Forensic Accounting and Reporting in India-Editted

FORENSIC ACCOUNTING AND REPORTING IN
INDIA
A PROJECT REPORT
Submitted by
MRIDU GARODIA
in partial fulfillment for the award of the degree of
BACHELOR IN COMMERCE (HONOURS)
ST. XAVIER’S COLLEGE (AUTONOMOUS)
UNDER UNIVERSITY OF CALCUTTA
MONTH & YEAR: APRIL, 2016
ROLL NUMBER: 1075
ROOM NUMBER: 37
Under the supervision of
PROFESSOR CHANDRANI DUTTA
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DECLARATION
I hereby declare that the Project Work titled “Forensic Accounting And Reporting In India- A
Perceptual Study Of The Finance Professionals On Issues Relating To It” submitted by me
to the St. Xavier’s College (Autonomous), affiliated to the University of Calcutta, in partial
fulfillment for the award of the Degree in Bachelor Of Commerce (Honours) is a record of
project work done by me during 2016 and that the project report has not formed the basis for the
award of any Degree, Diploma, Associateship, Fellowship or other similar title to me.
SIGNATURE
(MRIDU GARODIA)
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BONAFIDE CERTIFICATE
Certified that this project report titled “Forensic Accounting And Reporting In India- A
Perceptual Study Of The Finance Professionals On Issues Relating To It” is the Bonafide
record of independent project work of Mridu Garodia who carried out the project under my
supervision during 2016 and submitted to the Department of Commerce St. Xavier’s College
(Autonomous), affiliated to the University of Calcutta, in partial fulfillment for the award of the
Degree in Bachelor of Commerce (Honours).
Certified further, that to the best of my knowledge the work reported here in does not form part
of any other project report or dissertation or thesis on the basis of which a degree/diploma,
fellowship or any award was conferred on an earlier occasion on this or any other candidate.
ASSISTANT PROFESSOR
(PROFESSOR CHANDRANI DUTTA)
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ACKNOWLEDGEMENT
I acknowledge with gratitude my indebtedness to Professor Chandrani Dutta for giving me the
opportunity to work on this project and gave valuable guidance for preparing this project. I
would like to thank all those people who directly or indirectly helped me to enhance my practical
knowledge in the field of commerce and express my sincere gratitude to all those who shared
their valuable thoughts with me. This being my first effort, the possibilities of errors and
omissions in its contents and presentation cannot be completely ruled out. I shall, however, be
grateful to my professors, colleagues and other readers for their suggestions for its improvement.
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ABSTRACT
Forensic accounting is a rapidly growing area of accounting concerned with the detection and
prevention of financial fraud and white-collar criminal activities. Forensic accounting is the
specialty area of the accountancy profession which describes engagements that result from actual
or anticipated disputes or litigation. There are various types of frauds. Various scams have
occurred in India. A four stage model is being currently used for dealing with frauds- Fraud
Incident, Investigation, Resolution and Action. Both primary and secondary data have been used
for the research. Primary data has been collected using a questionnaire. This data has been
evaluated and analyzed using various tables, bar graphs and a statistical tool named Chi-square.
We have taken the level of significance at 5% and computed various values using two
demographic variables, that is, Qualification and Occupation. We find that, in general, the
different qualifications and occupations do not influence respondent’s opinion.
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TABLE OF CONTENTS
CHAPTER NO. TITLE PAGE NO.

Acknowledgement 4
Abstract 5
Table of Contents 6-7
1 INTRODUCTION
1.1 Introduction to Forensic Accounting 8-9
1.2 Literature Review 9-10
1.3 Objectives 11
1.4 Research Methodology 11
1.5 Plan of Action 11-12
1.6 Limitations of the Research 12
2 CONCEPT AND RELATED TERMS
2.1 What is Forensic Accounting? 13
2.2 History of Development of Forensic Accounting in 14
India
2.3 Nature of Forensic Accounting 14-15
2.4 Advantages and Disadvantages of Forensic 15-17
Accounting
2.5 Forensic Accountants-The Bloodhounds of Book- 17-18
keeping
2.6 What Characteristics or Skills should Forensic 18-20
Accountant Possess?
2.7 Role of Forensic Accountants 20-21
2.8 Role of Forensic Accountants under Indian Statute 21-23
3
3.1 Forensic Accounting in India- Implementation and 24-25
Progress
3.2 Types of Frauds 25-26
3.3 Scams in India 27-29
3.4 Dealing with Fraud- Current Model 29-30
3.5 Techniques of Forensic Accounting in India 31-32
4 Evaluation and Analysis of Collected Data
4.1 Data Evaluation and Analysis using Tables and
Graphs
4.1.1 Section 1:- Personal Details of the Respondents 33-37
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4.1.2 Section 2:- Choose Any One Option 38-42
4.1.3 Section 3:- Choose Multiple Options As Per 42-50
Question
4.1.4 Section 4:- Give Ranking 1, 2, 3 As Per Your 50-53
Preference of Options
4.2 Data Evaluation and Analysis using Chi-square
4.2.1 To Test Whether Qualification Influences 53-56
Respondent’s Decision or Not
4.2.2 To Test Whether Occupation Influences 56-58
Respondent’s Decision or Not
4.2.3 Findings 58
5 CONCLUSION 59
REFERENCES 60
ANNEXURE: QUESTIONNAIRE ON FORENSIC 61-64
ACCOUNTING
CHAPTER 1: INTRODUCTION
1.1 INTRODUCTION TO FORENSIC ACCOUNTING
Corporate fraud is on the rise in India, compelling more management to conduct forensic audits.
Experts on white-collar crimes say forensic accounting is not just gaining prominence, the
methods are changing fast. Unofficial estimates value the practice at Rs 400-500 crore annually
but it is believed this could double in the next three or four years. That’s not surprising given
how the incidence of corporate fraud is on the rise. Investigations and risk consulting firm Kroll
unearthed in a recent survey that 69% of companies studied were affected by fraud in FY13, up
from 68% in the previous year. The value of fraud, the study found, rose, to 71% from 67%.
Crimes are of all hues, seven in particular — theft of physical assets, theft of information,
corruption and bribery, internal financial fraud, vendor fraud, management conflict of interest
and regulatory breach. Insider fraud was particularly rife in India, with 89% of respondents
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indicating the perpetrator was an insider of some sort — a junior, middle management or senior
employee, or an agent. Which is why, as Rohit Mahajan, Deloitte Forensic (India) national leader
and senior director, points out, forensic audit practices have evolved significantly over the last
10-15 years? “Earlier the investigations were restricted to books and records but now there is a
significant element of intelligence gathering,” he explains. Mahajan adds that technology and
analytics have a greater play in every aspect of forensic accounting today, whether it’s market
intelligence or human resources (HR) intelligence. Not surprisingly, the financial sector finds
itself most vulnerable to fraud. As Sandeep Dhupia, head of KPMG’s forensic services in India,
explains, this is due to misuse of technology and despite the presence of a strong regulator. Data
released by the Reserve Bank of India (RBI) show that public sector banks lost money to the
tune of Rs 8,734 crore in the last three years on account of loans (personal, housing, corporate
and others) that were disbursed against fake documents. The amount was nearly four times
higher than that in 2010 of Rs 1,202 crore. But other spaces too are exposed to fraud, which is
why the scope of forensic auditing is getting wider. What’s more, chartered accountants, MBAs
and lawyers are no longer solely relied upon. While they do form the core part of forensic
accounting, there is now a need for financial research analysts, engineers, journalists, artists and
even former law enforcement officials. As experts point out, fraud related to a toll road or
competitive bidding would call for the services of a professional with insights into the
infrastructure industry while a white-collar crime in financial services and issues related to
stressed assets or anti-money laundering would require an understanding of the working of banks
and financial intermediaries. The nature of crimes is complicated and issues such as conflicts of
interests, code-of-conduct violations and regulatory non-compliance require a strong working
knowledge of the sector. More companies are waking up to the fact that corporate offences can’t
be wished away. Indeed, the Kroll report showed India was well above the average when it came
to most crimes. Theft of physical assets — 33% of companies were affected versus 28% for the
survey as a whole, and corruption — 24% compared with 14%. India also beat the average on
internal financial fraud — 22% against 16% — and had an above- average incidence of
information theft — 24% compared with 22%. “Indian companies were aware they operated in a
high-corruption environment... Companies need to avoid accepting that fraud is just a normal
part of business,” Kroll observed. But there are other reasons why demand may be rising.
Provisions of the new Companies Act mean that every company now has to have proactive fraud
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risk management policies. The Act requires independent directors to increase safeguards against
fraud and reminds them of their whistle blowing responsibilities. Objections must be
documented, and now that the Act defines fraud and safeguards explicitly, ignorance of the
parameters of either will no longer be a defense.
1.2 LITERATURE REVIEW

 A Model and Literature Review of Professional Skepticism in Auditing by Mark W.
Nelson (2009) - This paper reviews research that examines professional skepticism
(hereafter, PS) in auditing. Consistent with much research and with recent regulatory
concerns, the paper defines PS as “indicated by auditor judgments and decisions that
reflect a heightened assessment of the risk that an assertion is incorrect, conditional on
the information available to the auditor.”
The paper provides a model that describes how audit evidence combines with auditor
knowledge, traits, and incentives to produce judgments that reflect PS. The model also
describes how, given a judgment that reflects some level of PS, the judgment combines
with auditor knowledge, traits, and incentives to produce actions that reflect relatively
more or less PS. The model highlights that auditor’s pre-existing knowledge, traits, and
incentives all combine (and potentially trade off or interact) to affect the amount of PS in
audit judgment and audit actions. This perspective also facilitates understanding how
audit firms can influence PS in practice via hiring, training, performance appraisal,
review, decision aids, incentives, and changes in tasks and institutions.
 Accounting education literature review (2003–2005) - This review of accounting
education literature includes 223 articles published over a three-year period, 2003–2005,
in five journals: Journal of Accounting Education, Issues in Accounting
Education, Accounting Education: An International Journal, Advances in Accounting
Education, and Global Perspectives on Accounting Education. The purpose of this paper
is to organize and summarize these most recent additions to the accounting education
literature. These reviews are categorized into five sections corresponding to traditional
lines of inquiry (assessment, curriculum and instruction, educational technology, faculty
issues, and students) and are further divided by section when appropriate, with empirical
and descriptive articles separated in each section. At the end of each of the five major
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sections, suggestions for research are presented. In an Appendix, 58 additional articles
presenting teaching materials and cases published in the same five journals during 2003–
2005 are categorized by the courses for which they would be appropriate.
 Accounting education literature review (1991–1997) - This paper updates the work of
Rebele, Stout, and Hassell (A review of empirical research in accounting education:
1985–1991. Journal of Accounting Education, I, 167–231, 1991) and Rebele and Tiller
(Empirical research in accounting education: A review and evaluation. in A. C. Bishop,
E. K. St. Pierre and R. L. Benke (Eds), Research in Accounting Education, 1–54.
Harrisonburg, VA: Center for Research in Accounting Education, James Madison
University, 1996) by reviewing a subset of the accounting education literature published
during the period 1991–1997. Specifically, they review articles (both empirical and
nonempirical) related to the accounting curriculum and instructional approaches in
accounting that were published in the following journals: Journal of Accounting
Education, Issues in Accounting Education, The Accounting Educators' Journal,
and Accounting Education: A Journal of Theory, Practice and Research. A second paper,
Part II, will review articles published in these same journals during the period 1991–1997
on the topics of assessment, use of technology, students, faculty concerns, cases, and
instructional resources.
1.3 OBJECTIVES
The objectives of study are:
(a) To understand the technique of forensic accounting.
(b) To study the Indian law currently existing in India with respect to forensic accounting.
(c) To trace the need, importance and development of the Forensic Accounting in India in
light of the scams that have taken place.
(d) To evaluate, analyze and interpret the awareness of the finance professionals on issues
relating to forensic accounting in India.
1.4 RESEARCH METHODOLOGY

