FORENSIC ACCOUNTING IN FRAUD DETECTION AND PREVENTION: A LITERATURE REVIEW

Abstract

Forensic accounting has been globally acclaimed to be a veritable tool in fraud prevention and detection in both public and private sectors. This paper reviewed the concepts of forensic accounting and fraud as well as empirical studies on the roles played by forensic accounting in fraud detection and prevention. Previous studies showed that both forensic accounting and fraud have no generally acceptable definitions. However, there is a common view with regards to the meaning of the concepts. It is also discovered that forensic accounting covers litigation support, investigative accounting, and dispute resolution. Literature further revealed that some authors classified fraud as internal, external, and mixed, while others classified it as financial statement fraud, asset misappropriation, and corruption. This paper also found out that forensic accounting plays an important role in fraud detection and prevention in both public and private organisations. This study therefore recommended that forensic accounting should continue to be used in order to detect and prevent fraud in organisations.