Forensic accounting, also called investigative accounting or fraud audit, is a merger of forensic science and accounting. Forensic science according to Crumbley (2003) “may be defined as application of the laws of nature to the laws of man”. “He also defined forensic as suitable for use in a court of law (Crumbley et al 2005).
He refers to forensic scientists as examiners and interpreters of evidence and facts in legal cases that also offers expert opinions regarding their findings in court of law. The science in question here is accounting science, meaning that the examination and interpretation will be of economic information.
Joshi (2003) defined forensic accounting as the application of specialized knowledge and specific skill to stumble up on the evidence of economic transactions. Zysman (2001) put forensic accounting as the integration of accounting, auditing and investigative skills. Simply put forensic accounting is accounting that is suitable for legal review offering the highest level of assurance and including the now generally accepted connotation of having been arrived at in a scientific fashion (Crumbley, 2006).
Coenen (2005), stated that forensic accounting involves the application of accounting concepts and techniques to legal problem. It demands reporting, where the accountability of the fraud is established and the report is considered as evidence in the court of law or in the administrative proceeding (Joshi). It provides an accounting analysis that is suitable to the court which will form the basis of discussion, debate and ultimately dispute resolution (Zysman, 2001).
These means that forensic accounting is a field of specialization that has to do with provision of information that are meant to be used as evidence especially for legal purposes. The person practicing in this field investigate and document financial fraud and white-collar crime such as embezzlement investigate allegations of fraud, estimates losses damages and assets and analysis complex financial transaction. They provide those services for corporation, attorneys criminal investigators and the government (Coenen, 2005).
In conclusion, the researcher came to the understanding that forensic accounting is accounting that provides accounting analysis that is suitable for the court and which will form the basis for discussion, debate and ultimately dispute resolution. It is actually the integration of accounting, auditing and investigative skills to assist in legal matters.