Satyam fallout: Auditors move from fault finding to fraud finding

The Satyam scam is prompting auditors to take up courses in ‘fraud detection’ instead of remaining confined to ‘fault finding from books of companies.’

Looking at the need and appetite for such a skilled accounting practices, apex body of chartered accountants Institute of Chartered Accountants of India (ICAI) has introduced study course on pilot bases for CAs on ‘Fraud and Forensic accounting.’

“This accounting practice is useful in finding corporate fraud, arresting business leakages and also for finding compliances for corporate governance and so on”, said Chetan Dalal, chief faculty for the course.

At present companies use the services of forensic auditors and fraud examiners only if the need arises.

Explaining the concept of forensic accounting, Dalal said “It is much more penetrative and findings are acceptable in the court of law.” One has to go to the root of the transaction or action to find out the genuineness and skills in forensic audit helps tracking this. 

The ICAI course consists of five modules -- financial crime, cyber crime, use of computers as tools in investigations, signature evaluation and field inquiry.

In India, there are only handful of experts in fraud and forensic audit. 

Dalal, who designed the structure of the course, said, “Police and the CID wing that follows economic crimes havem, in the past, been trained on forensic audit.”

Down the line, the Institute also plans to offer the course to officials from the Office of the Comptroller and Auditor-General, Income-Tax, Serious Fraud Investigation Office, Reserve Bank of India, Securities and Exchange Board of India, banks, non-banking finance companies, and Economic Of fences Wing of the police among others.