t$e additional dimension and de2t$ /$ic$ e32eriencedindi1iduals in #raud in1estiation brin /it$ t$em to #ocus on t$e issues at $and!Suc$ indi1iduals are s2ecialists in rootin out #raud and /ould reconisetransactions normally 2assed o1er by t$e oranisation's accountants or auditors!

RO23 OF FOR3NS,* A**O1N+AN+

A :orensic Accountant is o#ten retained to analyKe, inter2ret, summariKe and 2resent com2le3 #inancial and business.related issues in a manner t$at is bot$understandable and 2ro2erly su22orted! :orensic Accountants can be enaed inPublic Practice or em2loyed by insurance com2anies, banks, 2olice #orces,o1ernment aencies and ot$er oraniKations!

-i *rimin" ,nvestigtions# Practicin #orensic accountants could be calledu2on by t$e 2olice to assist t$em in criminal in1estiations /$ic$ could eit$errelate to indi1iduals or cor2orate bodies! T$e #orensic accountant /ould use$is$er in1estiati1e accountin skills to e3amine t$e documentary and ot$era1ailable e1idence to i1e $is$er e32ert o2inion on t$e matter! T$eir ser1icescould also be reHuired by o1ernment de2artments, t$e Re1enue"ommissioners, t$e :ire Friade, etc #or in1estiati1e 2ur2oses!

-ii Person" ,njury *"ims# W$ere losses arise as a result o# 2ersonal injury,insurance com2anies sometimes seek e32ert o2inion #rom a #orensic accountant

be#ore decidin /$et$er t$e claim is 1alid and $o/ muc$ to 2ay!

-iii Frud ,nvestigtions# :orensic accountants mi$t be called u2on to assistin business in1estiations /$ic$ could in1ol1e #unds tracin, asset identi#icationand reco1ery, #orensic intellience at$erin and due dilience re1ie/! +n casesin1ol1in #raud 2er2etrated by an em2loyee, t$e #orensic accountant /ill bereHuired to i1e $is$er e32ert o2inion about t$e nature and e3tent o# #raud andt$e likely indi1idual or rou2 o# indi1iduals /$o $a1e committed t$e crime! T$e#orensic e32ert undertakes a detailed re1ie/ o# t$e a1ailable documentary

e1idence and #orms $is$er o2inion based on t$e in#ormation leaned durin t$ecourse o# t$at re1ie/!

-iv Pro;ession" Neg"igence# T$e #orensic accountant mi$t be a22roac$ed ina 2ro#essional nelience matter to in1estiate /$et$er 2ro#essional nelience$as taken 2lace and to Huanti#y t$e loss /$ic$ $as resulted #rom t$e nelience!A matter suc$ as t$is could arise bet/een any 2ro#essional and t$eir client! T$e

2ro#essional mi$t be an accountant, a la/yer, an enineer etc! T$e #orensice32ert uses $is$er in1estiati1e skills to 2ro1ide t$e ser1ices reHuired #or t$is

assinment!

31 | P a g e



-v 3Ipert 7itness *ses# :orensic accountants o#ten attend court to testi#y inci1il and criminal court $earins, as e32ert /itnesses! +n suc$ cases, t$ey attendto 2resent in1estiati1e e1idence to t$e court so as to assist t$e 2residin judein decidin t$e outcome o# t$e case!

-vi )edittion nd Arbitrtion# Some #orensic accountants because o# t$eirs2ecialist trainin t$ey /ould $a1e recei1ed in leal mediation and arbitration,$a1e e3tended t$eir #orensic accountin 2ractices to include 2ro1idinAlternati1e -is2ute Resolution@A-R ser1ices to clients! T$is ser1ice in1ol1es t$e #orensic accountantresol1in bot$ mediation and arbitration dis2utes /$ic$ ot$er/ise /ould $a1e

been e32ensi1e and time consumin #or indi1iduals or businesses in1ol1ed incommercial dis2utes /it$ a t$ird 2arty!

-viii 2itigtion *onsu"tncy# Workin /it$ la/yers and t$eir clients enaedin litiation and assistin /it$ e1idence, stratey and case 2re2aration!

