CHAPTER 1: INTRODUCTION TO THE STUDY
1.1 Background of the research
The auditing profession in Malaysia has caught the media's attention following financial scandals in some of the big Malaysian corporations. For example Transmile, Megan Media Holdings Bhd, Technology Resources Industries Bhd (TRI) and Cold Storage (Malaysia) Bhd, and media reports indicating that, between 1999 and 2002 fraud resulted in business losses of more than RM3.93 billion in Malaysia (Lee et al, 2008 cited in Asia View February 2005).
KPMG Fraud Survey 2004 stated that majority (62%) of respondents felt that fraud is a major problem for Malaysian business generally (KPMG Forensic Malaysia, 2005). The KPMG Fraud Survey 2004 which surveyed 130 listed companies showed that 83 % of respondents admitted they had experienced fraud, an increase of 33 % from 2002. The survey cited secret commission or kickbacks, lapping (involves withholding cash receipts) and kiting (to mistake account) and false invoicing as the three most common types of fraud experienced by businesses in Malaysia.( KPMG Forensic Malaysia, 2005).
According to James Richard and Carl recent corporate financial accounting scandals (e.g. Enron, WorldCom, Global Crossing, Tyco, etc.) have increased concerns about fraud, wiped out billions of dollars of shareholder value, and led to the erosion of investor confidence in financial markets (Peterson and Buckhoff, 2004; Rezaee et al., 2004). This was a wakeup call to the accounting profession and has rejuvenated the interest in forensic accounting. Globally, the average estimated loss per organization from economic crimes is $2,199,930 over a two-year period (PriceWaterhouseCoopers (PWC), 2003). In the USA, the Association of Certified Fraud Examiners (ACFE) estimates that about six percent of firm revenues, or $660 billion, is lost per year as the result of occupational fraud (Association of Certified Fraud Examiners, 2004). Although larger businesses are more likely to experience economic crime, fraud may be more costly for small businesses (Thomas and Gibson, 2003; PriceWaterhouseCoopers (PWC), 2003). The average small business fraud amounted to $98,000 per occurrence compared to $105,500 per incident for large companies (Association of Certified Fraud Examiners, 2004). On a per employee basis, losses from fraud can be as much as 100 times greater at small firms than large firms (Association of Certified Fraud Examiners, 2004; Wells, 2003).
This resulted in steadily growing demand for forensic accountants. But still the fraud cannot be eliminated fully as there are problems faced by them in detecting fraud. Despite the extensive international research on fraud, very few studies have been conducted on the challenges faced by forensic accountants in detecting financial institution frauds. The financial institution crimes which came into being later in the 19th and 20th century are corruption, money laundering, tax evasion, externalization of foreign currency to itemize. Just a few have stood as potent weapons capable of hemorrhaging the entire world economies, particularly the financial sector because of its high risk factor (Njanike et. al, 2009). Even the richest and electronically mobile countries have experienced a fair share of financial turbulence and uncertainties seeded by fraud-related crimes. The scandals sent shockwaves in the corporate world, regulatory authorities, audit fraternity, and the society at large; hence, the erosion of investor confidence in the financial markets (Njanike et. al, 2009) This brought the attention for the problems faced by forensic accountants in detecting frauds in financial institutions to be investigated. The problems faced by forensic auditors in detecting financial frauds are as follows. The main problems faced by forensic accountants are they are unable to collect evidence collection which needs to be done in order to prove the fraud has been taken place. This is difficult as in most situations it's prohibited by law as it will breach the private and confident philosophy. Another problem the management of the company does not disclose sufficient information to forensic accountants so it's difficult to identify the fraud which has being taken place in the company. So the forensic accountant needs to seek for further information which some employees or company would not be willing to disclose. Also further problem is that forensic accountants would not have the skills and knowledge they need to detect fraud which is an essential part because it's not easy to detect all financial institution frauds as they are complex in nature and it would use high technologies such as e-crime which is difficult to trace as the amount of transactions done are huge and the forensic accountant can only check the records based on a sample. So it's difficult to check each and every transaction happened.
