Forensic accounting is the application of accounting skills and investigative skills to address legal issues. A forensic accountant analyzes financial evidence to detect fraud and other illegal activities. In India, forensic accounting is an emerging field, with the Association of Certified Fraud Examiners offering courses. Forensic accountants perform investigations, analyze financial statements for anomalies, quantify damages, assist in litigation, and testify in court. Their work requires accounting knowledge as well as an understanding of auditing, law, and investigative techniques. As financial crimes increase, forensic accounting can help address issues that traditional auditing cannot.

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FORENSIC ACCOUNTING AND FRAUD DETECTION
CA Sanjay K Ruia
CA Susil K. Gupta
Forensic Auditors
Table of contents
1. Introduction and Background
2. What is Forensic Accounting?
3. What does a Forensic Accountant do?
4. What types of assignments does a Forensic Accountant perform?
5. What is a typical approach to Forensic Accounting assignment?
6. Who retains a Forensic accountant?
7. What characteristics/skills should Forensic Accountant posses?
8. What is the presence of Forensic Accounting in India?
9. Why Chartered Accountants should enter in to Forensic Accounting?
10. Forensic Accountants: Recognition in Indian Law
11. Conclusion
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1. Introduction and Background:
The term, Forensic Accounting was coined by Maurice Paulobet in 1946. Worldwide, Sherlock
Holmes is considered to be the first forensic accountant. However, in India, Kautilya was the
first person to mention the famous forty ways of embezzlement in his book Arthashastra
during the ancient times. He was the first economist, who openly recognized the need of the
forensic accountants. Similarly, Birbal was the Scholar in the time of King Akbar. He used
various tricks to investigate various crimes. Some of his stories give the fraud examiner a brief
idea about the Litmus test of investigation.
Now in 21st century, Forensic accounting has come into limelight due to rapid increase in
financial frauds and white-collar crimes. Fraud was something the internal or external
auditors were supposed to guard against through their periodic audits. Now, the
accountants know that auditors can only check for the compliance of a company's books
to generally accepted accounting principles, auditing standards, and company policies.
Thus, a new category of accounting was needed to detect the fraud in companies that
suspected fraudulent transactions. This area of accounting is known as 'forensic accounting'.
2. What is Forensic Accounting?
Forensic Accounting is a simply analysis of evidences. Forensic accounting is the specialty
practice area of accounting that describes engagements, which result from real or
anticipated litigation. The word forensic accounting can be divided into two parts –
· Forensic means relating to, or used in courts of law or public debate or argument.
· Accounting means language that provides information about the financial position
of an organization.
According to American Institute of Certified Public Accountants (AICPA): "Forensic
accounting is the application of accounting principles, theories and disciplines to facts or
hypothesis at issues in a legal dispute and encompasses every branch of accounting
knowledge."
To make it simple, the integration of
· Accounting skills
· Auditing skills and
· Investigative skills, creates the specialty known as Forensic accounting
There are two major components of Forensic accounting:
1. Litigation services – this recognizes the role of an accountant as an expert
consultant and provides assistance of an accounting nature in a matter involving
existing or pending litigation
2. Investigative services – this requires use of forensic accountants skill and may require
courtroom testimony
Forensic Accountant
"Auditor should be watchdog and not be the bloodhound". It's a good quote that every
auditor should know. This quote makes the definition of Forensic accountants even more
simple. The forensic Accountant is a bloodhound of Bookkeeping. These bloodhounds sniff
out fraud and criminal transactions in bank, corporate entity or from any other organization's
financial records. They hound for the conclusive evidences.
The traits of the forensic Accountants could be compared to well bake Pizza:
Layers/Levels Pizza Forensic accountant
The base Size and extent of baking decide the
quality
The base is accounting knowledge.
The middle layer Spread of cheese in a pizza, either
deep layer or thick crust.
It consists of dispersed knowledge of
auditing, internal controls, risk
assessment and fraud detection
The toppings Various choice of toppings-Paneer,
baby corn, mushroom etc.
