New regulatory environment for forensic accountants

The role of forensic accountants has evolved in recent decades as today’s digitised world makes it easier for perpetrators to commit fraud (Kirby 2011, 1). The regulatory environment must keep up with this and the increased demand for forensic accountants (Kirby 2011, 5). APES 215 Forensic Accounting Services replaced two standards dating back to 2002, and was issued in 2008 and revised in 2013. It outlines the mandatory quality and ethical standards that forensic accountants must follow (Accounting Professional & Ethical Standards Board 2013, 2).

Forensic accountants are frequently engaged to act as expert witnesses in court, both in the civil and criminal jurisdiction. Their role involves investigating and analysing information to present their findings and opinion in a report across a wide variety of cases (Warshavsky 2013, 9). This could be relevant in our company if we are ever the victims of white-collar crime.

(Raffa PC 2013)

I recently read a case where the forensic accountant clearly didn’t understand his role, and his report was rendered inadmissible. In ASIC v Rich (2005) 53 ACSR 110, the expert failed to disclose his previous involvement in assisting ASIC, which questioned his independence. To avoid this happening, all forensic accountants must understand and keep up with the development of this new regulatory environment, particularly given their crucial role in providing an expert opinion.

Relevant Links
If you would like to read a copy of APES 215, you can do so here:
http://www.apesb.org.au/uploads/standards/apesb_standards/13092014103232p1.pdf

If you would like to read the Supreme Court of New South Wales' judgment in ASIC v Rich (2005) 53 ACSR 110 or download a copy, you can do so here: https://www.caselaw.nsw.gov.au/decision/549fbce03004262463ba18a6

References
Accounting Professional & Ethical Standards Board. 2013. Forensic Accounting Services. APES 215. Accessed March 26, 2016. http://www.apesb.org.au/uploads/standards/apesb_standards/13092014103232p1.pdf.

Kirby, Michael. 2011. “Forensic Accounting – New Rules and Opportunities.” Paper presented at the Business Valuation and Forensic Accounting Special Interests Groups Conference, Sydney, March 11.
http://www.michaelkirby.com.au/images/stories/speeches/2000s/2011/2525-FORENSIC-ACCOUNTING-CONF-MARCH-2011.pdf.

New South Wales Supreme Court. 2005. “ASIC v Rich.” Accessed April 19, 2016.
https://www.caselaw.nsw.gov.au/decision/549fbce03004262463ba18a6.

Raffa PC. 2013. “What is Forensic Accounting?” YouTube video, posted October 30. Accessed April 18, 2016.
https://www.youtube.com/watch?v=_DLg_3rXkHM.

Warshavsky, Mark S. 2013. “The Role of Forensic Accountants in Litigation Cases.” The CPA Journal 83 (6): 58-61. Accessed March 26, 2016.
http://search.proquest.com.ezp01.library.qut.edu.au/docview/1417579770/abstract/E8E153DFC2D6481DPQ/1?accountid=13380.