Top accounting body to introduce forensic auditing to combat fraud

Sri Lanka’s national standards setting body, the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) is planning to introduce a programme in forensic auditing for its members, in a bid to fight corruption and fraud in public and private sector organizations.

Forensic auditing is a specialized area within the field of accounting. Forensic auditors often provide expert testimony during trial proceedings.

According to the newly appointed CA Sri Lanka President, Lasantha Wickremasinghe, forensic auditing ensures the safeguarding of public interest in those organizations where the public money is invested in. 

“We plan to introduce a programme in forensic auditing for our members to ensure public expectations are met,” said Wickremasinghe, speaking at the induction ceremony of CA Sri Lanka’s new board for 2016 and 2017 held recently.       

Forensic accountants are a highly specialized and a rare breed, which have experience not only in accounting and auditing techniques but also in the relevant legal framework. The findings of a forensic audit are used as evidence in a court of law.  Hence the mandate of a forensic investigator goes beyond just the annual audit of the financial statements and systems to interviewing and interrogating the parties, collecting evidence and maintaining them in safe custody.

A programme of this nature could not have been introduced at a better time as the good governance regime has started a crack down on fraud, corruption and misappropriation of public funds under the 
last regime. 

“The present international and local environment is crying for the need of ‘forensic thinking’. Now, it is time to assist the government, public and the business community to prevent fraud and corruption,” he added.   

Wickremasinghe further said international acceptance is also of paramount importance in the success of such an exercise. 

“Not only local but international acceptance is paramount to our continued success,” he stressed. 
Most large accounting firms have forensic audit departments and such audits are carried out either by the request of the management of an organization or as a part of a trial. 

The current government has requested the support from the country’s professional accounting bodies to improve the management and financial reporting in state-owned enterprises and other public sector organizations, which are currently weighing on the government’s balance sheet. 

CA Sri Lanka’s public sector wing, the Association of Public Finance Accountants of Sri Lanka (APFASL) offers professional accounting qualifications for those who enter the public sector as accountants in order to ensure clean sets of books. 

Meanwhile, the Sri Lanka Division of Chartered Institute of Management Accountants (CIMA) trains public sector employees on better organizational and financial management through its curriculum and are also planning to structure a syllabus to suit the public sector accounting professionals.