A basis understanding of the legal
environment to support litigations,
personal skills, common business sense
etc. More the toppings, finer the

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A perfect combination of the pizza base, cheese spread and good toppings makes the pizza delicious
and Forensic accountant perfect.
3. What does a Forensic Accountant do?
A Forensic Accountant is often retained to analyze, interpret, summarize and present complex financial
and business related issues in a manner, which is both understandable and properly supported. He is
trained to look beyond numbers and deal with the business realities of the situation.
A Forensic Accountant is often involved in the following:
· Investigating and analyzing financial evidence;
· Developing computerized applications to assist in the analysis and presentation of financial
evidence;
· Communicating their findings in the form of reports, exhibits and collections of documents; and
· Assisting in legal proceedings, including testifying in court as an expert witness and preparing
visual aids to support trial evidence.
As mentioned earlier a Forensic Accountant can be of assistance is two ways:
Investigative Accounting
· Review of the factual situation and provision of suggestions regarding possible courses of action.
· Assistance with the protection and recovery of assets.
· Co-ordination of other experts, including:
o Private investigators;
o Forensic document examiners;
o Consulting engineers.
· Assistance with the recovery of assets by way of civil action or criminal prosecution.
Litigation Support
· Assistance in obtaining documentation necessary to support or refute a claim.
· Review of the relevant documentation to form an initial assessment of the case and identify
areas of loss.
· Assistance with Examination for Discovery including the formulation of questions to be asked
regarding the financial evidence.
· Attendance at the Examination for Discovery to review the testimony; assist with understanding
the financial issues and to formulate additional questions to be asked.
· Review of the opposing expert's damages report and reporting on both the strengths and
weaknesses of the positions taken.
· Assistance with settlement discussions and negotiations.
Attendance at trial to hear the testimony of the opposing expert and to provide assistance with cross-
examination.
4. What types of assignments does a Forensic Accountant perform?
Forensic Accountants become involved in a wide range of investigations, spanning many different
industries. The practical and in-depth analysis that a Forensic Accountant will bring to a case helps
uncover trends that bring to light the relevant issues. Forensic accountants are trained to look beyond
numbers and deal with the business like situation.
Forensic accountants are also increasingly playing more 'proactive' risk reduction roles by designing and
performing extended procedures as part of the statutory audit, acting as advisors to audit committees,
and assisting in investment analyst research.
Detailed below are various areas in which a Forensic Accountant will often become involved.
I. Professional negligence: Forensic accountants also take up cases relating to professional
negligence. Whenever there is a breach of generally accepted accounting standards (GAAS)
or auditing practices or ethical codes of any profession, forensic accountants are required to
quantify the loss resulting from such professional negligence or deficiency in service.
II. Detection of fraud by employees: This often involves procedures to determine the existence,
nature and extent of fraud or embezzlement and may concern the identification of a
perpetrator. These investigations often entail interviews of personnel who had access to the funds
and a detailed review of the documentary evidence.

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I. Criminal investigation: Where the matter under investigation involves financial implications, the
investigation department, law society, and etc avail of the services of a forensic accountant.
The report of an accountant is very much useful in preparing and presenting evidence.
II. Personal Injury Claims / Motor Vehicle Accidents: A Forensic Accountant is often asked to
quantify the economic losses resulting from a motor vehicle accident. A Forensic Accountant
needs to be familiar with the legislation in place, which pertains to motor vehicle accidents.
Cases of medical malpractice and wrongful dismissal often involve similar issues in calculating
the resulting economic damages.
III. Business economic losses: Examples of assignments involving business economic losses include;
contract disputes, construction claims, product liability claims, trademark and patent
infringements and losses stemming from a breach of a non-competition agreement.
Other areas include:
IV. Shareholders' and Partnership Disputes
V. Other Types of Insurance Claims
VI. Matrimonial Disputes
VII. Mediation and Arbitration
In the nutshell, the following services can be provided by a forensic accountant: quantifying the
impact of lost earnings, such as construction delays, stolen trade secrets, insurance disputes,
damage/loss estimates, malpractice claims, employee theft, loss of profits, financial solvency reports,
disturbance damages, loss of goodwill, compensable losses suffered in expropriation determination,
assessment of the potential business compensation costs, and consultation on business defalcation
minimization.
