Forensic Accounting: A Novel Paradigm and Relevant Knowledge in Fraud Detection and Prevention

Afriyie, Stephen Owusu; Akomeah, Michael Owusu; Amoakohene, Gertrude; Ampimah, Benjamin Chris; Ocloo, Chosniel Elikem; Kyei, Michael Owusu

doi:10.1080/01900692.2021.2009855

Cited by 24 publications

(16 citation statements)

References 20 publications

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“…According to Kumar and Mohan [23] control effectiveness is not permanent, thus require regular review; management procedures are critical for identifying a long-term solution to accounting and corporate scandals caused by internal control breakdowns. Today, forensic auditors are concerned and devoted to designing stiffer standards to strengthen integrity and thwart fraudulent schemes [24], however, this comes at a cost to the public budget, and yet public organizations continue to record significant accounting irregularities yearly, implying the limited strength of formal control. According to one study, stringent controls are insufficient to stop new dimensions of fraud and corporate scandals; therefore, managers must decide whether the organization's control mechanisms are too misleading or simply a formality [25].…”

Section: Limitations Of Formal Controlsmentioning

confidence: 99%

“…Experts recommend automated control environment with continuous audit program to adequately handle the increasing demand for rapid fraud detection and risk assessment [20]. However, new findings show that, despite the use of advanced internal audit techniques, organizations are still unable to achieve full compliance due to time, resource, and budget constraints [24]. Internal control deficiencies have a significant impact on external auditors' reports since their judgements and opinions are significantly impacted by internal audit methods.…”

Section: Limitations Of Formal Controlsmentioning

confidence: 99%

“…The concept of control stipulates the gravity of liability if violated. The board of directors design the governance and risk management frameworks to embody internal control when discharging their oversight duties to guard against unethical practices [24]. Historical literature emphasised that internal control compliance has always been successful with the use of sanctions associated as a disincentive or deter unwanted and unethical corporate behavior.…”

Section: (E) Empowermentmentioning

confidence: 99%

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Recent advances in internal control: Soft control overcoming the limits of hard control

Lartey

Akolgo²,

Jaladi

et al. 2023

Front. Manage. Bus.

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Uncertainties and risks continue to pose a threat to governance and internal control, impeding public sector modernization and essential service delivery. Attempts to develop alternative strategies to meet desired results in highly bureaucratic institutional environments such as the public sector are intensifying because ideas and principles matter. This study advances informal "soft control" as a substitute for formal "hard control" in four dimensions: (a) creates a clear difference between "soft" and "hard" control; (b) designs key determinants of informal "soft" control; (c) limitations of formal "hard" control; and (d) a conceptual framework and hypotheses to support future empirical research and “operationalization” of the proposed constructs. Critical observations imply that the increasing cases of corporate malpractice and consequential non-alignments with best practises in recent times are sufficient evidence to suggest that formal control is incapable of mitigating financial crimes, irregularities, and preventing complex accounting scandals classified as white-collar fraud. The causes of these control failures are attributed to overreliance on "hard control" which primarily works with sanctions and the neglect of informal control mechanisms "soft controls". This condition has limited the ability of auditors to uncover systematic failures of controls that are process-specific, resulting in a partial and incomplete evaluation of internal controls. The study assumed a theoretical approach due to the lack of existing empirical research on “soft control”. However, this observations form a solid theoretical foundation for further discussions. We argue that "tone at the top," informal social control, organisational culture, ethical values, empowerment, and employee competence are effective substitutes for and complements to formal "hard" controls in preventing another Enron.

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Section: Limitations Of Formal Controlsmentioning

confidence: 99%

Section: Limitations Of Formal Controlsmentioning

confidence: 99%

Section: (E) Empowermentmentioning

confidence: 99%

See 1 more Smart Citation

Recent advances in internal control: Soft control overcoming the limits of hard control

Lartey

Akolgo²,

Jaladi

et al. 2023

Front. Manage. Bus.

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“…Forensic accountants at all levels acquire a dynamic skill set from the requisite knowledge. This enables them to explore, identify, and discover variable forms of fraud or irregularities (Afriyie et al, 2022;Akinbowale, 2018;Akinbowale et al, 2020). This study, therefore, addresses the viability of forensic accountants in combating financial statement fraud in Nigerian organizations.…”

Section: Introductionmentioning

confidence: 99%

“…The growing spates of corporate scandals (Chinyamunjiko, Makudza, & Mandongwe, 2022) placed a wider responsibility on the accounting function thereby requiring them to equip themselves with the necessary skills to identify acts of mismanagement, fraud and other wrongdoings (Okunbor & Obaretin, 2010). Typical examples of worldwide corporate scandals such as Enron, Worldcom, Global Crossing (USA); Parmalat (Italy); Union Dicon Salt, Cadbury (Nigeria); Anglo-leasing, and Golden berg (Kenya) have shown the failure of the traditional audit approach in the fight against fraud (Afriyie et al, 2022;Ogutu & Ngahu, 2016). This according to Chinyamunjiko et al (2022), is because their rate of proliferation has grown over the past few years.…”

Section: Introductionmentioning

confidence: 99%

An Exploration of the Viability of Forensic Accounting Techniques in Combating Financial Statement Fraud in Nigerian Organizations

Oranefo

Egbunike²

2021

amor

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Purpose: This study explored the viability of forensic accounting techniques in combating financial statement fraud in Nigerian organizations. The study specifically examined the relationship between forensic accounting techniques and fraud deterrence; and, the viability of forensic accounting techniques to enforce corporate policies and procedures. Research methodology: The study adopts the survey research design. The sampling frame comprised accounting lecturers and chartered accountants in two geographical locations of Anambra State. The study utilized non-probability sampling to mitigate non-response bias and to select knowledgeable respondents. The final retrieved questionnaires were fifty. The primary data were analyzed using Pearson correlation analysis. Results: The Pearson correlation results showed a positive association between forensic accounting techniques (FAT) and fraud deterrence. Secondly, there is a positive association between forensic accounting techniques and the enforcement of corporate policies. Limitations: The main limitation was the small sample size from the retrieved questionnaires future studies can therefore widen the sampling frame and explore other sectors. The study also spanned one of the South-eastern States limiting generalizability. Contribution: The study contributes to the literature in the context of developing countries, on the continuing viability of forensic accounting techniques (FAT) in detecting financial statement fraud in its various multifarious forms in such countries with weak institutional environments compared to developed countries. The study also adds to the literature on the viability of forensic accountants in enforcing corporate policies and procedures which is useful in an organizational research context. Keywords: 1. Fraud 2. Forensic Accounting Techniques 3. Fraud Detection 4. Fraud Prevention 5. Forensic Accounting

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An Overview of Forensic Accounting and Its Effectiveness in the Detection and Prevention of Fraud

Capraș,

Achim

2023

Contributions to Finance and Accounting

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Forensic Accounting: A Novel Paradigm and Relevant Knowledge in Fraud Detection and Prevention

Cited by 24 publications

References 20 publications

Recent advances in internal control: Soft control overcoming the limits of hard control

Recent advances in internal control: Soft control overcoming the limits of hard control

An Exploration of the Viability of Forensic Accounting Techniques in Combating Financial Statement Fraud in Nigerian Organizations

An Overview of Forensic Accounting and Its Effectiveness in the Detection and Prevention of Fraud

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