Integrating Corporate Governance and Forensic Accounting: A Study of an Asian Country.


Dr. Madan Lal Bhasin ,

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Volume 6 - January 2017 (01)


The accounting scandals during the last three decades have induced a crisis of confidence in financial reporting practices and effectiveness of corporate governance (CG) mechanisms. Indeed, Forensic Accounting (FA) integrates accounting, auditing and investigative skills to conduct investigations in variety of fraud cases. An increasing number of researchers are finding that „poor‟ CG is a leading factor in dismal performance, manipulated financial reports, and unhappy stakeholders. Some leading corporations and regulatory bodies, however, are trying their best efforts to analyze and correct the existing loopholes in the reporting system. Undoubtedly, qualified, trained and mature Chartered Forensic Accountants (CFA‟s) can prove to be a valuable asset to the corporate sector, and gradually help to improve their CG system. The CFA‟s, being professional member of the CG and Audit Committees, can play a far greater role in coordinating company efforts to achieve a cohesive policy of ethical behavior within an organization. By helping companies to detect and prevent fraud, create a „positive‟ work environment, establish „effective‟ lines of communication, and be vigilant as a corporate „watchdog‟, the CFA‟s role can gradually evolve into a key component in the CG system. In the 21st century, the Forensic Chartered Accountants (FCAs) are in great demand and “FA is listed among the top-20 careers of the future.” The fundamental objective of this study is to find out “how can we integrate the expertise of the Forensic Accounting (FA) to improve the overall corporate governance (CG) scenario prevalent in India?” Since very little research exists in this area, present research is exploratory in nature. This is a preliminary investigation of the necessary skills, educational and training requirements for CFA‟s to improve CG system. We surveyed academics, practicing fraud and forensic professionals in order determine the perceptions of the professional community. During 2011-12, a questionnaire-based survey was conducted in the National Capital Region of India using a sample size of 120 practicing chartered accountants, accounting academics, and potential users of FA services. In fact, this study is a „preliminary‟ investigation of the necessary skills, education and training requirements for the professional community. The results of this „exploratory‟ study, with few minor differences, indicate that potential practitioners, academics and users agree that “critical thinking, written & oral communication, legal knowledge, auditing skills, deductive analysis, investigative flexibility, analytical proficiency and unstructured problem-solving are the most important skills required for the CFAs.” Moreover, we found that all of the skills investigated in this study are „potentially‟ important for the CFAs, which the educators at the Universities should use as an overall guide while designing their FA curriculum.”


Forensic accounting, chartered forensic accountants, corporate governance, Asian country, financial reporting, regulatory bodies. 


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