5. What is a typical approach to Forensic Accounting assignment?
Each forensic accounting assignment is unique. Accordingly, the actual approach adopted and the
procedures performed will be specific to it. However, in general, many Forensic Accounting
assignments will include the steps detailed below.
I. Meet the client: To understand the important facts and issues.
II. Perform a conflict check: This should be carried out as soon as relevant parties are established.
III. Perform an initial investigation: prior to detailed plan of action for better planning of the
investigation.
IV. Develop an action plan: based on the meeting and investigation and set the objectives to be
achieved.
V. Obtain the relevant evidence: depending on the nature of the case documents, assets,
persons, proof of the occurrence of the event.
VI. Perform the analysis: includes regression and sensitivity analysis, calculating economic dangers,
perform tracing of assets, use computerized applications etc.
VII. Prepare the report: giving out clear exceptions, scope of assignment, approach, limitations to
scope, findings and/or opinions
6. Who retains a Forensic accountant?
The following groups often retain forensic Accountants:
· Lawyers;
· Police Forces;
· Insurance Companies;
· Government Regulatory Bodies and Agencies;
· Banks;
· Courts; and
· Business Community.
7. What characteristics/skills should Forensic Accountant posses?
A forensic accountant is expected to be a specialist in accounting and financial systems. Yet, as
companies continue to grow in size and complexity, uncovering fraud requires a forensic accountant
to become proficient in an ever-increasing number of professional skills and competencies.
The major skills can be divided in to two:
I. Core skills (specialized skills and knowledge).
II. Non-core skills (personal skills).

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I. Core skills:
· Ability to critically analyze financial statements. Theses skills help Forensic Accountants to
uncover abnormal patterns in accounting information and recognize their source.
· Ability to grasp internal control systems of the client and to set up a system that achieves
management objectives informs employees of their control responsibility and monitors the
quality of program and changes made to them.
· Proficiency in Information technology and computer network systems. These skills assist
accountants to conduct investigations in the "E-Areas" (E-banking, Ecommerce etc) and
computerized accounting systems.
· Knowledge of psychology in order to understand the thinking and motive behind criminal
behavior and to set up prevention programmes that motivate and encourage employees.
· An in-depth understating of the fraud schemes such as misappropriations, money laundering,
bribery and corruption.
· Thorough insight and knowledge into company's governance policies and laws that regulate
these policies.
· Interpersonal and communication skills, which aid in acquiring information about the
companies ethical policies and assist forensic accountants to conduct interviews and obtain
crucially needed information.
· Command of criminal and civil laws, legal system and court procedures.
II. Non-core skills: includes, but are not limited to
· Sound professional judgment.
· Look beyond numbers and grasp substance of situation.
· A "sixth" sense that can be used to reconstruct details of past accounting transactions is also
beneficial.
· A photographic memory that helps when trying to visualize and reconstruct these past events.
· Curiosity, persistence and creativity.
· Pay attention to smallest of detail, observe and listen carefully
· Ability to maintain his composure when detailing these events on the witness stand.
In addition to personal characteristics accountants needs other requirement i.e. a professional
qualification or a certificate, acknowledging his competence. One can learn forensic accounting by
obtaining a diploma given by Association of Certified Fraud Examiners (ACFE) in the US. Indian chapter
of ACFE offers the course based on the white-collared crimes prevalent in US, based on their laws.
However, there is no formal body that provides formal education of the frauds in India.
8. What is the presence of Forensic Accounting in India?
As mentioned above Indian chapter of Association of Certified Fraud Examiners (ACFE) offers courses in
India but they are based on laws prevalent in US. Other than this Indiaforensic is the only formal body
that provides formal education about forensic accounting in India. Indiaforensic is however not
affiliated to any of the Universities. Indiaforensic offers three types of programs:
· Certified Forensic Accounting Program - CFAP
· Certified Bank Forensic Accounting - CBFA
· Certified Anti-Money Laundering Expert - CAME
In India Serious Fraud Investigation Office (SFIO) is the landmark in creation of Forensic Accountants.