(a) Primary Data- Questionnaire was used for the purpose of primary data collection. The
Qualifications included in the sample were C.A., C.S. and students pursuing B.COM.
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Honours (Finance). The Occupations included in the sample were Practicing, Non-
practicing and Articleship/ Internship. Convenience sampling technique was used.
(b) Secondary Data- Secondary data were obtained from journals, websites and articles.
(c) Statistical Tool Used- Chi-Square.
1.5 PLAN OF ACTION

The project work can be classified in the following chapters-
(a) Chapter 1 Introduction includes Introduction to Forensic Accounting, Literature
Review, Objectives, Research methodology, Plan of Action and Limitations of the
Research.
(b) Chapter 2 Concept and Related Terms includes What is Forensic Accounting, History
of Development of Forensic Accounting in India, Nature of Forensic Accounting,
Advantages and Disadvantages of Forensic Accounting, Forensic Accountants- The
bloodhounds of book-keeping, What Characteristics or Skills should Forensic
Accountant Possess, Role of Forensic Accountants and Role of Forensic Accountants
under Indian Statute.
(c) Chapter 3 deals with of Forensic Accounting in India- Implementation and Progress,
Types of Frauds, Scams in India, Dealing with Fraud- Current Model and Techniques
of Forensic Accounting in India.
(d) Chapter 4 Evaluation and Analysis of Collected Data includes Data Evaluation and
Analysis using tables, graphs and statistical tool (chi-square).
(e) Chapter 5 is the conclusion that could be drawn from the research.
1.6 LIMITATIONS OF THE RESEARCH

(a) Sample size- The size of the sample used for this project research was 50. Statistical
tests normally require a larger sample size to ensure a representative distribution of
the population and to be considered representative of groups of people to whom
results would be generalized or transferred.
(b) Time constraint- The time available to investigate a research problem and to measure
change or stability over time was pretty much constrained.
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(c) Data could not be independently verified- Whether the data is collected primarily or
secondary data is used, the data is limited by the fact that it cannot be independently
verified. We need to accept whatever people say at interviews, questionnaires or
journals.
CHAPTER 2: CONCEPT AND RELATED TERMS
2.1 WHAT IS FORENSIC ACCOUNTING?
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.” And 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
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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 is a very important tool to detect,
investigate and prevent the frauds. Whether it is stock market fraud or bank fraud or cyber fraud;
forensic accounting has become an indispensable tool for investigation. With India being ranked
as the 88th most corrupt nation, the needs for forensic accountants become all the more profound.
The term ‘Forensic Investigation’ refers to the utilization of specialized investigative skills in
carrying out an enquiry conducted in such a manner that the outcome will have application to a
court of law. A Forensic Investigation may be grounded in accounting, medicine, engineering or
some other discipline. The term ‘Forensic Audit’ refers to an examination of evidence regarding
an assertion to determine its correspondence to establish criteria carried out in a manner suitable
to the court. An example would be a Forensic Audit of sales records to determine the quantum of
rent owing under a lease agreement, which is the subject of litigation.
2.2 HISTORY OF DEVELOPMENT OF FORENSIC

ACCOUNTING IN INDIA
Worldwide we consider Sherlock Holmes to be the first Forensic accountant; however the
contribution of some of the historic characters in India cannot be ignored. In India Kautilya was
the first person to mention the famous forty ways of embezzlement in his famous Kautilya
Arthashastra during the ancient Mauryan Times. The research is triggered in India with a great
speed and Pradeep Akkunoor pioneers the topic and has done a good research about the
contribution of Kautilya in Forensic accounting. Pradeep who heads Journal of Forensic
accounting in India have called Kautilya back in to the 21st Century and have started the series
of conversations between the computer and Kautilya.
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. Gem of Indian Fraud Examiners, Chetan Dalal can be credited with actually
applying the stories of the Birbal to the Investigation of the frauds. In various articles published
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in BCAS Journal he has explained how Birbal’s trap and Birbal’s Litmus test approaches are
significantly used while investigating the accounting frauds.
2.3 NATURE OF FORENSIC ACCOUNTING
Forensic accounting is the specialty area of the accountancy profession which describes
engagements that result from actual or anticipated disputes or litigation. ‘Forensic’ means
‘suitable for use in a court of law’ and it is to that standard and potential outcome that forensic
accountants generally have to work (Crumbley et al. 2005). It is often said ‘accountants look at
the numbers but Forensic accountants look behind the numbers (Okoye 2009). Forensic
accountants are trained to look beyond the numbers and deal with the business realities of the
situation. Analysis, interpretation, summarization and presentation of complex financial and
business related issues are prominent features of the profession (Bhasin 2007). The services
provided by Forensic Accountants are as follows:
 Business valuations.
 Divorce proceedings and matrimonial disputes.
 Personal injury and fatal accident claims.
 Professional negligence.
 Insurance claim’s evaluations.
 Arbitration.
 Partnership and corporation disputes.
 Shareholder disputes (minority shareholders claiming).
 Civil and criminal actions concerning fraud and financial irregularities- cross
examination, formulate questions.
 Fraud and white-collar crime investigations.
2.4 ADVANTAGES AND DISADVANTAGES OF FORENSIC

ACCOUNTING
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(A) ADVANTAGES OF FORENSIC ACCOUNTING:-
 Fraud Identification and Prevention- Fraud is quite common in big organizations where
the number of daily financial transactions is huge. In such an environment, an employee
can easily undertake fraudulent activities without being caught, forensic accounting helps
in analyzing whether the company’s accounting policies are followed or not, and whether
all the transactions are clearly stated in the books of accounts. Any deviation observed in
the books of accounts can help in identifying fraud, and necessary measures can be taken
to prevent it in the future.
 Making Sound Investment Decisions- As forensic accounting helps in analyzing the
financial standing and weaknesses of a business, it provides a path for investors to make
thoughtful investment decisions. A company dealing with fraud is definitely not a good
option for investment. Therefore, the reports of forensic accountants act as a guide for
potential investors of a company. Many organizations also apply for loans from various
financial institutions. By performing an analysis, such institutions can come to a decision
on whether they would like to fund a company or not.
 Formulation of Economic Policies- various cases of fraud that becomes evident after
forensic analysis act as a reference for the government to formulate improved economic
policies that would be able to curb such fraudulent activities in the future. By doing so,
the government can strengthen the economy and prevent such illegal activities in the
country.
 Rewarding Career Opportunity- As a career, forensic accounting is extremely rewarding,
as it not only involves regular accounting activities, but also involves identification,
analysis, and reporting of the findings during an audit. The acceptance of reports
generated by a forensic accountant by the court of law, gives them an upper hand as
compared to other accountants. Good forensic accountants are in high demand and can
easily draw a starting salary between $30,000 and $60,000 per annum.
(B) DISADVANTAGES OF FORENSIC ACCOUNTING:-
 Confidentiality Issue- Since the scrutiny of a company’s financial records is done by

an external forensic accountant, the chances of leakage of confidential matter are
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always there. It is true that their code of ethics clearly mentions that forensic
accountants and other members involved in the scrutiny must not engage in disclosing
confidential data to outsiders, but the possibility of disclosure cannot be nullified.
 Increased Chances of Threats and Negative Publicity- If the analysis of a company’s
financial statements points out the involvement of a particular person in fraudulent
activities, there is a significant chance that the person will try to threaten the company
to safeguard himself from the trial. Also, any trial that confirms a fraud happening in
the company comes under public eye and gains negative publicity, which directly
affects the reputation and investors relations of the company.
 Costs a Lot of Money- Forensic accounting can be an expensive affair because the
procedures which accountants use involve high-end accounting software. If study
results have to be presented in a trial, the overall expenditure goes up even further,
because the fees of forensic accountants are quite high. This can be a matter of
concern of the organization.
 Losing Employee Trust- It is quite obvious for employees to feel offended when they
come to know that their job is under scrutiny by a third person. If no fraud is
identified, employees are left with the feeling that the employer does not have faith in
them. Lost trust can be difficult to regain in such cases.
 Limited Use of Services- Federal regulations limit the use of services from a single
accounting firm. Suppose a company has tied up with one firm for auditing, it cannot
ask the firm to provide other services to it. Therefore, a company has to reach out to
several firms for carrying out its accounting tasks. Despite the disadvantages
associated with forensic accounting, it is, and will continue to be an important part in
the world of business. This is because it helps organizations and individuals to figure
out whether their financial accounts are accurate or fabricated to hide illegal activities
going on within the organization.
2.5 FORENSIC ACCOUNTANTS- THE BLOODHOUNDS OF

BOOK-KEEPING
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Forensic accounting requires the most important quality a person can possess: the ability to
think. There is no book that tells you how to do a forensic investigation. It is about solving a
puzzle or peeling an onion. It takes creativity. All of the larger accounting firms, as well as many
medium-sized and boutique firms have specialist forensic accounting departments. Within these
groups, there may be further sub-specializations: some forensic accountants may, for example,
just specialize in insurance claims, personal injury claims, fraud, construction, or royalty audits.
Forensic accountants may be involved in recovering proceeds of crime and in relation to
confiscation proceedings concerning actual or assumed proceeds of crime or money laundering.
In the United Kingdom, relevant legislation is contained in the Proceeds of Crime Act 2002. In
India there is a separate breed of forensic accountants called Certified Forensic Accounting
Professionals. Some forensic accountants are also Certified Fraud Examiners, Certified Public
Accountants, or Chartered Accountants. Forensic accountants utilize an understanding of
business information and financial reporting systems, accounting and auditing standards and
procedures, evidence gathering and investigative techniques, and litigation processes and
procedures to perform their work. 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 advisers to audit committees, fraud deterrence engagements, and
assisting in investment analyst research. 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. External Auditors find out the deliberate misstatements only but the Forensic
Accountants find out the misstatements deliberately. External auditors look at the numbers but
the forensic auditors look beyond the numbers. Forensic accountant takes a more proactive,
skeptical approach in examining the books of Accounting. They make no assumption of
management integrity (if they can assume so then there is no need for their appointment) show
less concerns for the arithmetical accuracy have nothing to do with the Accounting or Assurance
standards but are keen in exposing any possibility of fraud. In addition to the specialized
knowledge about the techniques of finding out the frauds one needs patience and analytical
mindset. One has to look beyond the numbers and grasp the substance of the situation. It is
basically the work of the intelligent accountants. He needs to question seemingly benign
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document and look for inconsistencies. He searches for evidence of criminal conduct or assists in
the determination of, or rebuttal of, claimed damages.
2.6 WHAT CHARACTERISTICS OR SKILLS SHOULD

