Page 39 - Novem December 2016

Importance of Forensic Accounting in Countries of Business Opacity: A Means to End Fraud
Countries with opaque business practices tend to share similar characteristics
that justify the prevalence of fraudulent activities. As it was mentioned earlier,

the factors that contribute to the fraudulent behavior in the financial sector can be
categorized under four categories; culture, government and legislation (macro-

level), management, and education (micro-level).

The importance of adopting forensic accounting is thus highlighted, however, the
D
E process of introduction is not an on the spot process. On the contrary, it requires
C time and effort in terms of shifting cultural awareness to realize the importance of

E FA. That being said, the government as a primary facilitator and the educational
P systems should take part in creating awareness and shifting cultural mentality

T towards FA. Managements must also educate employees on FA and to adopt it as
I part of its system.
O

N A. Forensic Accounting in Culture
Koh et al., (2009) conducted a study to examine the acceptance level of the public
in Malaysia regarding forensic accounting. The study revealed that problems arise

from the fact that FA service is still new to most of the businesses and even to the
public in Malaysia. This leads to confusion among the public and some may even

be unaware of the existence of the system. Therefore, the importance of the service
is disregarded (goes unnoticed).

Two variables affect the acceptance levels of the public for the practice of forensic
accounting as the main tool in investigating a company’s account to detect fraud.

The variables include the public’s understanding level on forensic accounting
functions and the perception regarding the implementation of forensic accounting
in the investigation. The understanding level of the public and the functioning of

forensic accounting will determine whether the public in Malaysia will accept it as
the main tool in investigating a company’s account in case of fraud. The perception

of the public on the implementation of forensic accounting in the investigation of
a company’s financial statement also determines the acceptance level of forensic
accounting in the country.

This study shows the importance of two basic components that should be available

to create a ground for forensic accounting implementation; these elements are
awareness and knowledge of forensic accounting as an anti-fraud tool

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