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April 2012

Auditor Holmes — SEBI’s forensic accounting team is a welcome move to expose frauds

By Tarunkumar Singhal, Raman Jokhakar
Chartered Accountants
Reading Time 2 mins
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Kautilya listed 40 ways of embezzlement in the Arthashastra centuries before fictional detective Sherlock Holmes pursued forensics as a science.

Even if it comes a century after Holmes, SEBI’s move to form a separate forensic accounting team to detect fraudulent transactions of companies is welcome. An in-house team will strengthen investigation and force companies to improve their corporate governance.

So, SEBI’s move to ready a cadre of forensic accountants with specialised skill-sets is a good idea. Surely, these auditors can identify, expose and prevent weaknesses in areas such as poor corporate governance, flawed internal controls and fraudulent financial statements.

The Office of the Chief Accountant in the US Securities and Exchange Commission, for example, assists other departments in investigation and ensures that financial statements are presented fairly to investors. The forensic accounting team in SEBI can play a similar role. In any case, better late than never.

(Source: The Economic Times, dated 1-3-2012) (Comme n t s : Do we h a v e e n o u g h we l l – t r a i n e d a n d experienced Forensic Accountants/Auditors? What are we doing to assemble such a Team of Forensic Auditors?)

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