FORENSIC ACCOUNTANT POSSESS?
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).
I. Core skills:-
 Ability to critically analyze financial statements- These 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 thought and motive behind criminal
behavior and to set up prevention programmes that motivate and encourage employees.
 An in-depth understanding of the fraud schemes such as misappropriations, money
laundering, bribery and corruption.
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 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. However, there
is no formal body that provides formal education of the frauds in India.
2.7 ROLE OF FORENSIC ACCOUNTANTS
A Forensic Accountant is often retained to analyze, interpret, summarize and present complex
financial and business-related issues in a manner that is both understandable and properly
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supported. Forensic Accountants can be engaged in Public Practice or employed by insurance
companies, banks, police forces, government agencies and other organizations.
(a) Criminal Investigations: Practicing forensic accountants could be called upon by the police to
assist them in criminal investigations which could either relate to individuals or corporate bodies.
The forensic accountant would use his/her investigative accounting skills to examine the
documentary and other available evidence to give his/her expert opinion on the matter. Their
services could also be required by Government departments, the Revenue Commissioners, the
Fire Brigade, etc for investigative purposes.
(b) Personal Injury Claims: Where losses arise as a result of personal injury, insurance
companies sometimes seek expert opinion from a forensic accountant before deciding whether
the claim is valid and how much to pay.
(c) Fraud Investigations: Forensic accountants might be called upon to assist in business
investigations which could involve funds tracing, asset identification and recovery, forensic
intelligence gathering and due diligence review. In cases involving fraud perpetrated by an
employee, the forensic accountant will be required to give his/her expert opinion about the nature
and extent of fraud and the likely individual or group of individuals who have committed the
crime. The forensic expert undertakes a detailed review of the available documentary evidence
and forms his/her opinion based on the information gleaned during the course of that review.
(d) Matrimonial Disputes: Solicitors often need the services of forensic accountants in divorce
cases involving disputes about matrimonial assets. Assignments of this sort might require the
forensic accountants to trace, locate and evaluate assets. Such assets, for instance, might
technically be owned by a business in which one of the parties to the divorce case has a share.
The assets would need to be accurately valued to ensure equity when splitting the divorcing
couples assets and liabilities.
(e) Professional Negligence: The forensic accountant might be approached in a professional
negligence matter to investigate whether professional negligence has taken place and to quantify
the loss which has resulted from the negligence. A matter such as this could arise between any
professional and their client. The professional might be an accountant, a lawyer, an engineer etc.
The forensic expert uses his/her investigative skills to provide the services required for this
assignment.
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(f) Expert Witness Cases: Forensic accountants often attend court to testify in civil and criminal
court hearings, as expert witnesses. In such cases, they attend to present investigative evidence to
the court so as to assist the presiding judge in deciding the outcome of the case.
(g) Meditation and Arbitration: Some forensic accountants because of their specialist training
they would have received in legal mediation and arbitration, have extended their forensic
accounting practices to include providing Alternative Dispute Resolution
(ADR) services to clients. This service involves the forensic accountant resolving both mediation
and arbitration disputes which otherwise would have been expensive and time consuming for
individuals or businesses involved in commercial disputes with a third party.
(h) Litigation Consultancy: Working with lawyers and their clients engaged in litigation and
assisting with evidence, strategy and case preparation.
(i) Computer Forensics: Assisting in electronic data recovery and enforcement of IP rights etc.
2.8 ROLE OF FORENSIC ACCOUNTANTS UNDER INDIAN

STATUTE
There is no mention of Forensic accountants in the Indian statutes so far but there are various
provisions related to Forensic accountants/auditors in the statutes. It can be categorized under the
following heads:
(a) INVESTIGATION AND INSPECTION: Forensic auditors may help the Police, ACB and
other investigating authorities in collecting evidences and other investigation purposes. For
example section 157 of Cr.P.C, 1973; section 17, 18 of Prevention of Corruption Act, 1988;
Section 6 of The Bankers Books Evidence Act, 1891; Section 78 of Information Technology Act,
2000; Section 209A, 227 of the Companies Act, 1956 wherein the Court or Police may require
the skills of Forensic accountants while inspecting any books in so far as related to the accounts
of an accused.
(b) EXPERT OPINION: Forensic accountants may see and carefully examine the accounts and
balance sheets and use his skills to find out whether there is any fraud committed or any anomaly
associated with it by giving his expert opinion. This finds place in for example s.45, s.118 of
Indian Evidence Act, 1872; s.293 of Cr.P.C, 1973.
(c) FORENSIC ACCOUNTING UNDER CARO (The Companies (Auditor’s Report)
Page | 21
Order, 2003): It can be categorized under following heads:
(i) DISPOSAL OF FIXED ASSETS: 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 Companies Act, 1956, AS 24 (“Discontinuing Operations”) and to
AAS 16 (Going Concern) and thereafter make his observations on this matter.
(ii) REPORT ON FRAUDS: If any fraud on or by the company has been noticed or reported
during the year. Following provisions CARO, 2003 are important in this aspect:
 AAS 4(Revised) guides the Auditor to obtain a management representation letter as the
frauds reported and detected during the year because of the nature of the fraud and the
difficulties encountered by the Auditors in detecting material misstatements in the
financial statements resulting from fraud. Accordingly, it may be concluded that it is
enough if the Auditor expresses his opinion on the frauds noticed and reported by the
management and not expected to be a detective to approach his work with suspicion
 Another major issue under this clause is that it also requires reporting of frauds
committed by the Company. The Auditor is left with no clues and is expected to travel
beyond the books to search for market information about frauds committed by the
Company, which is highly illogical.
(iii) TRANSACTIONS WITH RELATED PARTIES: The focus of the primary reporting under
this clause is to report whether transactions that need to be entered into a Register in pursuance
of Section 301 of the Companies Act, 1956 have been so entered. This Clause may be considered
as a further step towards the investor’s protection. However, the major issue here is that the audit
focus has to be shifted/ further intensified towards proprietary areas to find out the transactions
that need to be entered (a thorough scrutiny of all entries in the books of accounts may be
needed); and then to check the Register for actual recording of the same Mere reliance on the
301 Register is not enough and the Auditor has to scrutinize Form No.24AA (Disclosure of
interest by the Directors) to ascertain likely transactions that need to be entered in the 301
Register.
Page | 22
CHAPTER 3
3.1 FORENSIC ACCOUNTING IN INDIA- IMPLEMENTATION

AND PROGRESS
While forensic accounting developed as early as 1995 in USA, it put its first step in India just
few years back. In India, forensic accounting has risen to prominence because of increased
financial frauds popularly known as white collar crimes. The shortage of respect and perception
in India’s law enforcement agencies plus the price at which white collar crimes have enhanced,
has prompted the improvement of forensic accounting in India. Forensic accounting though a
new field in Indian accounting world has tremendous potential as a new practice area for Indian
CAs. Indian CAs with their extensive theoretical education and practical experience can create
forensic accounting and auditing as their prime area.
Page | 23
Indian forensic center of studies was established by CA Mayur Joshi in the year 2005. Post
Satyam fiasco, it started providing certifications and specializations such as CFAP (Certified
Forensic Accounting Professional) in Information Technology, Insurance, Anti-Money Laundry
expert, certified bank forensic accounting. CFAP is a person who has undergone training in the
field of forensic accounting, forensic auditing, litigation support and investigative accounting to
effectively handle the investigation of financial frauds and give expert testimony in the court of
law. Chartered accountancy firms such as Sharad Joshi chartered accountants do provide these
services. A Delhi based firm S.K Jain also investigated the world famous Xerox fraud case. But
by and large this area is dominated by the big four consultancy firms such as Deloitte, KPMG,
Price water house Coopers and Ernst and Young. In order to curb the increasing financial fraud
cases and scams, Government of India has established three four agencies that combat frauds as
follows:
(a) SFIO (Serious Fraud Investigation Office)
It was the first agency established by Government of India under ministry of corporate affairs
which looks into the frauds that involves the violations of multiple laws such as Income Tax,
FEMA and RBI Act etc. Formation of SFIO is really a landmark development for forensic
accountants. SFIO recognize CFE (Certified Forensic Expert) as the designation for the purpose
of employment and empanelment.
(b) CBI (Central Bureau of Investigation)
It has its specialized wing to deal with the financial frauds called as ‘economic offenses wing’.
(c) CVC (Central Vigilance Commission)
It is the place which handles the crucial part of the occupational frauds viz. Corruption. It also
helps in the bank fraud cases. Some of the initiatives taken by regulatory bodies show a positive
sign in preventing scams. To prevent scams in financial sector, RBI has asked banks to include
forensic accounting practices. SEBI has decided to create a “forensic cell” to improve the quality
of the financial information disclosed and to assist in detection of financial irregularities so as to
serve as an effective early warning mechanism. The future of forensic accounting in India is
poised to grow at a rapid pace.
3.2 TYPES OF FRAUDS
Page | 24
Following are the types of frauds:
(a) Occupational frauds
(b) Bank frauds
(c) BPO frauds
(d) Cyber frauds
(e) Stock market frauds
(f) Money laundering
(a) Occupational frauds- It is defined as an employee's misuse or abuse of his position for his
own enrichment by intentional misappropriation or misuse of company assets. This may
include fraud by an employee, manager or statutory representative.
(b) Bank Frauds-It is the use of potentially illegal means to obtain money, assets, or other
property owned or held by a bank or financial institution, or to obtain money from depositors by
fraudulently posturing as a bank or other financial institution. In many instances, bank fraud is a
criminal offence. The number of bank frauds in India is substantial. It is increasing with the
course of time in all the major operational areas in banking. Bank fraud is a big illegal business
in today's world.
(c) BPO frauds- Information security has emerged as a significant concern for banks, mobile
phone companies and other businesses that use call centers or business process outsourcing,
or BPO. There have been instances of theft of personal data reported from call centers.
(d) Cyber Frauds- Cyber crime refers to any crime that involves a computer and a network. The
computer may have been used in the commission of a crime, or it may be the target. Net crime is
criminal exploitation of the Internet. Dr. Debarati Halder and Dr. K. Jaishankar (2011) define
Cyber crimes as: "Offences that are committed against individuals or groups of individuals with
a criminal motive to intentionally harm the reputation of the victim or cause physical or mental
harm to the victim directly or indirectly, using modern telecommunication networks such as
Internet (Chat rooms, emails, notice boards and groups) and mobile phones (SMS/MMS)".Such
crimes may threaten a nation’s security and financial health.
(e) Stock Market Frauds- Stock Market Frauds, also known as stock fraud and investment fraud,
is a deceptive practice in the stock market that induces investors to make purchase or sale
decisions on the basis of false information, frequently resulting in losses, in violation of
Page | 25
securities laws. Offer of risky investment opportunities to unsophisticated investors who are
unable to evaluate risk adequately and cannot afford loss of capital is a central problem.
(f)Money Laundering- According to the United States Treasury Department, Money laundering