http://www.ccsenet.org/journal/index.php/ijbm/article/viewFile/4229/3666
Forensic accountant's works are in two primary areas which are investigative accounting and litigation support. Investigative accounting encompasses not just the numbers and documents of a financial institution, but the business environment as well. Forensic accountants investigate the financial operations of an enterprise and prepare information that may be used in a criminal or civil court case. Also they provide investigative services or provide support for litigation. Financial institutions are those organizations that are involved in providing various types of financial services to their customers. The role of forensic accounting in solving the vexed problem of corporate World Bank fraud is a crime that has been around as long as banks themselves. Anytime there is a large amount of money floating around, there are going to be people trying to figure out ways to get to it. In the United States, and most other developed countries, financial fraud is a serious problem that causes billions of dollars in damages every year, and is considered a federal offense.
1.2 Review of past research and identifying the gaps.
Based on the past research it was suggested is the main problem in detecting fraud is the evidence collecting is difficult it's either destroyed or adjusted according to suit the particular individual who committed the fraud. And the gaps of some researchers say the forensic accounting in Malaysia is still its infancy stage as compared to other developed countries. The expectation gap debate consistently centers on a number of perennial issues, which are: (1) the role and responsibilities of the forensic accountants, (2) the nature and meaning of evidence collection (3) the quality of the audit function, and (4) the structure and regulation of the profession (Humphrey, Mozier & Turley, 1993). The main problem or issues the constant misunderstanding on the role and responsibility of the forensic accountants as the public expects to detect financial asset misstatement or even fraudulent activities from the financial statements. This has been the long perception of what an auditor's responsibilities are. Therefore, this perception should be regenerated and corrected. Auditors with forensic accounting background would be assigned as a forensic accountant specifically to investigate the company's financial statement. These people are the ones whose roles are to detect financial misstatements. With the right education given to the public, this perception on auditors could be regenerated or even eliminated.
http://www.ccsenet.org/journal/index.php/ijbm/article/viewFile/4229/3666
http://www.ccsenet.org/journal/index.php/ijbm/article/viewFile/5945/4726
1.3 Research problems/research questions
Problems arise from the fact that forensic accounting service is still new to most of the businesses and even to the public in Malaysia. This leads to confusion among public and some may even be unaware of the existence of the system. Therefore, the importance of the service is ignored. Therefore this study focus on forensic accounting is conducted to improve the understanding in detecting and reducing accounting fraud cases in Malaysian companies. For example there are several empirical studies such as Cain (1999) and the KPMG, Australia fraud survey (KPMG), (2002) each indicate that over 50 per cent of all respondents surveyed believed that fraud is a major business problem. Moreover, similar reviews of fraud cases by Rezaee (2004) revealed that financial statement fraud has cost market participation more that USD$500 billion during recent years, with serious litigation consequences. Similarly fraud has increasingly become a major problem in Malaysia. The evidence from the "New Straits Times" (Management Time, 2001) reported that more than 60 per cent of the Malaysian listed companies surveyed had experienced some form of fraud of the companies surveyed, almost a quarter were fraud more than RM1 million each to fraud". It will also give a view towards companies who wish to educate and increase awareness among of the public regarding the seriousness of the fraud in Malaysia. This research will lead to the awareness and acceptance level of forensic accounting. Furthermore, the result of this research would give understanding and awareness of the role of forensic accounting. Ultimately this study hopes to protect the interest of shareholder.
http://www.ccsenet.org/journal/index.php/ijbm/article/viewFile/4229/3666\
1.4 Aims and Objectives.
This research identifies the difficulties faced by forensic auditors in detecting financial institution frauds. Also it examines the skills needed for forensic accountants to reduce the difficulties in detecting fraud and overcoming it. Also it provides recommendation to improve evidence collection and limitations to it for the forensic accountants. Further it identifies the relevant laws which will help forensic auditors for evidence collection. Finally it will make recommendations to minimize or overcome financial institution frauds happening in the future.