SFIO is the dedicated division of the Department of Company affairs, which looks into the frauds that
involves the violations of multiple laws such as Income Tax, FEMA and RBI Act etc. SFIO recognize CFE
as the designation for the purpose of employment and empanelment.
Other than SFIO there are few more agencies that are dedicated to combating frauds in India such as
Central Bureau of Investigation (CBI), Central Vigilance Commission (CVC). CBI has specialized wing to
deal with financial frauds called as Economic offences wing. CVC handles the crucial part of the
occupational frauds ie. Corruption. It also helps in resolving the bank fraud cases.
9. Why Chartered Accountants should enter in to Forensic Accounting?
Growing cyber crimes, failure of regulators to track the security scams, series of cooperative banks
bursting - all are pinpointing the need of forensic accounting, irrespective of whether we understand
the need or not. In the Indian context the Forensic Accountants are the most required in the wake of
the growing frauds. The law enforcement officers are the experts of analyzing the fingerprints and the
Narcotics but what about the digital evidence analysis. Very few know about it

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· Maurice E. Peloubet who coined the term Forensic Accountant in 1946 said that the
preparation of financial statements has some but not all of the characteristics of forensic
accounting.
· This statement is enough for the chartered accountants in India to foray in this field. It is new
child on the block. Both CBI and CID cops do the forensic accounting work.
· The growing number of regulator and the administrative agencies will demand the services in
the nature of forensic practice.
· Chartered Accountants are going to find themselves more involved in what is essentially a type
of forensic practice.
· The changing nature of the Accounting and Auditing & assurance standards also confirms this.
· Nearly 40 percent of the top 100 American accounting firms are expanding their forensics and
fraud services, according to Accounting Today. If this data is of some sense to Indian scenario
then the day is not far away when forensic practice will contribute to the total revenue of the
Indian CA firm.
10. Forensic Accountant: Recognition in Indian Law
Forensic Accounting is a rapidly growing area of accounting concerned with the detection and
prevention of financial fraud and white-collar criminal activities. George A. Manning in his book
"Financial Investigation and Forensic Accounting" defines Forensic Accounting as the science of
gathering and presenting financial information in a form that will be accepted by a court of
jurisprudence against perpetrators of economic crimes. The integration of accounting, auditing and
investigative skills yields the specialty known as Forensic Accounting which focuses very closely on
detecting or preventing accounting fraud. "Forensic", according to the Webster's Dictionary means,
"Belonging to, used in or suitable to courts of judicature or to public discussion and debate." The word
accounting is defined as "a system of recording and summarizing business and financial transactions
and analyzing, verifying, and recording the results." the term 'forensic accounting' refers to financial
fraud investigation which includes the analysis of accounting records to prove or disprove financial
fraud and serving as an expert witness in Court to prove or disprove the same. Thus, basically, the
forensic accounting is the use of accounting for legal purposes.
Forensic Accounting implementation in India
However in India, this branch of accounting has not got its due recognition even after alarming
increase in the complex financial crimes and lack of adequately trained professionals to investigate
and report on the complex financial crimes. The task of Forensic Accountants is handled by Chartered
Accountants who apart from handling traditional practice of auditing under the Companies Act, 1956
or Income Tax Act are called upon by the law enforcement agencies or the companies or private
individuals to assist in investigating the financial crime or scam. The CA or CWAs in India are best suited
for this profession due to their financial acumen acquired during their rigorous training which can be
further honed by introducing post qualification degree or diploma in Investigating and Forensic
Accounting similar to one introduced by CICA. The CA or CWA who acquire post qualification in
Investigative & Forensic Accounting can use the designation CA-IFA or CWA-IFA and be legally
recognized as the Forensic Accounting Expert to handle the investigation of financial crimes and give
expert testimony in the Court of Law. However, no efforts has so far been made by the ICAI and ICWAI,
the two leading statutory accounting professional bodies to move in this direction ans set up a institute
which can offer the post qualification diploma in Investigative and Forensic Accounting to its members.