is the process of making illegally-gained proceeds (i.e., dirty money) appear legal (i.e., clean).
Typically, it involves three steps: placement, layering and integration. First, the illegitimate
funds are furtively introduced into the legitimate financial system. Then, the money is moved
around to create confusion, sometimes by wiring or transferring through numerous accounts.
Finally, it is integrated into the financial system through additional transactions until the "dirty
money" appears "clean."
3.3 SCAMS IN INDIA
Financial scams have a habit of cropping up with an alarming regularity in the Indian financial
system. Following is a list of ten leading financial scams in India, which have affected a large
population of investors, and involved huge sums of money. They managed to shake the very
foundations of our financial system, and were driven by that most basis of human instincts
“Greed”. In most cases, it was the greed of just one individual, or a very small group of
individuals, who managed to pull of such huge scandals.
(i) Insurance Scam: This scam had originated and prospered in the period immediately
following Independence in 1947. At that time, the insurance sector was not nationalized, and a
handful of private companies ruled the roost. These companies were more concerned with
providing benefits to selected industrialists, and ignored the interests of the common man. The
government responded by nationalizing the insurance sector, and the LIC was founded under a
Page | 26
special Act passed by the Parliament. This scam laid the foundation of the nationalization culture
in India.
(ii) Securities Scam: This is perhaps the most well known of all financial scams probably
because it happened in a highly visible period economic reforms had just been started in 1991.
Harshad Mehta was quick to understand the weaknesses of the banking system, and exploited
these weaknesses to the hilt. He managed to procure huge amounts of money using the so called
“Ready Forward” deals, and used this money to purchase large amounts of shares at hugely
inflated prices. He earned the sobriquet of “Big Bull” due to this penchant. Later, the banks got a
clue of his shady deals, and demanded their money back. The house of cards collapsed, and the
rest, as they say, is history.
(iii) CRB Scam: This scam took place in the years 1992-1996, the period immediately following
the Harshad Mehta fallout. This makes the scam even all the more daring and surprising. CR
Bhansali, the perpetrator of this scam, floated more than 100 companies, such as CRB Mutual
Funds and CRB Capital Markets. The primary purpose of these companies was to attract huge
funds from the public by promising high rates of interest. This interest was later paid from
further borrowings, and so on. In 1995, the stock market collapsed, and this proved to be the
undoing of CR Bhansali. He was investigated, and later arrested. After a brief 3 months stint in
jail, he has disappeared without a trace, and nobody is asking.
(iv) UTI Scam: The UTI scam involved the flagship US-64 scheme of UTI, which was meant to
channel the funds of small investors into instruments bearing high returns. Gradually, US-64
developed an investor base of around 2 crore investors. The economic liberalization in India,
coupled with the absolute opacity in the operations of UTI, led to a situation where in the
Government was forced to announce a huge bailout of about Rs 3,500-4,000 crores in an order to
prevent default in payments to the investors. The consequences of such a situation are
unimaginable. But the story does not end here. Later, it turned out that the UTI Chairman
appointed at this time, Mr. P S Subramanyam, along with a couple of executive directors, acted
wrongly to selectively benefit a powerful coterie of brokers and industrialists, while at the same
time, jeopardizing the interest of lakhs of small investors.
(v) Home Trade: Around the year 2000, a finance portal emerged on the financial landscape,
and gained quick recognition on the back of endorsements by personalities like Hrithik Roshan,
Sachin Tendulkar and Shahrukh Khan. The portal, owned by Sanjay Agarwal, claimed to deal in
Page | 27
gilts. Soon, RBI got suspicious of activities of some cooperative banks in the gilt market, and a
scam was uncovered. The same old saga brokers and bankers combining to rob people of their
hard earnings were repeated. Funds from Seaman’s Provident Fund and PPF were affected. The
total scam size was reported to be around Rs 300 crores, and more than Rs 200 crores were spent
on publicity costs alone.
(vi) Securities Scam: That our system never learns its lessons was proved by this scam.
Ketan Parkekh, a qualified CA, and a stock broker, identified a number of stocks (popularly
called the K-10), and took up huge positions in these. For this purpose, he used a large number of
Benami accounts and smaller stock exchanges, such as the Kolkata and Ahmedabad stock
exchanges. He also borrowed heavily from banks such as Global Trust Bank and Madhavpura
Mercantile Cooperative Bank. Unfortunately, he was stuck in a bear cartel, and was soon
pounded to pulp on the stock exchange. The extent of the scam was estimated to be around Rs
1,500 crores.
(vii) Fake Stamp Papers: This scam promised to be the mother of all scams in India, with the
initial reports quoting a figure of Rs 30,000 crores as the scam size. Later, RBI clarified that this
figure was “rather exaggerated”, and the “correct” figure was around Rs 200 crores. Again, this
scam exposes how the India system works – Mr. Abdul Karim Telgi, the scam kingpin, paid
bribes to get access to the security press in Nasik, where stamp papers and currency notes are
printed. He later used this knowledge to print fake stamp papers. At the height of the scam,
Telgi’s network spanned 14 states, 125 banks and more than 1,000 employees.
(viii) DSQ Software: Though this scam was modest in terms of money involved (only Rs
600 crores), and did not affect the general public to a great extent, yet it is notable for how it
came into being. The main player in the scam was Mr. Dinesh Dalmia, who was the MD of DSQ
Software Ltd. This company issued around 1.3 million shares in 2001, and these shares were
allotted to four companies on a preferential basis. NSDL, a stock depository, dematerialized and
helped in delivering the shares. Nothing was wrong in that, except that the shares were not even
listed on any stock exchange.
(ix) IPO Scam – A number of key operators, including corporate stock brokers such as
Karvy and Indiabulls, were involved in the IPO scam that spanned the years 2004 –
2005. The modus operandi was simple – the operators would open thousands of fake accounts to
purchase shares in IPOs, in the hope of selling later at huge profits. A spate of IPOs issued
Page | 28
during this period was heavily oversubscribed due to this scam, sometimes by as much as 40
times.
(x) Satyam: On a cold January morning in 2009, Ramalinga Raju, chairman of Satyam
Computer Services, admitted to falsification in the company accounts and various other
irregularities, and sent a chill down the collective spine of the Indian financial system.
Coming on the back of the global recession, this incident promised to bust the Indian outsourcing
industry and the stock market, but for some deft bailout work by the government. The matter is
still under investigation and litigation, and the true extent of the scam will be known in the
future, perhaps. Mr. Raju himself had admitted to irregularities worth around Rs 12,000 crores.
An analysis of the scams reveals a common script greed, corruption, unscrupulous brokers,
colluding bankers, irresponsible authorities and hapless investors, who refuse to learn their
lessons. But then, these are the essential ingredients of a worthy financial scam.
3.4 DEALING WITH FRAUD- CURRENT MODEL
There are four stages in the model. They are:

 The first stage is the fraud incident which raises consciousness while training and other
prevention criteria are out of the question. In such an environment, a fraudulent event
occurs. Then the company moves to crisis mode because it wants to identify the fraudster
and is too eager to prevent the event from becoming known publicly, save losses, and
reduce the impact of fraud on the organization.
 The second stage is the investigation stage which includes all security procedures and
internal control. Much of the investigation is conducted by interviewing and document
examination. The investigation might not end up with a decision but could take long time
and be costly at the end of the day.
 Before the third stage begins, investigation is completed and the company decides how
to take action against the fraudster. There are four possible decision actions: do nothing,
fire the fraudster, transfer the fraudster to another section, or fire the fraudster and start
legal proceeding.
 In fourth stage, the file is closed, the employee is changed, and new controls are applied
or not applied, and the problem is resolved. In this model, nothing is done after this
Page | 29
fourth stage until a new fraudulent event takes place. Fraudulent events do not decrease;
they might in fact become a chronic problem.
Figure representing the four stages of the current model of dealing with frauds
3.5 TECHNIQUES OF FORENSIC ACCOUNTING IN INDIA
The conventional accounting and auditing with the help of different accounting tools like ratio
technique, cash flow technique, a standard statistical tool examination of evidences are all part of
forensic accounting. In cases involving significant amounts of data, the present-day forensic
accountant has technology available to obtain or source data, sort and analyze data and even
quantify and stratify results through computer audit and various other techniques. Some of the
techniques involved in Forensic Accounting to examine the frauds are:
(a) BENFORD’S LAW: It is a mathematical tool, and is one of the various ways to determine
whether variable under study is a case of unintentional errors (mistakes) or fraud. On detecting
any such phenomenon, the variable under study is subjected to a detailed scrutiny. The law states
that fabricated figures (as indicator of fraud) possess a different pattern from random figures.
The steps of Benford’s law are very simple. Once the variable or field of financial importance is
Page | 30
decided, the left most digit of variable under study extracted and summarized for entire
population. The summarization is done by classifying the first digit field and calculating its
observed count percentage. Then Benford’s set is applied. A parametric test called the Z-test is
carried out to measure the significance of variance between the two populations, i.e. Benford’s
percentage numbers for first digit and observed percentage of first digit for a particular level of
confidence. If the data confirms to the percentage of Benford’s law, it means that the data is
Benford’s set, i.e. there is 68% (almost 2/3rd) chance of no error or fraud. The first digit may not
always be the only relevant field. Benford has given separate sets for 2nd, 3rd,… and for last
digit as well. It also works for combination numbers, decimal numbers and rounded numbers.
There are many advantages of Benford’s Law like it is not affected by scale invariance, and is of
help when there is no supporting document to prove the authenticity of the transactions.
(b) THEORY OF RELATIVE SIZE FACTOR (RSF): It highlights all unusual fluctuations,
which may be routed from fraud or genuine errors. RSF is measured as the ratio of the largest
number to the second largest number of the given set. In practice there exist certain limits (e.g.
financial) for each entity such as vendor, customer, employee, etc. These limits may be defined
or analyzed from the available data-if not defined. If there is any stray instance of that is way
beyond the normal range, then there is a need to investigate further into it. It helps in better
detection of anomalies or outliners. In records that fall outside the prescribed range are suspected
of errors or fraud. These records or fields need to relate to other variables or factors in order to
find the relationship, thus establishing the truth.
(c) COMPUTER ASSISTED AUDITING TOOLS (CAATs): CAATs are computer programs
that the auditor use as part of the audit procedures to process data of audit significance contained
in a client’s information systems, without depending on him. CAAT helps auditors to perform
various auditing procedures such as:
 Testing details of transactions and balances
 Identifying inconsistencies or significant fluctuations
 Testing general as well as application control of computer systems
 Sampling programs to extract data for audit testing
 Redoing calculations performed by accounting systems.
(d) DATA MINING TECHNIQUES: It is a set of assisted techniques designed to
automatically mine large volumes of data for new, hidden or unexpected informations or
Page | 31
patterns. Data mining techniques are categorized in three ways: Discovery, Predictive modeling
and Deviation and Link analysis. It discovers the usual knowledge or patterns in data, without a
predefined idea or hypothesis about what the pattern may be, i.e. without any prior knowledge of
fraud. It explains various affinities, association, trends and variations in the form of conditional
logic. In predictive modeling, patterns discovered from the database are used to predict the
outcome and to guess data for new value items. In Deviation analysis the norm is found first, and
then those items are detected that deviate from the usual within a given threshold (to find
anomalies by extracted patterns). Link discovery has emerged recently for detecting a suspicious
pattern. It mostly uses deterministic graphical techniques, Bayesian probabilistic casual
networks. This method involves “pattern matching” algorithm to “extract” any rare or suspicious
cases.
(e) RATIO ANALYSIS: Another useful fraud detection technique is the calculation of data
analysis ratios for key numeric fields. Like financial ratios that give indications of the financial
health of a company, data analysis ratios report on the fraud health by identifying possible
symptoms of fraud.
CHAPTER 4: EVALUATION AND ANALYSIS OF

COLLECTED DATA
4.1 DATA EVALUATION AND ANALYSIS USING TABLES AND
GRAPHS
4.1.1 SECTION 1:- PERSONAL DETAILS OF THE RESPONDENTS
TABLE 1- TABLE SHOWING THE OPTIONS CHOSEN BY RESPONDENTS FOR EACH QUESTION IN
SECTION 1
SERIAL NAME OF THE QUALIFICATIO OCCUPATIO

