An Assessment of Forensic Accounting Skill Competencies for Minimizing Corporate Fraud and Damages: Empirical Evidence From Chartered Accountancy Students of India

Introduction

Forensic accounting integrates the accounting, auditing, and investigative techniques, procedures, and skills all around the world to identify, detect and investigate financial reporting frauds (Bhasin, 2013) especially in the corporate world wherein ‘Forensic Accounting’ is considered a catalyst for smoothing, strengthening, enhancing and overall uplifting the corporate world of any nation. Forensic Accounting is the study and interpretation of accounting evidence. It examines individual and company financial records as an investigative measure that attempts to derive evidence suitable for use in litigation. In the times of recent financial and cyber frauds in the corporate sector, there is an intense need for expertise in this emerging field of study, especially in the Indian context. The ‘Institute of Chartered Accountancy of India’ which is the prime institution of accountancy study in India has recognized this need and has started offering various specialized certificate courses in ‘Forensic Accounting. There is also a scarcity or rather a deficiency of professional forensic accountants in a country like India (Gupta & Viz, 2021) where a large pool of students of accounting, auditing, finance, and corporate law are available. For the result-oriented application and efficient practice of ‘Forensic Accounting’ diverse skill competencies are required and these need to be addressed and assessed from the point of view of professional chartered accountancy students opting for ‘Forensic Accounting’ as a career option and that too in the corporate sector of India. These students are already ‘Commerce Graduates’ and are on a verge of securing membership in ‘Institute of Chartered Accountancy of India’ and many of them are undergoing their training or internship under-qualified and practicing ‘Chartered Accountants’.

In accordance with the fundamental objective of this research study, there is also an intense need for the development of a specialized youth and talented pool in the field of forensic accounting embedded with resourceful competencies. Hence, this study intends to answer the research questions as:

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  What are the fundamental skill competencies required for an emerging efficient and effective ‘Forensic Accountant’?

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  What are the exact resourceful competencies in the Indian context which consequently support minimizing the frauds and scams in the corporate world?

Hence, the above research questions lead to the specific research objective of this chapter as to extract the specific and resourceful skill competencies required by the proficient ‘Forensic Accountant’ for enhancing the ‘Corporate Sector’. For the accomplishment of said objective, the author has explored a total of twenty key skill competencies required for ‘Forensic Accounting’ (Sources) in general, and a survey has been conducted to collect the primary data which is subjected to the ‘Component Extraction Method’ applied through SPSS. The subsequent sections of this chapter portray the “Background of the study majorly stressing on the ‘Literature Review’”, “Main focus of the chapter emphasizing ‘Research Methodology’ used in this study”, “Solutions and Recommendations depicting the ‘Results of SPSS with its interpretation’”, “Future Research Directions with specific limitations” and finally ended up with concrete “Conclusion of the entire study”.

Background Of The Study (Literature Review)

A brief background with the relevant literature review of the past ten years regarding the theme of the study has been presented by the author in this section.

Kumar (2012) explained that the task performed by forensic accountants was handled either by ‘Chartered Accountants’ or by ‘Cost or Work Accountants’ in India and there was an urgent need for forensic accounting services due to an increase in the number of frauds continuously as various law enforcement agencies of India did not have sufficient expertise required to prevent from these frauds. This study supported the need for skilled ‘Forensic Accountants’ in India.