However, growing financial fraud cases, recent stock market scams, failure of non financial banking
companies, phenomena of vanishing companies and plantation companies and failure of the
regulatory mechanism to curb it has forced the Government of India to form Serious Fraud Investigation
Officer (SFIO) under the Ministry of Corporate Affairs which can be regarded the first step of
Government of India to recognize the importance and advance the profession of forensic
accountants. The SFIO is a multidisciplinary organization having experts from financial sector, capital
market, accountancy, forensic audit, taxation, law, information technology, company law, customs
and investigation. These experts have been taken from various organizations like Banks, Securities &
Exchange Board of India, Comptroller and Auditor General and concerned organizations and
departments of the Government. However, the main law enforcement agency involved directly in
combating white-collar crimes Is the Police, CBI, DRI etc. there is a total lack on the part of these law
enforcement agencies to train their investigators in this specialized part of investigating white-collar
crimes involving forensic accounting. The investigation of the major financial crimes is handled by
ordinary investigating officer who after spending sometime in investigation of conventional crimes are
shunted to the economic offence wing and they are expected to handle the financial crime cases

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involving complex and intricate records which is required to be analyzed to unearth crime or unique MO
adopted by white-collar criminal. The result is obvious, the case dies its natural death and the criminals
roam free as the IO given his lack of specialized knowledge & qualification fails to properly investigate
the financial crime to its logical conclusion. On the other hand if we look at the western countries
particularly USA, the law enforcement agencies like DEA, FBI, CIA has well marshaled its pool of special
agents having forensic accounting backgrounds that are the backbone of the bureau’s financial crimes
and terrorism financing units and investigate with professional acumen, the complex financial crime like
money laundering, internet crimes, financial institution fraud and economic crimes. Today, there are
more than 600 FBI agents with accounting backgrounds. Thus, it is highly imperative on the part of law
enforcement agencies in India that they follow suit and engage specialist forensic accountant on its roll
whose engagements relating to criminal matters typically arise in the aftermath of financial fraud.
The Indian Law which refers to Forensic Accounting:
1) The Companies Act, 1956:
a) Section 235 and 237: There are provisions in Companies Act (Section 235 and 237) which
empowers the Central Government to inspect the books of accounts of a company, to direct
special audit, to order investigation into the affairs of a company and to launch prosecution for
violation of the Companies Act, 1956. Books of accounts and other documents of the companies
are inspected by the officers of the Directorate of Inspection and Investigation and the Registrar
of Companies. These inspections are designed to find out whether the companies conduct their
affairs in accordance with the provisions of the Companies Act, 1956 to see whether any unfair
practices prejudicial to the public interest are being resorted to by any company or a group of
companies and to examine whether there is any mismanagement which may adversely affect
any interest of the shareholders, creditors, employees and others. Whether inspection reports
disclosure any information that may be of interest to other Departments or agencies like the
Ministry of Commerce and Industry, Central Board of Direct Taxes, Enforcement Directorate,
State Government or Provident Fund Authorities, such information is passed on to them. If an
inspection discloses a prima facie case of fraud or cheating, action is initiated under provisions
of the Companies Act, 1956 or the same is referred to the Central Bureau of Investigation.
b) Provisions of Sick Industrial Companies Act incorporated into the Companies Act, 1956: The
Section 424A(5) of the Companies Act, 1956 empowers National Company Law Tribunal (NCLT)
to examine as preliminary issue whether the company is a sick industrial company u/s. 2(46AA).
Thus even before examining the viability of the scheme of revival proposed by the company,
NCLT can check the genuineness of the reference made to it. Thus, inquiry by operating agency
will only be to enable NCLT to decide the viability of the scheme and to assess whether the
company has the ability to revive on its own. Further, Section 424B of the Companies Act, 1956
empowers the tribunal to make such inquiry as it may deem fit for determining whether any
industrial company has become sick industrial company. Further, the Tribunal may, if it deems
necessary or expedient so to do for the expeditious disposal of an inquiry, require by order any
operating agency to enquire into the scheme for revival and make a report with respect to such
matter as may be specified in the order. Operating agency is group of experts consisting of
persons having special knowledge in banking and industry in which sick industrial company is
engaged and includes public financial institution, State level institution, scheduled bank or any
other person as may be specified by general or special order as its agency by the Board. Thus,
Forensic Accountant can be part of operating agency and investigate whether with reference
made by the company is genuine or the accounts are manipulated or fabricated to suit the
scheme of reference made to NCLT to declare it as sick company and thereby siphon public
funds.