NO. RESPONDENTS AGE GENDER N N INCOME
1 Srishti Agrahari a b a and b b c
2 Sachin Kumar Bhalotia b a a a c
Page | 32
3 Arunabha Ganguly e a a a b
4 Raj Kumar Jagnani d a a a e
5 Narayan Agarwal b a a and b a c
6 Navin Kumar Agarwal b a a a b
7 Sriram Mittal b a a a b
8 Madan Mohan Sahu b a a a d
9 Manisha Balduva c b a a e
10 Ramesh Kusbaha c a a b d
11 Nawal Kishore Agarwal d a a b c
12 Mina Agarwal b b a b b
13 Varsha Gupta a b c c a
14 Himanshu Kothari a a c c a
15 Khushboo Agarwal a b b a a
16 Santosh Kumar Tibrewalla d a b a c
17 Ajay Kumar Goel d a a a c
18 Gunjan Jain a b c c a
19 Rashika Agarwal a b c c a
20 Ramesh Kumar Saboo c a a a b
21 Hitesh Kothari a a c c a
22 Sidesh Khowala a a c c a
23 Nishant Jain a a c c a
24 Pankaj Kumar Agarwal b a a b d
25 Vidisha Goel a b c c a
26 Suchit Gupta a a c c a
27 Om Prakash Saxena e a a a d
28 Gora Chand Mukherjee e a a a b
29 Vikram Bhiwaniwala b a a a e
Page | 33
30 Subodh Kumar Roy d a a a c
31 Mohit Jain a a c c a
32 Vishal Garodia a a b b b
33 Nikita Kanodia a b a and b b b
34 Dilip Kumar Sultania a a a a b
35 Bhal Chandra Khaitan e a a a d
36 Dalia Sharma a b c c a
37 Richa Agarwal a b b a b
38 Shilpi Jain b b a b c
39 Saket Agarwal a a c c a
40 Chanchal Banerjea e a a b c
41 Neha Agarwal a b c c a
42 Alok Garodia c a a b d
43 Pawan Kumar Chowdhary c a a a c
44 Amar Modi b a a b b
45 Tarun Kumar Gupta b a b a e
46 Arun Singhania c a a b b
47 Kishore Rajgaria c a a b c
48 Nagendra Kumar Singh b a a b d
49 Rajesh Singhania b a a b d
50 Ashok Kumar Chanduka d a a b d
TABLE 2- TABLE SHOWING THE PERCENTAGE OF RESPONDENTS UNDER DIFFERENT AGE GROUPS
NUMBE
AGE (in years) OPTIONS R PERCENTAGE
Below 30 a 19 38%
31-40 b 13 26%
41-50 c 7 14%
51-60 d 6 12%
Above 60 e 5 10%
TOTAL 50 100%
Page | 34
GRAPH 1- IT SHOWS THE PERCENTAGE OF RESPONDENTS UNDER DIFFERENT AGE GROUP
Percentage of Respondents under different

Age group
40% 38%
PERCENTAGE OF RESPONDENTS
35%
30% 26%
25%
20%
15% 14%
12%
10%
10%
5%
0%
Below 30 31-40 41-50 51-60 Above 60
AGE GROUP
TABLE 3- TABLE SHOWING THE PERCENTAGE OF RESPONDENTS ON THE BASIS OF GENDER
NUMBE
GENDER OPTIONS R PERCENTAGE
Male a 37 74%
Female b 13 26%
TOTAL 50 100%
GRAPH 2- IT SHOWS THE PERCENTAGE OF RESPONDENTS ON THE BASIS OF GENDER
Page | 35
Percentage of Respondents on the basis of
Gender
80% 74%
70%
60%
50%
40%
30% 26%
20%
10%
0%
Male Female
GENDER
TABLE 4- TABLE SHOWING PERCENTAGE OF RESPONDENTS HAVING DIFFERENT QUALIFICATION
OPTION
QUALIFICATION S NUMBER PERCENTAGE
CA a 29 58%
CS b 5 10%
CA and CS a and b 3 6%
Students pursuing B.COM. Finance c 13 26%
TOTAL 50 100%
GRAPH 3- IT SHOWS PERCENTAGE OF RESPONDENTS HAVING DIFFERENT QUALIFICATION
Page | 36
Percentage of Respondents having different
Qualification
58%
60%
PERCENTAGE OF RESPONDENTS 40% 26%
20% 10% 6%
0%
ce
CS
CS
CA
an
d
an
in
.F
CA
M
CO
B.
ng
ui
rs
pu
ts
en
ud
St
QUALIFICATION
TABLE 5- TABLE SHOWING PERCENTAGE OF RESPONDENTS ON THE BASIS OF THEIR OCCUPATION
OPTION
OCCUPATION S NUMBER PERCENTAGE
Practicing a 21 42%
Non-practicing b 16 32%
Articleship/Internship c 13 26%
TOTAL 50 100%
GRAPH 4- IT SHOWS THE PERCENTAGE OF RESPONDENTS ON THE BASIS OF THEIR OCCUPATION
Page | 37
Percentage of Respondents on the basis of
their Occupation
45% 42%
40%
35% 32%
30% 26%
25%
20%
15%
10%
5%
0%
Practicing Non-practicing Articleship/Internship
OCCUPATION
TABLE 6- TABLE SHOWING PERCENTAGE OF RESPONDENTS ON THE BASIS OF THEIR INCOME
INCOME (Rs.) OPTION NUMBER PERCENTAGE

Below 2,50,000 a 14 28%
2,50,001-5,00,000 b 12 24%
5,00,001-10,00,000 c 11 22%
Above 10,00,000 d 9 18%
Does not want to disclose e 4 8%
TOTAL 50 100%
GRAPH 5- IT SHOWS THE PERCENTAGE OF RESPONDENTS ON THE BASIS OF THEIR INCOME
Percentage of Respondents on the basis of their Income

30% 28%
24% 22%
20% 18%
10% 8%
0%
0 0 0 0 0 0 0 0 se
,0 ,0 ,0 ,0 lo
50 00 00 00 isc
2 , 5 , 0 , 0 , d
1- 1 1 to
lo
w
00 1- e nt
Be 0, 00 ov a
5 0, A b
ot
w
2, 5,
0 n
es
Do
INCOME (Rs.)
4.1.2 SECTION 2:- CHOOSE ANY ONE OPTION
Page | 38
TABLE 7- TABLE SHOWING THE OPTIONS CHOSEN BY RESPONDENTS FOR EACH QUESTION IN
SECTION 2
SERIAL NO. Q1 Q2 Q3 Q4 Q5
1 d e d d f
2 d e a a a
3 c e b a a
4 d a b d c
5 d f d d a
6 d f d a f
7 d f d d f
8 d f b d e
9 d f d d g
10 d e b a e
11 c a d a a
12 d f b a b
13 d a d d d
14 d b d a b
15 d d d a c
16 d a d a d
17 d f b a c
18 d a d d c
19 d a d d d
20 d f b a b
21 d a d a d
22 d a d a c
23 d d d d e
24 a f d d d
25 d b d a d
26 d f d d c
27 d a b a c
28 d f b d c
29 d d b b d
30 d b d b e
31 d d d b d
32 d f d a c
33 d c d d d
34 d a b a c
35 d d b b e
36 d b d b a
37 b c d b d
38 d f d c c
39 d b d d e
Page | 39
40 d d d a a
41 d a d c c
42 d f b a d
43 d a b d a
44 d b b d d
45 d f c a a
46 d f b b e
47 d a b b c
48 d a d a a
49 d f a a d
50 d f d d d
TABLE 8- TABLE SHOWING THE PERCENTAGE OF RESPONDENTS CHOOSING DIFFERENT OPTION

FOR Q1 OF SECTION 2
OPTIONS OF Q1 OPTIONS NUMBER PERCENTAGE

Accounting skills a 1 2%
Auditing skills b 1 2%
Investigation skills c 2 4%
Combination of all three d 46 92%
TOTAL 50 100%
GRAPH 6- GRAPH SHOWING THE PERCENTAGE OF RESPONDENTS CHOOSING DIFFERENT OPTION

FOR Q1 OF SECTION 2
Q1
92%
90%
60%
30% 2% 2% 4%
0%
e
ills
ls
ills
re
kil
sk
sk
th
gs
g
all
tin
tin
tio
of
un
di
ga
Au
n
sti
co
tio
ve
Ac
na
In
bi
m
Co
FORENSIC ACCOUNTING IS APPLYING
Page | 40
TABLE 9- TABLE SHOWING PERCENTAGE OF RESPONDENTS CHOOSING DIFFERENT OPTION FOR
Q2 OF SECTION 2
NUMBE
OPTIONS OF Q2 OPTIONS R PERCENTAGE
Occupational frauds a 14 28%
Bank frauds b 6 12%
BPO frauds c 2 4%
Cyber frauds d 6 12%
Stock market frauds e 4 8%
Money laundering f 18 36%
TOTAL 50 100%

FOR Q2 OF SECTION 2
Q2
40% 36%
30% 28%
20%
12% 12%
10% 8%
4%
0%
s s s s s g
ud ud ud ud ud r in
rf a rf a rf a rf a rf a e
al nk O r t nd
on BP be ke au
ti Ba Cy ar y l
up
a
ckm one
O cc St
o M
DIFFERENT TYPES OF FRAUDS
Q3 OF SECTION 2

Use services of forensic accountants a 2 4%
Consider myself a forensic
accountant b 17 34%
Employ forensic accountants c 1 2%
Have no involvement d 30 60%
Page | 41
TOTAL 50 100%
FOR Q3 OF SECTION 2
Q3
60%
60%
40% 34%
20% 4% 2%
0%
INVOLVEMENT WITH FORENSIC ACCOUNTING SERVICES
Q4 OF SECTION 2

Identifying requisite characteristics and skills a 22 44%
Hiring decisions b 8 16%
Retention or promotion decisions c 2 4%
Identifying specialization areas for employee or
professional development d 18 36%
TOTAL 50 100%