32 | P a g e



RO23 OF FOR3NS,* A**O1N+AN+S 1ND3R

,ND,AN S+A+1+3S

T$ere is no mention o# :orensic accountants in t$e +ndian statutes so #ar butt$ere are 1arious 2ro1isions related to :orensic accountantsauditors in t$estatutes! +t can be cateoriKed under t$e #ollo/in $eads

-/ ,N93S+,4A+,ON AND ,NSP3*+,ON# :orensic auditors may $el2 t$ePolice, A"F and ot$er in1estiatin aut$orities in collectin e1idences andot$er in1estiation 2ur2oses! :or e3am2le section <> "r!P!", <8>=L section<>,< o# Pre1ention o# "orru2tion Act, <8L Section 7 o# T$e Fankers Fooks 1idence Act, <8<L

Section > o# +n#ormation Tec$noloy Act, G000L Section G08A, GG> o# t$e"om2anies Act, <87 /$erein t$e "ourt or Police may reHuire t$e skills o# :orensic accountants /$ile ins2ectin any books in so #ar as related to t$eaccounts o# an accused!

-' 3JP3R+ OP,N,ON# :orensic accountants may see and care#ully e3aminet$e accounts and balance s$eets and use $is skills to #ind out /$et$er t$ere isany #raud committed or any anomaly associated /it$ it by i1in $is e32erto2inion! T$is #inds 2lace in #or e3am2le s!4, s!<< o# +ndian 1idence Act,

<>GL s!G8= o# "r!P!", <8>=!

-C FOR3NS,* A**O1N+,N4 1ND3R *ARO -+he *ompnies

-AuditorGs Report

Order6 '&&C# +t can be cateorised under #ollo/in $eads

-i D,SPOSA2 OF F,J3D ASS3+S# "AR%, G00= reHuires t$e auditor tore2ort to t$e e##ect t$at i# a substantial 2art o# #i3ed assets $a1e been dis2osedo## durin t$e year, /$et$er it $as a##ected t$e oin concern status! +n order to

carry out t$e duties, t$e auditor $as to dra/ a corollary and re#erence to t$esection G8= "om2anies Act,<87, AS G4 @O-iscontinuin %2erations and to AAS <7 @oin "oncern and‟

t$erea#ter make $is obser1ations on t$is matter!

-ii R3POR+ ON FRA1DS# +# any #raud on or by t$e com2any $as beennoticed or re2orted durin t$e year! :ollo/in 2ro1isions "AR%, G00= areim2ortant in t$is as2ect

• AAS 4@Re1ised uides t$e Auditor to obtain a manaementre2resentation letter as t$e #rauds re2orted and detected durin t$e year

33 | P a g e



because o# t$e nature o# t$e #raud and t$e di##iculties encountered by t$eAuditors in detectin material misstatements in t$e #inancial statementsresultin #rom #raud! Accordinly, it may be concluded t$at it is enou$ i# t$e Auditor e32resses $is o2inion on t$e #rauds noticed and re2orted by t$e

manaement and not e32ected to be a detecti1e to a22roac$ $is /ork /it$sus2icion

• Anot$er major issue under t$is clause is t$at it also reHuires re2ortin o# #rauds committed by t$e "om2any! T$e Auditor is le#t /it$ no clues and ise32ected to tra1el beyond t$e books to searc$ #or market in#ormation about#rauds committed by t$e "om2any, /$ic$ is $i$ly illoical!

-iii +RANSA*+,ONS 7,+@ R32A+3D PAR+,3S# T$e #ocus o# t$e

2rimary re2ortin under t$is clause is to re2ort /$et$er transactions t$at need to be entered into a Reister in 2ursuance o# Section =0< o# t$e "om2anies Act,<87 $a1e been so entered! T$is "lause may be considered as a #urt$er ste2to/ards t$e in1estor5s 2rotection! Eo/e1er, t$e major issue $ere is t$at t$e audit#ocus $as to be s$i#ted#urt$er intensi#ied to/ards 2ro2rietary areas to #ind out t$e transactions t$atneed to be entered @a t$orou$ scrutiny o# all entries in t$e books o# accountsmay be neededL and t$en to c$eck t$e Reister #or actual recordin o# t$e sameMere reliance on t$e =0< Reister is not enou$ and t$e Auditor $as toscrutiniKe :orm No!G4AA @-isclosure o# interest by t$e -irectors to ascertainlikely transactions t$at need to be entered in t$e =0< Reister!

