Forensic Accounting Essay

2265 Words 10 Pages
Forensic Accounting

When I hear the word ‘Forensic’ the idea and image of a homicide investigation in which evidence gathered is analyzed at a laboratory to determine ‘who done it’. Shows like CSI, Bones, Law and Order depicts the forensic aspect in their broadcast. Being a registered nurse, another thought comes to mind when hearing the term ‘forensic’. I like to watch Dr. G medical examiner on the Discovery channel. That is a reality show regarding investigative research on how a person died. This is done by performing an autopsy and analyzing the pathological reason for a death to determine if foul play was involved. However, I rarely placed the thought that accounting can have a forensic aspect, too. I was always under
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Do they interview or interrogate when interacting with business clients? 3. What aspect and training makes them good auditors and why?
Before I can start talking about the details of forensic accounting, let me provide you a synopsis as to how forensic accounting evolved. The famous accounting scandals of all time are Enron, WorldCom, Tyco, Arthur Anderson, and more. The Sarbanes Oxley Act of 2002 was introduced due to accounting scandals of these infamous publicly traded companies. In response to many fraudulent financial reports, the Act was intended to reform accounting, financial reporting, and auditing functions of a company to reinforce the importance of corporate ethics. The purpose of Sarbanes Oxley Act is to prevent publicly traded companies from financial deception and misleading their investors and shareholders. “Three important points of the SOX influence the management of company records. The first point restricts the destruction, alteration, and falsification of records or documents. If a person attempts these activities, he will face severe penalties and imprisonment. Second point is that the businesses must follow a set of guidelines concerning communications recording, audits, records etc. Though Sarbane Oxley Act keeps large corporations from fraudulent behavior, it has made certain accidental burdens on smaller businesses, making it difficult for them to grow and flourish. Compliance with this act is not a heavy task”

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