FOR Q4 OF SECTION 2
Page | 42
P ERC EN TA G E O F RESP O N D EN TS
Q4
44%
45% 36%
30% 16%
15% 4%
0%
FORENSIC ACCOUNTING ASSESSMENT TOOL WOULD BE USEFUL FOR
Q5 OF SECTION 2
NUMBE
OPTIONS OF Q5 OPTIONS R PERCENTAGE
Lack of investigative intuitiveness a 9 18%
Inability to synthesize b 3 6%
Inability to simplify the information c 13 26%
Inability to identify key issues d 14 28%
Inability to understand the goals of a case e 7 14%
Inflexible/close-minded f 3 6%
Others g 1 2%
TOTAL 50 100%
FOR Q5 OF SECTION 2
Page | 43
Q5
30% 26% 28%
25%
20% 18%
14%
15%
10% 6% 6%
5% 2%
0%
ss siz
e on ue
s se ed rs
ene h e ati si s a ca i nd the
v nt rm O
iti sy fo ke
y of -m
tu n y als o se
in t o e i tif o cl
v e
ilit
y th en eg le/
gati b i fy id th i b
sti In
a pl to nd ex
ve sim ii ty
l s ta Infl
in to r
o f ab de
ck iil ty In un
La ab yt
o
In ilit
ab
In
FREQUENT REASON FOR INEFFECTIVENESS OF FORENSIC ACCOUNTANT
4.1.3 SECTION 3:- CHOOSE MULTIPLE OPTIONS AS PER QUESTION
TABLE 13- TABLE SHOWING THE OPTIONS CHOSEN BY RESPONDENTS FOR Q1 OF SECTION 3
SERIAL OPTIONS
NO. a b c d e f g h i j k l m n o p
1 0 1 0 1 1 1 0 0 1 0 0 0 0 0 0 0
2 0 1 0 1 0 1 0 1 1 0 0 0 0 0 0 0
3 0 1 0 1 0 1 0 0 0 0 0 0 0 1 1 0
4 0 1 0 1 0 1 0 1 1 0 0 0 0 0 0 0
5 0 1 0 1 1 1 0 1 0 0 0 0 0 0 0 0
6 0 1 1 0 0 1 0 0 0 0 0 0 0 1 0 1
7 0 1 1 0 0 0 0 1 1 0 0 1 0 0 0 0
8 0 1 0 0 0 1 0 1 0 0 0 0 0 1 0 1
9 1 0 1 0 1 0 0 0 0 0 0 1 1 0 0 0
10 0 1 1 0 1 0 0 0 0 0 0 0 0 0 1 1
11 0 1 1 1 1 0 0 0 0 0 0 0 0 1 0 0
12 0 1 1 0 0 1 0 0 1 0 0 1 0 0 0 0
13 0 0 1 0 1 0 0 0 1 0 0 1 1 0 0 0
14 0 1 1 0 1 0 0 0 1 0 0 1 0 0 0 0
15 1 1 1 0 1 0 0 0 1 0 0 0 0 0 0 0
Page | 44
16 0 1 0 1 0 1 0 0 1 0 0 1 0 0 0 0
17 0 0 0 1 1 1 0 0 1 0 0 1 0 0 0 0
18 1 1 0 1 0 0 0 0 1 0 0 1 0 0 0 0
19 1 1 0 1 0 0 0 0 1 0 0 1 0 0 0 0
20 0 1 1 0 1 0 0 0 1 0 0 1 0 0 0 0
21 1 0 0 1 0 1 0 0 1 0 0 1 0 0 0 0
22 1 1 0 1 0 0 0 0 1 0 0 1 0 0 0 0
23 0 0 0 1 0 0 1 1 1 0 0 1 0 0 0 0
24 0 1 0 1 0 0 0 1 0 0 1 0 0 1 0 0
25 0 0 0 1 0 0 0 0 1 0 1 1 1 0 0 0
26 1 0 1 0 0 1 0 0 1 0 0 0 1 0 0 0
27 0 0 0 1 0 0 1 1 1 0 0 1 0 0 0 0
28 1 1 0 0 0 1 0 0 1 0 0 1 0 0 0 0
29 0 0 0 1 0 0 1 1 1 0 0 1 0 0 0 0
30 0 0 0 1 0 1 1 0 1 0 0 1 0 0 0 0
31 1 1 0 1 0 0 0 0 1 0 0 1 0 0 0 0
32 0 1 0 1 0 0 1 1 0 0 0 1 0 0 0 0
33 0 1 0 1 1 0 0 0 1 0 0 1 0 0 0 0
34 0 1 0 0 1 1 0 0 1 0 0 1 0 0 0 0
35 0 1 0 0 0 1 0 0 1 0 0 1 0 0 1 0
36 0 0 0 1 0 1 1 0 1 0 0 1 0 0 0 0
37 0 1 0 0 0 0 1 1 1 0 0 1 0 0 0 0
38 0 0 0 0 0 1 1 1 1 0 0 1 0 0 0 0
39 0 1 0 0 0 1 0 1 1 0 1 0 0 0 0 0
40 0 1 0 0 1 0 1 0 0 0 1 0 0 1 0 0
41 0 1 0 0 0 1 0 1 1 0 1 0 0 0 0 0
42 0 1 0 0 0 0 1 0 1 0 0 1 0 0 1 0
43 0 1 0 0 1 0 1 0 1 0 0 1 0 0 0 0
44 1 1 0 0 0 1 1 0 1 0 0 0 0 0 0 0
45 0 1 0 0 0 1 1 0 1 0 0 1 0 0 0 0
46 0 1 0 0 0 1 0 1 1 0 0 1 0 0 0 0
47 0 1 0 0 0 0 1 1 1 0 0 1 0 0 0 0
48 1 0 0 0 1 0 0 0 1 1 0 0 0 1 0 0
49 0 1 0 0 0 1 1 1 0 0 0 0 0 0 0 1
50 0 0 1 1 1 0 0 0 0 1 0 1 0 0 0 0
TABLE 14- KEY TABLE FOR Q1 OF SECTION 3
NUMBER REPRESENTS
0 Did not choose this option
1 Chose this option
Page | 45
TABLE 15- TABLE SHOWING THE PERCENTAGE OF RESPONDENTS CHOOSING DIFFERENT OPTIONS
FOR Q1 OF SECTION 3
NUMBER OF RESPONDENTS WHO

OPTIONS CHOSE THE OPTION PERCENTAGE
a) ADAPTIVE 11 22%
b) ANAYTICAL 36 72%
c) CONFIDENT 12 24%
d) DETAIL-ORIENTED 23 46%
e) ETHICAL 16 32%
f) EVALUATIVE 24 48%
g) INQUISITIVE 15 30%
h) INSIGHTFUL 17 34%
i) INTUITIVE 38 76%
j) PERSISTENT 2 4%
k) RESPONSIVE 5 10%
l) SKEPTICISM 32 64%
m) TEAM PLAYER 4 8%
n) GENERATE NEW IDEAS AND
SCENARIOS 7 14%
o) FUNCTION WELL AT PRESSURE 4 8%
p) MAKE PEOPLE FEEL AT EASE 4 8%
TOTAL 50 100%
GRAPH 11- GRAPH SHOWING THE PERCENTAGE OF RESPONDENTS CHOOSING DIFFERENT

OPTIONS FOR Q1 OF SECTION 3
Q1
14% 15%
16% 13%
12% 9% 10%
PERCENTAGE OF REPONDENTS
8% 6% 6% 7%
4% 5%
4% 2% 2% 3% 2% 2%
1%
0%
E L T D L E E L E T E M YER IOS E E
P TIV TICA IDEN NTE HICA ATIV SITIV TFU ITIV TEN NSIV ICIS A R SUR EAS
IE H U S L A S
A AY F ET ALU QUI SIG INT SI O
EP
T P N E AT
) AD AN CON L-OR e) V IN IN i) PER E SP
SK A M SCE T PR EL
E E
a b) c) AI f) g) h) j) k)
R l) E
) T A ND ELL
A F
ET m P LE
D S
d) EA W EO
ID TION KE P
W C A
E NE FUN ) M
T p
RA o)
NE
ESSENTIAL TRAITS AND CHARACTERISTICS OF AGEFORENSIC ACCOUNTANT
n)
Page | 46
SERIAL
NO. OPTIONS
a b c d e f g h i j k l m n
1 1 0 0 1 0 0 0 0 1 1 0 1 0 0
2 1 1 1 1 0 0 0 0 0 0 0 1 0 0
3 1 1 1 1 1 0 0 0 0 0 0 0 0 0
4 1 0 0 1 1 0 0 1 0 1 0 0 0 0
5 0 0 1 0 1 0 0 1 1 1 0 0 0 0
6 1 1 1 1 0 0 0 1 0 0 0 0 0 0
7 1 1 0 1 1 0 0 0 0 0 1 0 0 0
8 1 0 1 1 0 0 0 1 0 0 0 0 1 0
9 1 0 1 1 0 0 0 0 1 0 0 1 0 0
10 0 1 1 1 0 0 0 0 1 0 0 1 0 0
11 1 1 1 1 1 0 0 0 0 0 0 0 0 0
12 1 0 1 1 1 0 0 0 1 0 0 0 0 0
13 1 0 1 1 0 0 0 1 1 0 0 0 0 0
14 1 1 1 1 0 0 0 0 1 0 0 0 0 0
15 0 1 1 1 1 0 0 0 1 0 0 0 0 0
16 0 1 1 1 0 0 0 1 1 0 0 0 0 0
17 1 1 1 1 0 0 0 0 1 0 0 0 0 0
18 1 0 1 1 1 0 0 0 0 1 0 0 0 0
19 0 1 0 1 1 0 0 1 1 0 0 0 0 0
20 1 1 0 1 1 0 0 0 0 1 0 0 0 0
21 0 1 1 1 1 0 0 0 1 0 0 0 0 0
22 0 1 0 1 1 0 0 0 1 1 0 0 0 0
23 0 1 0 0 1 0 1 1 1 0 0 0 0 0
24 0 0 1 1 0 0 1 0 0 1 0 0 1 0
25 0 1 0 1 1 0 0 0 0 0 1 1 0 0
26 0 1 0 1 1 0 0 1 1 0 0 0 0 0
27 0 1 1 1 1 0 0 0 1 0 0 0 0 0
28 0 0 1 1 1 1 1 0 0 0 0 0 0 0
29 0 1 0 1 0 0 0 0 1 0 1 1 0 0
30 0 1 1 0 0 0 0 1 1 0 0 0 1 0
31 0 1 1 1 1 0 0 0 1 0 0 0 0 0
32 0 1 1 1 1 0 0 0 0 1 0 0 0 0
33 0 1 1 1 0 0 0 0 1 1 0 0 0 0
34 1 1 0 1 1 0 0 0 0 1 0 0 0 0
35 0 1 0 1 1 0 0 0 0 1 0 0 1 0
36 1 1 0 1 1 0 0 1 0 0 0 0 0 0
37 0 1 1 0 1 0 0 1 0 1 0 0 0 0
38 0 1 1 1 1 0 0 0 0 1 0 0 0 0
Page | 47
39 0 1 1 1 0 0 0 1 0 0 0 0 1 0
40 1 1 0 1 1 0 0 0 0 1 0 0 0 0
41 0 0 1 0 1 0 0 0 0 1 1 1 0 0
42 0 1 1 0 0 0 0 0 0 1 1 1 0 0
43 1 1 1 1 1 0 0 0 0 0 0 0 0 0
44 0 1 1 1 0 0 0 1 0 1 0 0 0 0
45 0 1 0 1 1 0 0 1 1 0 0 0 0 0
46 0 0 1 1 0 0 0 1 0 1 0 0 0 1
47 0 0 1 0 0 0 0 0 0 1 1 1 1 0
48 0 1 1 1 1 0 0 1 0 0 0 0 0 0
49 1 1 1 1 0 0 0 0 1 0 0 0 0 0
50 0 1 0 1 0 1 1 0 1 0 0 0 0 0
NUMBER REPRESENTS
1 Chose this option
FOR Q2 OF SECTION 3
NUMBER OF RESPONDENTS
OPTIONS WHO CHOSE THE OPTION PERCENTAGE
a) AUDITING SKILLS 20 40%
b) CRITICAL/STRATEGIC THINKER 37 74%
c) IDENTIFY KEY ISSUES 34 68%
d) INVESTIGATIVE ABILITY 43 86%
e) INVESTIGATIVE INTUITIVENESS 29 58%
f) EFFECTIVE WRITTEN COMMUNICATOR 2 4%
g) EFFECTIVE ORAL COMUNNICATOR 4 8%
h) RESEARCH SKILLS 17 34%
i) SEE THE BIG PICTURE 23 46%
j) SIMPLIFY THE INFORMATION 19 38%
k) SOLVE STRUCTURED PROBLEMS 6 12%
l) SOLVE UNSTRUCTURED PROBLEMS 9 18%
m) UNDERSTAND THE GOALS OF A CASE 6 12%
n) OTHERS 1 2%
TOTAL 50 100%
Page | 48
Q2
20% 17%
16% 15% 14%
12%
12% 9%
8% 7% 8%
8%
2% 4% 2%
4% 1% 2% 0%
0%
S R S Y S S RE S S E S
ILL KE UE ILIT ES TOR TOR ILL U IO
N
E M EM AS ER
K N S B N K T T L L C H
S I IS E CA CA S
PI
C A
OB OB
T
ING
C
TH EY VEA ITIV UNI NNI CH G R M R R O F A n) O
IT I K I U R I P P
G Y AT T M U A EB FO ED ED
S
A UD A TE TIF IG E IN
O M O M ESE H E IN R R O AL
N T IV C R T U U
a) TR DE VE
S C
AL h) E H CT CT EG
L/S c )I IN G AT T EN R ) SE F YT RU R U TH
TI i I
CA d) ES RI
T EO PL ES
T
NS
T D
R ITI V W TIV SIM LV U TAN
C IN E C j) E S
b) e) IV FE SO V R
E CT EF k) SOL DE
F g) l) N
EF )U
f) m
CORE SKILLS THAT A FORENSIC ACCOUNTANT NEEDS TO POSSESS
SERIAL
NO. OPTIONS
a b c d e f g h
1 1 1 0 0 1 1 0 0
2 1 1 0 0 1 1 0 0
3 0 0 0 0 0 1 0 0
4 1 1 0 0 1 1 1 0
5 1 0 0 0 1 1 0 0
6 0 1 0 0 1 1 0 0
7 0 1 1 0 1 1 1 0
8 0 1 1 0 1 1 1 0
9 1 1 1 0 1 1 0 0
10 1 0 1 0 1 0 0 0
11 1 0 1 0 0 1 1 0
12 1 1 0 0 1 1 0 0
13 1 1 1 0 1 1 0 0
14 1 1 1 0 1 1 0 0
Page | 49
15 1 1 0 0 1 1 0 0
16 1 1 0 0 0 1 0 0
17 1 1 0 0 1 1 0 0
18 1 1 0 0 1 1 0 0
19 1 1 0 0 1 1 0 0
20 1 1 0 0 1 1 0 0
21 1 1 0 0 1 1 0 0
22 1 1 0 0 1 1 0 0
23 1 1 0 0 1 1 0 0
24 0 0 0 0 0 1 0 0
25 1 1 0 0 0 1 0 0
26 1 1 0 0 1 1 1 0
27 1 1 0 0 1 1 0 0
28 1 1 0 0 1 1 1 0
29 1 1 0 0 1 1 0 0
30 1 1 0 0 1 1 0 0
31 1 1 0 0 0 1 0 0
32 1 1 0 0 1 1 0 0
33 1 1 0 0 1 1 0 0
34 1 1 0 0 1 1 0 0
35 1 1 0 0 1 1 1 0
36 1 1 1 0 1 1 0 0
37 1 1 1 0 0 1 0 0
38 1 1 0 0 1 1 0 0
39 1 1 1 0 1 1 0 0
40 0 0 0 0 1 0 0 0
41 1 1 0 0 0 1 1 0
42 1 1 0 0 1 1 0 0
43 1 1 0 0 1 1 1 0
44 1 1 1 0 0 1 0 0
45 1 1 0 0 1 1 0 0
46 1 1 1 0 1 1 0 0
47 1 1 0 0 1 1 0 0
48 1 0 1 0 1 1 1 0
49 0 0 0 0 0 1 0 0
50 1 1 1 1 0 0 1 0
NUMBER REPRESENTS
1 Chose this option
Page | 50
FOR Q3 OF SECTION 3
NUMBER OF RESPONDENTS
OPTIONS WHO CHOSE THE OPTION PERCENTAGE
a) BANKRUPTCY, INSOLVENCY AND REORGANIZATION 43 86%
b) COMPUTER FORENSIC ANALYSIS 42 84%
c) ECONOMIC DAMAGE CALCULATIONS 14 28%
d) FAMILY LAW 1 2%
e) FINANCIAL STATEMENT MISREPRESENTATION 39 78%
f) FRAUD PREVENTION, DETECTION AND RESPONSE 47 94%
g) VALUATION 11 22%
h) OTHERS 0 0%
TOTAL 50 100%