2) SEBI Act, 1992:
The share market is highly volatile and the brokers indulge into various unfair and fraudulent trade
practices like synchronized share trading, manipulate and fabricate the books of accounts and
cheat the gullible investors. Regulation 11 C of the SEBI Act, 1992 empowers the SEBI to direct any
person to investigate the affairs of intermediaries or brokers associated with the securities market
whose transactions in securities are being dealt with in a manner detrimental to the investors or the
securities market. Thus fraudulent and unfair trade practices of the brokers or market intermediaries
are investigated by the investigator appointed by SEBI which requires the broker or market
intermediary to furnish information, books of accounts, registers, documents or records etc. which is
analyzed by the investigator to find out any manipulation, fraudulent practice or otherwise of the
broker. Thus, Forensic Accountant can play a lead role in assisting the SEBI to unearth the complex
share related frauds perpetrated by the brokers.

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3) The Insurance Act, 1938:
Section 33 of the said Act empowers the IRDA to direct any person (‘Investigating Authority’) to
investigate the affairs of any insurer. The investigating authority may seek assistance of the auditor
(or actuary or both) who shall be the Chartered Accountant within the meaning of Chartered
Accountant Act, 1949 for the purpose of assisting him in any investigation. The books of account,
registers and other documents are taken by the investigating authority in its custody to analyze it to
find out the manipulations or fabrication in the books of accounts. Thus, Chartered Accountants
plays a front role as an Forensic Accountant and aid in the investigation conducted into the affairs
of the insurer as per the provisions of Insurance Act, 1938.
4) The Prevention of Money-Laundering Act, 2002:
Section 3 of the Prevention of Money Laundering Act, 2002 defines the offence of money
laundering as involvement of a person in any process or activity connected with the proceeds of
crime and projecting it as untainted property. The three important stages in the money laundering
process are:
· Placement: Physical disposal of cash acquired from illegal sources by depositing the cash in
domestic banks or other kinds of financial institutions.
· Layering: Working through complex layers of financial transactions to distance the illicit
proceeds from their source and disguise the audit trail.
· Integration: Making the wealth derived from crime appears legitimate.
Forensic Accountant can often be involved in the following antimony laundering activities:
· Investigating and analyzing financial evidence to establish a suspicious transaction;
· Developing computerized applications to assist in the analysis and presentation of financial
evidence;
· Communicating their findings in the form of reports, exhibits and collections of documents that
assist the banks in submission of the suspicious transaction report to the regulator; and
· Assisting in legal proceedings, including testifying in court as an expert witness and preparing
visual aids to support trial evidence.
5) The Companies (Auditor’s Report) Order, 2003:
CARO, 2003 requires the auditor to report to the effect that if a substantial part of fixed assets have
been disposed off during the year, whether it has affected the going concern status. In order to
carry out the duties, the auditor has to draw a corollary and reference to the section 293 of
Companies Act, 1956, AS 24 (‘Discontinuing Operations’) and to AAS 16 (Going Concern) and
thereafter make his observations on this matter. It also requires the auditor to report on Frauds.