34 | P a g e



7@A+ *@ARA*+3R,S+,*SES>,22S S@O12D

FOR3NS,* A**O1N+AN+ POSS3S

A #orensic accountant is e32ected to be a s2ecialist in accountin and #inancialsystems!;et, as com2anies continue to ro/ in siKe and com2le3ity, unco1erin #raudreHuires a #orensic accountant to become 2ro#icient in an e1er.increasinnumber o# 2ro#essional skills and com2etencies!

T$e major skills can be di1ided in to t/o+! "ore skills @s2ecialiKed skills and kno/lede!++! Non.core skills @2ersonal skills!

,. *ore s!i""s#

• Ability to critically analyKe #inancial statements! T$ese skills $el2:orensic

• Accountants to unco1er abnormal 2atterns in accountin in#ormation andreconiKe t$eir source!

• Ability to ras2 internal control systems o# t$e client and to set u2 a system

t$at ac$ie1es manaement objecti1es in#orms em2loyees o# t$eir controlres2onsibility and monitors t$e Huality o# 2roram and c$anes made tot$em!

• Pro#iciency in +n#ormation tec$noloy and com2uter net/ork systems! T$eseskills assist accountants to conduct in1estiations in t$e I.AreasI @.

bankin, commerce etc and com2uteriKed accountin systems!

• 6no/lede o# 2syc$oloy in order to understand t$e t$inkin and moti1e

be$ind criminal be$a1ior and to set u2 2re1ention 2rorammes t$at moti1ateand encourae em2loyees!

• An in.de2t$ understatin o# t$e #raud sc$emes suc$ as misa22ro2riations,money launderin, bribery and corru2tion!

• T$orou$ insi$t and kno/lede into com2any's o1ernance 2olicies andla/s t$at reulate t$ese 2olicies!

35 | P a g e



• +nter2ersonal and communication skills, /$ic$ aid in acHuirin in#ormationabout t$e com2anies et$ical 2olicies and assist #orensic accountants toconduct inter1ie/s and obtain crucially, needed in#ormation!

• "ommand o# criminal and ci1il la/s, leal system and court 2rocedures!

,,. Non$core s!i""s# includes, but are not limited to

• Sound 2ro#essional judment!

• *ook beyond numbers and ras2 substance o# situation!

• A Isi3t$I sense t$at can be used to reconstruct details o# 2ast accountintransactions is also bene#icial!

• A 2$otora2$ic memory t$at $el2s /$en tryin to 1isualiKe and reconstructt$ese 2ast e1ents!

• "uriosity, 2ersistence and creati1ity!

• Pay attention to smallest o# detail, obser1e and listen care#ully

•

Ability to maintain $is com2osure /$en detailin t$ese e1ents on t$e /itnessstand!

+n addition to 2ersonal c$aracteristics accountants needs ot$er reHuirement i!e! a 2ro#essional Huali#ication or a certi#icate, ackno/ledin $is com2etence!Eo/e1er, t$ere is no #ormal body t$at 2ro1ides #ormal education o# t$e #raudsin +ndia!

36 | P a g e





Disdvntges o; Forensic Accounting

/ *on;identi"ity ,ssue

Since t$e scrutiny o# a com2any's #inancial records is done by an e3ternal#orensic accountant, t$e c$ances o# leakae o# con#idential matter are al/ayst$ere! +t is true t$at t$eir code o# et$ics clearly mentions t$at #orensicaccountants and ot$er members in1ol1ed in t$e scrutiny must not enae indisclosin con#idential data to outsiders, but t$e 2ossibility o# disclosure cannot

be nulli#ied!

' ,ncresed *hnces o; +hrets nd Negtive Pub"icity

+# t$e analysis o# a com2any's #inancial statements 2oints out t$e in1ol1ement o#

a 2articular 2erson in #raudulent acti1ities, t$ere is a sini#icant c$ance t$at t$e 2erson /ill try to t$reaten t$e com2any to sa#euard $imsel# #rom t$e trial!Also, any trial t$at con#irms a #raud $a22enin in t$e com2any comes under

2ublic eye and ains neati1e 2ublicity, /$ic$ directly a##ects t$e re2utation andin1estor relations o# t$e com2any!