Page | 51
Q3
30%
25% 24%
22% 21%
20%
20%
15%
10% 7%
6%
5%
1% 0%
0%
N IS S N E N S
TIO LYS ION LAW TIO NS TIO HER
T O T
NI
ZA
AN
A A ILY NT
A
ES
P
LU
A
)O
A C C UL A M SE R VA h
G SI L F E D g)
EOR EN E CA d) E PR AN
R
D
R FO AG ISR TIO
N
N ER M T M C
A T DA E
CY PU IC EN DET
N M M ,
VE O M TE N
SOL b)C O NO STA TIO
IN C AL EN
CY, c)E CI R EV
T A N P
RUP FIN U D
K e) RA
BAN f)F
a)
AREAS OF SPECIALITY THAT ARE APPROPRIATE FOR A FORENSIC ACCOUNTANT
4.1.4 SECTION 4:- GIVE RANKING 1, 2, 3 AS PER YOUR PREFERENCE OF OPTIONS
TABLE 22- TABLE SHOWING THE OPTIONS CHOSEN BY RESPONDENTS FOR Q1& Q2 OF SECTION 4
Q1 Q2
SERIAL NO. OPTIONS OPTIONS
TAUGH
T LEARNED FROM EXPERIENCE DISCOVERY ANALYSIS COMMUNICATION
1 2 1 3 2 1
2 1 2 2 1 3
3 2 1 1 2 3
4 2 1 1 2 3
5 2 1 3 2 1
6 2 1 2 1 3
7 2 1 1 2 3
Page | 52
8 1 2 2 1 3
9 2 1 3 1 2
10 2 1 2 1 3
11 2 1 2 3 1
12 2 1 1 2 3
13 2 1 1 3 2
14 2 1 2 1 3
15 2 1 2 1 3
16 2 1 1 2 3
17 2 1 2 1 3
18 2 1 2 1 3
19 2 1 1 2 3
20 2 1 1 2 3
21 2 1 2 1 3
22 2 1 1 2 3
23 2 1 2 1 3
24 2 1 1 3 2
25 1 2 1 2 3
26 2 1 1 2 3
27 2 1 2 1 3
28 1 2 2 1 3
29 2 1 1 2 3
30 2 1 1 2 3
31 2 1 1 2 3
32 2 1 2 1 3
33 2 1 1 2 3
34 2 1 1 2 3
35 2 1 1 2 3
36 2 1 1 2 3
37 1 2 2 1 3
38 2 1 1 2 3
39 2 1 2 1 3
40 1 2 2 1 3
41 1 2 1 2 3
42 2 1 2 1 3
43 1 2 1 2 3
44 2 1 1 2 3
45 2 1 1 2 3
46 2 1 2 1 3
47 2 1 1 2 3
48 1 2 2 1 3
49 2 1 2 1 3
50 2 1 3 1 2
Page | 53
TABLE 23- KEY TABLE FOR Q1 & Q2 OF SECTION 4
RANK REPRESENTS
1 1st PREFERENCE
2 2nd PREFERENCE
3 3rd PREFERENCE
TABLE 24- TABLE SHOWING THE PERCENTAGE OF RESPONDENTS GIVING DIFFERENT RANKS TO
DIFFERENT OPTIONS AS PER THEIR PREFERENCE FOR Q1 OF SECTION 4
NO. OF NO. OF PERCENTAGE OF PERCENTAGE OF

RESPONDENTS RESPONDENTS RESPONDENTS RESPONDENTS
OPTIONS GIVING 1 GIVING 2 GIVING 1 GIVING 2
TAUGHT 9 41 18% 82%
LEARNED FROM
EXPERIENCE 41 9 82% 18%
TOTAL 50 50 100% 100%
GRAPH 14- GRAPH SHOWING THE PERCENTAGE OF RESPONDENTS GIVING DIFFERENT RANKS TO
Q1
90% 82% 82%
80%
70%
60%
50% TAUGHT
40% LEARNED FROM
EXPERIENCE
30%
18% 18%
20%
10%
0%
1 2
RANKING AS PER PREFERENCE OF RESPONDENTS
TABLE 25- TABLE SHOWING THE PERCENTAGE OF RESPONDENTS GIVING DIFFERENT RANKS TO
OPTIONS NO. OF NO. OF NO. OF PERCENTAGE PERCENTAGE PERCENTAGE
Page | 54
OF OF OF
RESPONDENT RESPONDENTS RESPONDENTS RESPONDENTS RESPONDENTS RESPONDENTS
S GIVING 1 GIVING 2 GIVING 3 GIVING 1 GIVING 2 GIVING 3
DISCOVERY 25 21 4 50% 42% 8%
ANALYSIS 22 25 3 44% 50% 6%
COMMUNICATION 3 4 43 6% 8% 86%
TOTAL 50 50 50 100% 100% 100%
GRAPH 15- GRAPH SHOWING THE PERCENTAGE OF RESPONDENTS GIVING DIFFERENT RANKS TO
Q2
100%
90% 86%
80%
70%
60% 50% 50% DISCOVERY
50% 44% 42% ANALYSIS
40% COMMUNICATION
30%
20%
6% 8% 8% 6%
10%
0%
1 2 3
RANKING AS PER PREFERENCE OF RESPONDENTS
4.2 DATA EVALUATION AND ANALYSIS USING CHI-SQUARE
4.2.1 To test whether qualification influences respondent’s decision or not
(a) Testing it on Q1 of Section 2-
Let Null Hypothesis be that there is no influence of respondent’s qualification on their decision.
And Alternative Hypothesis be that there is an influence of respondent’s qualification on their

decision.
TABLE 26- TABLE SHOWING THE TOTAL OF RESPONDENTS WITH DIFFERENT QUALIFICATION
CHOOSING DIFFERENT OPTION FOR Q1
Page | 55
Accounting Auditing Investigation Combination
skills skills skills of all three TOTAL
CA 1 0 2 26 29
CS 0 1 0 4 5
CA and CS 0 0 0 3 3
Students pursuing B.COM. Finance 0 0 0 13 13
TOTAL 1 1 2 46 50
The Value of Chi-square at 5% level of significance = 0.250602241 which is greater than 0.05.
Thus, Null hypothesis is accepted and hence, there is no influence of respondent’s qualification
on their decision.
(b) Testing it on Q2 of Section 2-

decision.
Stock
Occupationa Bank BPO Cyber market Money
l frauds frauds frauds frauds frauds laundering TOTAL
CA 7 2 0 3 3 14 29
CS 1 0 1 1 0 2 5
CA and CS 0 0 1 0 1 1 3
Students pursuing B.COM. Finance 6 4 0 2 0 1 13
TOTAL 14 6 2 6 4 18 50
The Value of Chi-square at 5% level of significance = 0.019326 which is less than 0.05.
Thus, Null hypothesis is rejected and alternative hypothesis is accepted and hence, there is
influence of respondent’s qualification on their decision.
(c) Testing it on Q4 of Section 2-
Page | 56
decision.
Identifying
specialization
Identifying Retention areas for
requisite or employee or
characteristics Hiring promotion professional
and skills decisions decisions development TOTAL
CA 14 5 1 9 29
CS 4 1 0 0 5
CA and CS 0 0 0 3 3
Students pursuing
B.COM. Finance 4 2 1 6 13
TOTAL 22 8 2 18 50
on their decision.
(d) Testing it on Q5 of Section 2-