11. Significance of forensic accounting and Scams in India
Forensic accounting in India has come to limelight only recently due to rapid increase in white-collar
crimes and the belief that our law enforcement agencies do not have sufficient expertise or the time
needed to uncover frauds. It is being used in banks, insurance companies and even Police Agencies
(Preethi Singh, 2012). But India has witnessed hundreds of scams since independence. Some of the
scams worth mentioning here are – Haridas Mundhra (1957), Nagarwala (1971), Antulay and Cement
(1982), Bofors (1989), Harshad Mehta (1992), Palmolein Oil Imports in Kerala (1992), Telgi (1995), SNC
Lavalin in Kerala (1995), Sukhram and Telecom (1996), Fodder in Bihar (1996), Jain Hawala (1997), Ketan
Parekh (2001), the Barak Missile (2001), Kargil Coffins (2002), the Taj Corridor (2003), the PDS scam in
Arunachal (2004), Oil for Food (2005), Scorpene Submarine Deal (2006), Stamp Papers (2005), Cash for
Votes (2008), Satyam (2008), Madhu Koda and Mining (2009), 2-G (2010), Commonwealth Games
(2010), Adarsh Housing Society (2010), Housing loans by Banking and Financial Institutions (2010), Belekiri
Port in Karnataka (2010), Foodgrains in Uttar Pradesh (2010) and Bellary Mines (2011) (Debroy &
Bhandary).
For the purpose of the study, seven alleged scams were selected which are political, financial,
corporate etc. Entries are arranged in chronological order by year. The year is the one in which the
alleged scam was first reported or came into knowledge of public.

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Scandal Year
reported
Scope Key Players Summary
Stamp
Paper
scam
2005 Rs.600
billion
Abdul Karim Telgi & his
associates,Police officers,
Govt employees &
politicians
Counterfeiting of stamp papers. Selling fake to bulk
purchasers like banks, insurance companies & stock
broking firms. Sentenced to 30 years of rigorous
imprisonment.
Satyam
Scam
2009 Rs.14000
crore
Ramalinga Raju & his
family, CFO & other top
level management,
Auditors & Board of
Directors
Inflated figures of cash & bank balance, operating
profit artificially boosted from 61 crores to 649 crores,
fictitious names of employees
2G
Spectrum
2010 Rs. 1760
billion
A Raja, MK Kanimozhi,
Nira Radia, Many
Telecom Cos.
Irregularities in awarding spectrum licences. License
issued on first cum first serve basis instead of auction.
Advancing of cutoff date which is illegal.
Common
-wealth
games
2010 Rs.
35000
crores
Suresh Kalmadi & other
organizing committee
members, 2 private
companies & Govt
officials
Allegations of corruptions and mismanagement by the
organizing committee, delay in the construction of main
venue leading to misuse of funds, infrastructural
compromise, hefty payments made in the name of non-
existing parties
Adarsh
Housing
Society
scam
2010 Not
known
yet
Top Army officials, IAS
officers, politicians &
legislators
Originally meant to be a six-storey structure to house
Kargil war heroes and widows, got converted into a 31-
storey and allotted to bureaucrats, top defence
officers, a former environment minister and legislators.
The market rate was 6-8.5 crores & was allotted at a
throw away price of 60-85 lakhs. Violations in
environment rules.
12. Conclusion
A large global accounting firm believes the market is sufficiently large to support independent unit
devoted strictly to 'forensic' accounting’. All of the larger accounting firms, as well as, many medium-
sized and boutique firms have recently created forensic accounting departments.
Because forensic accounting is relatively a new area of study, a series of working definitions and
sharing of corporate experiences should be undertaken and encouraged to ensure a common
understanding. Indeed, there is great future in forensic accounting as a separate "niche" consulting.
While the forensic accounting and auditing practice had commenced in the US as early as 1995, the
seed of this specialization has yet to take off in India. Forensic accountants are only dealing with
financial implications of the cases entrusted to them and not engaging in auditing exercise. On
account of global competition, the accounting profession must convince the marketplace that it has
the "best-equipped" professionals to perform such services.
While majority of CAs have excellent analytical skills, they need to acknowledge that 'forensic' services
require 'specialized' training as well as real-life 'practical' corporate experience.
Thanks and Regards
CA. Sanjay K Ruia – 9322593264 / sanjayruia.ca@gmail.com
CA. Susil K Gupta – 9819588162 / casusilgupta@gmail.com
Koparkhairane Office:
1A, Ramchandra Niwas, Plot No. 21-22, Sector-12A, Koparkhairane, Navi Mumbai – 400709.
Vashi Office:
B-3/1/1:3, Sector-2, Xerox Lane, Vashi, Navi Mumbai – 400703.