C *osts 2ot o; )oney

:orensic accountin can be an e32ensi1e a##air because t$e 2rocedures /$ic$accountants use in1ol1e $i$.end accountin so#t/are! +# study results $a1e to

be 2resented in a trial, t$e o1erall e32enditure oes u2 e1en #urt$er, because t$e#ees o# #orensic accountants are Huite $i$! T$is can be a matter o# concern #or t$e oraniKation!

0 2osing 3mp"oyee +rust

+t is Huite ob1ious #or em2loyees to #eel o##ended /$en t$ey come to kno/ t$att$eir job is under scrutiny by a t$ird 2erson! +# no #raud is identi#ied, em2loyeesare le#t /it$ t$e #eelin t$at t$e em2loyer does not $a1e #ait$ in t$em! *ost trustcan be di##icult to reain in suc$ cases!

( 2imited 1se o; Services :ederal reulations limit t$e use o# ser1ices #rom a sinle accountin #irm!Su22ose a com2any $as tied u2 /it$ one #irm #or auditin, it cannot ask t$e #irmto 2ro1ide ot$er ser1ices to it! T$ere#ore, a com2any $as to reac$ out to se1eral#irms #or carryin out its accountin tasks!

-es2ite t$e disad1antaes associated /it$ #orensic accountin, it is, and /illcontinue to be an im2ortant 2art in t$e /orld o# business! T$is is because it$el2s oraniKations and indi1iduals to #iure out /$et$er t$eir #inancial

accounts are accurate or #abricated to $ide illeal acti1ities oin on /it$in t$e

38 | P a g e



oraniKation!

*1RR3N+ AFFA,RS#$

Finnce )inistry orders ;orensic udit on Den Bn!6 OB*

in Rs. 0C?$cr ;rud#$

T$e :inance Ministry $as ordered a #orensic audit o# -ena Fank and %rientalFank o# "ommerce a#ter some o# t$eir Mumbai.based branc$es alleedlymisa22ro2riated #unds /ort$ Rs! 4=> crore, mobilised t$rou$ #i3ed de2osits!

Pro#essional ser1ices #irm 6PM in +ndia $as been i1en t$e mandate to

undertake #orensic in1estiations, sources close to t$e de1elo2ment said!T$e re2ort is e32ected in a mont$5s time! +n t$e case o# -ena Fank, t$emisa22ro2riation /as to t$e tune o# Rs! G> crore and related to #unds mobilised#rom se1en cor2orate! +n %riental Fank5s case, it related to misa22ro2riation o# #unds amountin to Rs! <0 crore, re2ortedly belonin to t$e &a/a$arlal Ne$ruPort Trust!

T$e "entral Fureau o# +n1estiation is already lookin into t$e alleed #raud!T$e de1elo2ments are dis2arate ones and took 2lace at di##erent times! Fut a

common #eature could be t$at t$ey centered on mobilisin de2osits #i3edde2ositsbulk de2osits! T$e incidents $a1e aain brou$t to t$e #ore t$e /eak risk manaement systems in 2ublic sector banks!

CT$e 2ersons res2onsible $a1e been taken to taskL some disci2linary action is bein taken! T$ere are also some sus2ensions, some trans#ers,D said :inancialSer1ices Secretary S Sand$u! Ee /as s2eakin on t$e sidelines o# a realty and

bankin concla1e in Mumbai on Wednesday!

Sand$u added t$at t$e :inance Ministry /ould soon make it mandatory #or allsenior o##icers ? -e2uty eneral Manaers and Ms ? to undero acom2ulsory risk manaement course be#ore t$ey are considered #or 2romotions!Ee said t$ese instances @o# misa22ro2riation $a1e $a22ened at t$elo/erbranc$ le1el because o# lack o# due dilience and non.ad$erence to normsor 2rocedures!

S* Fansal, "M- o# %riental Fank, told 'usness ne in Ne/ -el$i t$at t$e bank $ad #urnis$ed t$e necessary in#ormation to t$e #orensic auditor! T$eincident in %riental Fank o# "ommerce dated to :ebruary G0<4 and t$e bank $ad s/un into action early in Marc$ itsel# to ni2 t$e #i3ed de2osit scam in t$e

39 | P a g e



bud, said Fansal! %# t$e initial amount o# Rs! <0 crore, as muc$ as Rs! <<0crore /as immediately reco1ered and $anded o1er to t$e oriinal remitter, $eadded!

40 | P a g e





Documents

Aproject report on forensic accounting and auditing