Govt to announce forensic auditing norms, bring clarity in fraud detection

Standards used now are not clear, resulting in hundreds of cases across India courts filed by borrowers, companies and individuals

The government will soon announce new forensic accounting standards for default accounts. The move was necessitated after forensic audits on some accounts were classified as fraud by one bank while the same account was classified as non-fraud by another.

According to a source, the Ministry of Corporate Affairs will shortly notify the new standards, which will be applicable to all auditors conducting forensic accounting for banks. Such audits are done to comply with the various Reserve Bank of India (RBI) circulars on non-cooperative borrowers, wilful defaulters and fraud classification. 

Also, the Insolvency and Bankruptcy Board of India will use the same standards