1.5 Justification of research.
This research will be providing better understanding about the nature of challenges forensic auditors face in order to restore confidence in the financial firms. Better audit quality will help reduce the incidence of fraud and mismanagement and protects credibility. By ensuring that there is audit quality, forensic auditors will continue to play a more important role in detecting fraud and other unethical practices so that preventive measures can be taken to prevent companies from becoming financially distressed. Raising the skills of forensic auditors and audit quality will be critical to improving assurance and credibility (Zarinah Anwar, 2008). In the lights of the corporate scandal nowadays, it is necessary for forensic auditors to be aware in their auditing. Enron woke the business world to the many possibilities of accounting fraud throughout the economy. It also helped to put forensic accounting on the map. Forensic accounting is, in basic terms, accounting that can be used in court as evidence. After the Enron scandal broke, there was a public outcry. Because of how successful Enron had been, their stock also had a lot of investors. Some investors had their entire finances invested into the corporation and lost everything when the stock fell. With any public outcry comes an increased scrutiny on other companies to ensure that the incident does not happen again. As a result or Enron, hundreds of other companies underwent similar audits. Not only did it help to expose other companies with similar fraudulent accounting practices, it created a series of systems for yearly audits to ensure the safety of stockholders. As such it also widened the field for accountants who specialize in forensic accounting.
http://www.ehow.com/about_4614281_enron-forensic-accounting.html
1.6 Methodology
Firstly, this is an exploratory research where it will focus on information gathering instead of building and testing theory. It will be applying representative approach where it looks at the challenges faced by forensic auditors in detecting fraud in financial institutions. Primarily, sources of information from secondary data will be collected from various sources, namely books, online journals, government sites and relevant websites. From online journals and other website, information of past studies can be obtained, such as similar research or related to the area of study from other countries to build on the literature review for further findings. For government sites information will be mainly gathered from audit firms and financial institutions.
1.7 Conclusion
The outcome of the findings of this research would provide useful information to all forensic accountants and auditors. This would also provide empirical information to all directors of the company in order to use it to safeguard the financial statement of the company in order to prevent billions of losses occurring each year in financial institutions. This would also help all directors to provide a true and fair view of the financial statement to the users of the financial statement. From the interview and generalized questionnaire, it is expected to show that the problem faced by forensic auditors. Besides that the factors of the outcome mentioned could be identified from the data analyzing of the general questionnaire answered by various audit firms senior executives. The forensic auditors are also expected to be unaware of the benefits of programs and assistance provided by various parties to help them in overcoming the difficulties in detecting financial institution frauds. Also it will Increase the scope of forensic accounting. Furthermore it identifies the methods forensic auditors require to detect corporate frauds. It will also identify the problems faced by forensic auditors in evidence collection. Lastly it will provide solutions to minimize corporate frauds happening in the future.
2.0 Literature review
Financial institution frauds have developed in nature and complexity from the traditional system of simple cheque fraud in banks, where fraudster would just forge his name on a simple cheque by using an ordinary pen in banks to more sophisticated techniques such as the advance fee fraud which utilizes the Internet and computer highways (Singleton et al, 2006). Skalah et al (2005) managed to identify two species of fraud, those that are committed by insiders and those committed by other fraud felons outside. Among the financial frauds emanating from within are: rogue traders, fraudulent loans, wire fraud, forged documents, theft of identity, and demand draft fraud. On the other hand, fraud committed by outsiders include: forgery and altered cheques, stolen cheques, cheque kitting, payment card fraud, booster cheque duplication and skimming of card information prime bank fraud, fictitious bank 'inspector' fraudulent loans applications, impersonation and theft of identity fraud and advance fee fraud, money laundering, and 'missing in the post' fraud.