decision.
Inability
Lack of Inability Inability to to Inability to
investigative to simplify the identify understand
intuitivenes synthesiz informatio key the goals Inflexible/close Other TOTA
s e n issues of a case -minded s L
CA 6 2 7 6 5 2 1 29
CS 1 0 2 2 0 0 0 5
CA and CS 1 0 0 1 0 1 0 3
Page | 57
Students
pursuing
B.COM.
Finance 1 1 4 5 2 0 0 13
TOTAL 9 3 13 14 7 3 1 50
on their decision.
4.2.2 To test whether occupation influences respondent’s decision or not
(a) Testing it on Q1 of Section 2-
Let Null Hypothesis be that there is no influence of respondent’s occupation on their decision.
And Alternative Hypothesis be that there is an influence of respondent’s occupation on their

decision.
TABLE 30- TABLE SHOWING THE TOTAL OF RESPONDENTS WITH DIFFERENT OCCUPATION
Combinati
Accounti Auditing Investigati on of all TOTA
ng skills skills on skills three L
Practicing 0 1 1 19 21
Non-practicing 1 0 1 14 16
Articleship/Interns
hip 0 0 0 13 13
TOTAL 1 1 2 46 50
Thus, Null hypothesis is accepted and hence, there is no influence of respondent’s occupation on
their decision.
(b) Testing it on Q2 of Section 2-
Page | 58

decision.
Stock
Occupational Bank BPO Cyber market Money
frauds frauds frauds frauds frauds laundering TOTAL
Practicing 5 1 1 3 2 9 21
Non-practicing 3 1 1 1 2 8 16
Articleship/Internship 6 4 0 2 0 1 13
TOTAL 14 6 2 6 4 18 50
their decision.
(c) Testing it on Q4 of Section 2-

decision.
Identifying
specialization
Identifying Retention areas for
requisite or employee or
characteristics and Hiring promotion professional
skills decisions decisions development TOTAL
Practicing 10 4 0 7 21
Non-practicing 8 2 1 5 16
Articleship/Internship 4 2 1 6 13
TOTAL 22 8 2 18 50
Page | 59
their decision.
(d) Testing it on Q5 of Section 2-

decision.
Inability to
Lack of Inability Inability to Inability to understan Inflexible/
investigative to simplify the identify d the goals close- Other
intuitiveness synthesize information key issues of a case minded s TOTAL
Practicing 5 1 6 3 3 2 1 21
Non-practicing 3 1 3 6 2 1 0 16
Articleship/
Internship 1 1 4 5 2 0 0 13
TOTAL 9 3 13 14 7 3 1 50
their decision.
4.2.3 FINDINGS:
We find that, in general, the different qualifications and occupations do not influence
respondent’s opinion.
CHAPTER 5: CONCLUSION
According to the respondents, the roles of the Forensic Accountant are-
Page | 60
 To go into the depth of any economic fraud or crime and play a role more than an
accountant to unearth and solve the case through their investigative and other skills.
 To detect hidden frauds, take corrective measures and overall improve the process of
audit.
 To deal with the business reality of the business situation.
 They should be able to respond immediately and communicate financial information
clearly and concisely.
 Prevention as well as detection of other financial anomalies with the skill of audit,
accounts, and investigation.
 Applying accounting, auditing and investigation skills to find out the fraud.
 Smooth functioning of the economy.
 Giving a correct shape to accounting by identifying the critical areas which need to be
addressed.
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. 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 market place 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.
REFERENCES
(A) Websites:
Page | 61
 http://indiaforensic.com/
 https://www.bpw.com/the-role-of-a-forensic-accountant-in-todays-business-
climate/
 https://www.linkedin.com/pulse/forensic-accountant-recognition-indian-law-ca-
sanjay-ruia
 https://en.wikipedia.org/wiki/List_of_scandals_in_India
 http://www.fnu.edu/growing-importance-forensic-accounting/
(B) Journal:
 Journal of Forensic & Investigative Accounting Volume 1(1) 2009 - Volume 6(3)
2014 provided by James R. Martin, Ph.D., CMA Professor Emeritus, University
of South Florida.
ANNEXURE: QUESTIONNAIRE ON FORENSIC

ACCOUNTING
Section 1:- Personal Details of the Respondents

Page | 62
Name-
Age- below 30 years 31-40 years 41-50 years
51-60 years above 60 years
Gender- Male Female
Qualification (tick whichever are applicable)-
C.A. C.S.
Students pursuing B.COM. Honours (Finance)
Occupation- Practicing Non-practicing
Articleship/Internship
Income- below 2,50,000 2,50,001-5,00,000
5,00,001-10,00,000 above 10,00,000
Does not want to disclose
Section 2:- Choose any one option
Q1. According to you, what does forensic accounting mean?
(a) Forensic accounting is applying accounting skills.
(b) Forensic accounting is applying auditing skills.
(c) Forensic accounting is applying investigation skills.
(d) It is the combination of all the above three.
Q2. According to you, which is the most vulnerable area prone to fraud in Indian
context?
(a) Occupational frauds. (b) Bank Frauds.
(c) BPO frauds. (d) Cyber frauds.
(e) Stock market frauds. (f) Money laundering.
Page | 63
Q3. What is your involvement with forensic accounting services?
(a) I use services of forensic accountants.
(b) I consider myself a forensic accountant.
(c) I employ forensic accountants in my firm.
(d) I have no involvement.
Q4. A forensic accounting assessment tool would be useful for:
(a) Identifying requisite characteristics and skills.
(b) Hiring decisions.
(c) Retention or promotion decisions.
(d) Identifying specialization areas for employee or professional development.
Q5. Identify the most frequent reason why forensic accountants are ineffective.
(a) Lack of investigative intuitiveness.
(b) Inability to synthesize.
(c) Inability to simplify the information.
(d) Inability to identify key issues.
(e) Inability to understand the goals of a case.
(f) Inflexible/close-minded.
(g) Others.
Section 3:- Choose multiple options as per question
Q1. Identify the 5 essential traits and characteristics of a forensic accountant.
(a) Adaptive (b) Analytical (c) Confident
(d) Detail-oriented (e) Ethical (f) Evaluative
(g) Inquisitive (h) Insightful (i) Intuitive

Page | 64
(j) Persistent (k) Responsive (l) Skepticism
(m) Team player (n) Generate new ideas and scenarios
(o) Function well at pressure (p) Make people feel at ease
Q2. Identify the 5 core skills that a forensic accountant needs to possess?
(a) Auditing skills (b) Critical/strategic thinker
(c) Identify key issues (d) Investigative ability
(e) Investigative intuitiveness (f) Effective written communicator
(g) Effective oral communicator (h) Research skills
(i) See the big picture (j) Simplify the information
(k) Solve structured problems (l) Solve unstructured problems
(m)Understand the goals of a case (n) Others
Q3. Please check all areas of specialty that you believe are appropriate for a
forensic accountant.
(a) Bankruptcy, insolvency and reorganization.
(b) Computer forensic analysis.
(c) Economic damage calculations.
(d) Family law.
(e) Financial statement misrepresentation.
(f) Fraud prevention, detection and response.
(g) Valuation.
(h) Others.
Section 4:- Give ranking 1, 2, 3 as per your preference of options
Q1. From your observation of forensic accountants, intuition can be:
Page | 65
Taught Learned from experience
Q2. Assuming the following are the 3 procedural protocols of financial

accounting, please provide your ranking of the 3 in order of importance to the
success of the engagement.
Discovery Analysis Communication
Section 5:- Open ended question
Q. According to you, what is the role of Forensic Accountants?
Page | 66

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FORENSIC ACCOUNTING AND REPORTING IN

in partial fulfillment for the award of the degree of

BACHELOR IN COMMERCE (HONOURS)

ST. XAVIER’S COLLEGE (AUTONOMOUS)

UNDER UNIVERSITY OF CALCUTTA

MONTH & YEAR: APRIL, 2016

ROLL NUMBER: 1075

Under the supervision of

PROFESSOR CHANDRANI DUTTA

(PROFESSOR CHANDRANI DUTTA)

CHAPTER NO. TITLE PAGE NO.

1.2 LITERATURE REVIEW

1.4 RESEARCH METHODOLOGY

1.5 PLAN OF ACTION

1.6 LIMITATIONS OF THE RESEARCH

CHAPTER 2: CONCEPT AND RELATED TERMS

2.1 WHAT IS FORENSIC ACCOUNTING?

2.2 HISTORY OF DEVELOPMENT OF FORENSIC

2.3 NATURE OF FORENSIC ACCOUNTING

2.4 ADVANTAGES AND DISADVANTAGES OF FORENSIC

(B) DISADVANTAGES OF FORENSIC ACCOUNTING:-

 Confidentiality Issue- Since the scrutiny of a company’s financial records is done by

2.5 FORENSIC ACCOUNTANTS- THE BLOODHOUNDS OF

2.6 WHAT CHARACTERISTICS OR SKILLS SHOULD

A forensic accountant is expected to be a specialist in accounting and financial systems. Yet, as

I. Core skills (specialized skills and knowledge).

II. Non-core skills (personal skills).

II. Non-core skills:- Includes, but are not limited to:

 Sound professional judgment.

 Look beyond numbers and grasp substance of situation.

 Pay attention to smallest of detail, observe and listen carefully.

2.7 ROLE OF FORENSIC ACCOUNTANTS

2.8 ROLE OF FORENSIC ACCOUNTANTS UNDER INDIAN

3.1 FORENSIC ACCOUNTING IN INDIA- IMPLEMENTATION

3.2 TYPES OF FRAUDS

(f)Money Laundering- According to the United States Treasury Department, Money laundering

3.3 SCAMS IN INDIA

3.4 DEALING WITH FRAUD- CURRENT MODEL

There are four stages in the model. They are:

3.5 TECHNIQUES OF FORENSIC ACCOUNTING IN INDIA

CHAPTER 4: EVALUATION AND ANALYSIS OF

4.1.1 SECTION 1:- PERSONAL DETAILS OF THE RESPONDENTS

SERIAL NAME OF THE QUALIFICATIO OCCUPATIO

1 Srishti Agrahari a b a and b b c

2 Sachin Kumar Bhalotia b a a a c

4 Raj Kumar Jagnani d a a a e

5 Narayan Agarwal b a a and b a c

6 Navin Kumar Agarwal b a a a b

8 Madan Mohan Sahu b a a a d

11 Nawal Kishore Agarwal d a a b c

16 Santosh Kumar Tibrewalla d a b a c

17 Ajay Kumar Goel d a a a c

20 Ramesh Kumar Saboo c a a a b

24 Pankaj Kumar Agarwal b a a b d

28 Gora Chand Mukherjee e a a a b

33 Nikita Kanodia a b a and b b b

34 Dilip Kumar Sultania a a a a b

35 Bhal Chandra Khaitan e a a a d

50 Ashok Kumar Chanduka d a a b d

Percentage of Respondents under different

TABLE 3- TABLE SHOWING THE PERCENTAGE OF RESPONDENTS ON THE BASIS OF GENDER

GRAPH 2- IT SHOWS THE PERCENTAGE OF RESPONDENTS ON THE BASIS OF GENDER

TABLE 4- TABLE SHOWING PERCENTAGE OF RESPONDENTS HAVING DIFFERENT QUALIFICATION