As financial frauds increase, the chartered accountants feel there is an urgent need for Forensic Accounting and Investigation professionals in India to conduct their professional assignments in a manner that is based on the comprehensive, qualitative and prudent set of Standards, and also to collect evidence.
The benefits can range from process standardization across the board to the collection of evidence based on a process that may be subject to a high level of scrutiny in a court of law. Standards once in place will also add to the overall ability to deal professional assignments relating to the engagement of Forensic Accounting and Investigations. And, as the forensic auditor can identify the fund diversion, siphoning of funds and other related activities, relating to corporate, these standards will be helpful to the Public Interest Entities as well.
In a brainstorming session on Tuesday, the Council of The Institute of Chartered Accountants of India (ICAI) has accepted the proposal of the Digital Accounting and Assurance Board (DAAB) of ICAI to develop and issue a set of Forensic Accounting and Investigation Standards (FAIS) in India. These sets of Standards will result in process standardization across the board.
Apart from this, the role of a forensic auditor is very crucial and therefore required in every sphere of business. With the support of a Forensic Audit Report, during the Insolvency resolution process, the Committee of Creditors can identify and declare the Promoters/ Directors of the Corporate Debtor Company, as “Willful Defaulter” and thereby take the necessary steps.
“The project of developing Forensic Accounting and Investigation Standards (FAIS) is an outcome of extensive discussions within the ICAI on the need for the CA community to curtail its dependence on overseas literature and Standards, and instead develop its own set of intellectual property along the lines of the government’s vision of an “Atmanirbhar Bharat”, said Atul Kumar Gupta, President, ICAI.
These FAIS are being prepared and drafted indigenously but will be helpful for the Forensic Professionals worldwide. Forensic Accounting Profession will gain importance in the Forensic Accounting world by a set of disciplinary approaches and will demonstrate Atmanirbharta in Forensic Accounting & Investigation, he said.
Gupta further added, “The ICAI is the only Institute in the accounting world which is developing a full set of FAIS standards for its Forensic Professionals. In fact, such intellectual property can be the basis of exporting our CA services to the world, which is finding our extensive experience in this area highly unique and top-notch.”
First Published: Sept 1, 2020 7:24 PM IST
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