The Role of Forensic Accounting in Detecting Corporate Fraud

Abstract

Forensic accounting has emerged as a pivotal mechanism in uncovering complex corporate fraud in an increasingly volatile and technology-driven business environment. This study examines the multifaceted role of forensic accountants in detecting, investigating, and preventing fraudulent financial activities within corporate entities. It highlights how forensic accounting integrates accounting expertise, investigative skills, digital analytics, and legal knowledge to reveal financial irregularities that traditional auditing methods may overlook. The abstract underscores the growing relevance of forensic tools such as data mining, ratio analysis, predictive modelling, and digital forensics in identifying red flags across financial statements and transactional data. Furthermore, it explores the significance of professional scepticism, ethical judgement, and regulatory compliance in enhancing fraud detection effectiveness. The study also reflects on notable corporate scandals that have shaped the evolution of forensic accounting practices, emphasising the need for stronger internal controls, transparency, and governance frameworks. Overall, forensic accounting is positioned as an indispensable discipline for strengthening corporate accountability and mitigating financial misconduct. It concludes that organisations must invest in specialised forensic expertise to safeguard assets, protect stakeholder interests, and foster a culture of ethical financial reporting.