The forensic accountant profession has been highly established around the world due to world-renowned financial scams that occurred from Malaysian to Europe and leading to closures and to failures like Adelphia and many more. Forensic accounting techniques are a consortium of investigation and interrogation attempts by corrupt financial gurus. The sole rationale of this study is to investigate the possible forensic techniques and methods to improve the overall corporate governance in Portugal. The outcome of this study guides the Portuguese universities and colleges to set the syllabus of integrated forensic accounting techniques and to comply with corporate governance policies. The study found the necessity to highlight possible forensic accounting techniques. The methods proposed are to align the corporate communication structure via rectifying their corporate governance weaknesses, particularly in the areas of internal control and fraud financial reporting.
TopIntroduction
The forensic accounting market has grown dramatically during, especially, the last decade. In a survey of large Certified Public Accountant (CPA) firms, 85% of the feedbacks is directed about forensic accounting which is an enhancing portion of their work, and 100% of the feedback predictable demand is to enhance for the future. Accounting, specifically, is a growing profession with high relevance for a firm's growth and market survival. According to the US Bureau of labor statistic, the employment opportunities of auditors and accountants speculated to enhance by seven percent from the year 2020 to 2030 that means 135,000 more job opportunities will be available for the auditors and accountant each year. The reason behind attracting this profession is to replace workers those transfer to another occupation or get retirement from their job tenure (US Statistic, 2020).
In the year 2008, there were 1,290,600 accountants’ professionals working in the United States, and that number was expected to increase by 22% in 2018, with 279,400 extra jobs in the profession of accountancy (Schiavone, 2012). The Statista website presents the numbers more recently (Statista, 2021). In Portugal, the Institute of Statutory Auditors (OROC) (https://www.occ.pt/pt/) point that in total, the structure and organization of the profession in 2020, counts with 1,504 (OROC) and 71,260 (OCC) accountants, with numbers as well growing.
The accountants' and auditors’ role is of extreme importance for companies, institutions, and organizations. They are responsible for preparing financial records, examining these records to ensure their accuracy and compliance, and ensuring that the correct amount of tax is paid. Most companies employ in-house accountants to maintain financial records. However, to ensure independence, audits are generally conducted by third-party consultancy firms. By far, the largest external accountancy and audit firms Worldwide (true for the USA and Portugal as well) are the Big Four – PwC, Deloitte, EY, and KPMG (Statista, 2021).
The authors highlight the financial community realization regarding the failure of corporate communication which is required for forensic skills/techniques professionals to expose structural weakness in major areas such as flawed internal controls, poor corporate governance, and fraudulent financial statements. Integrating accounting, auditing, and investigation skills lead to the role of forensic accounting. Recent, and even older, white-collar crimes and financial frauds called the need for forensic accounting worldwide (Subash, 2015; Jain and Lamba, 2020). Due to its strict relationship with corporate governance, forensic accounting is becoming crucial nowadays (Subash, 2015; Kljajić et al., 2017). As argued by Rehman and Hashim (2020), corporate governance maturity would be reached by controlling and mitigating fraud within organizations. This is due to the two major roles of forensic accounting for corporate governance, namely, preventive and detective (Rehman and Hashim, 2020).