According to Skalah et al, (2005), a rogue trader is a highly placed trader to invest sizeable funds on behalf of the bank. This trader makes risky investments using the bank's money, which when one investment goes bad, the trader engages in further market speculation in the hope of a quick profit which would hide or cover losses. Currency dealers usually commit some of the largest financial institution frauds (Singleton et al, 2006). Fraudulent loans are one way to remove money from a bank with practice bankers more than willing to encourage if they know that money will be repaid with interest (Skalah et al, 2005). The borrower may even be non-existent and the loan merely an artificial thing to conceal a theft of large sums of money from the bank (Hassibi, 2000). According to Skalah et al (2005), wire fraud makes use of wire transfer network, such as SWIFT, Real Time Gross Settlement (RTGS), and interbank fund transfer systems. While several banks have put some checks and balances in place, there is real risk that insiders may attempt to use fraudulently or forged documents, which claim to request a depositor's money, wired to another bank, often an offshore account in some distant foreign country (Skalah et al, 2005).
One of the financial frauds can be banking frauds. In this the main problem is difficult of assessing and proving evidence as manipulation of data and fictitious loans given to customers which is difficult to detect. In banks tricksters can use Automated Teller Machines (ATM), taking advantage of victims who are not able to operate an ATM. In Japan, the first manipulation of this facility started back in 1982 (Zabihollah Rezaee 2007) Another fraud will be advance fee fraud which involves an upfront payment by a victim to the fraudster, to allow the victim to take part in a much larger financial transaction, which he believes will bring him either profit or result in credit advanced to him. All commercial and financial undertakings in modern society bear the risk of fraud. Many times financial institution fraud happens that few employees of a particular financial organization get involved in fraudulent practices. The financial institution fraud prevention programs prove to be of great use in protecting these institutions in the event of such vulnerability. Burglary, counterfeiting, dishonesty of staffs, robbery, money laundering, forgery and many other unlawful activities fall under the domain of financial institution fraud.
The challenges faced by forensic accountants when detecting financial frauds are as follows. The management doesn't disclose sufficient information to the auditor because they may be part of the fraud so it's really difficult to trace the fraud how is happening in the corporate world. When it comes to the business and tasks of forensic accountants, it can be noted that they are related to deterring, detecting and investigating frauds in financial reporting. A forensic accountant can be engaged by a management or owner as well as by other users of financial statements and regulatory bodies with the aim to investigate the doubts concerning the existence of fraud and to collect the evidence. One should have in mind that not all transactions are the subject of investigation, but only particular transactions between enterprises and certain business partners regarding the sale and purchase of the precise number of buyers i.e., suppliers as well as the transactions, in whose realization certain people and groups of people have participated. Also there is a threat to be fired when the auditors try to detect fraud and report it to the public.
One of the challenges forensic accountants face is the Risks of Whistle-Blowing. This can be a difficulty for forensic accountant to detect fraud as the whistle blowers were not allowed to provide sufficient information to forensic accountant. For example Paul van Buitenen, an internal auditor for the European Union, tried to bring his concerns to his superiors at the European Commission. He was demoted for his efforts. He went over the heads of his supervisors, taking his evidence directly to the European Court of Auditors. He was disciplined by his superiors and lost pay. Eventually, his evidence was supported and many senior EU officials resigned (van Buitenen 2000). Martha Andreasen claimed EU accounts were open to fraud. She found herself facing discipline charges by the European Union. In 2002 she was suspended from her post as chief accountant after publicly declaring that the Commission's accounts were faulty and open to fraud and abuse. The scopes of the forensic accountants are growing at a rapid pace. The increase in their work opportunities have been accelerated due to the fall of the Enron Corporation and the collapse of the American Twin Towers. A recent study by the Association of Certified Fraud Examiners indicates that financial losses due to fraud in the United States amounted to a staggering $400 billion in 1998. As more business operations use computerized information, more fraud is committed via computer assisted means. The same technology that enables this type of fraud, however, provides auditors with more sophisticated weapons to use in their fight against it. In fact, fraud detection is an ideal application for computer assisted audit techniques (CAATs). In recent years, analytical techniques have become not only more powerful, but also more widely used by auditors for forensic investigation. The other challenge will be the forensic accountant won't have the expertise knowledge in E-crimes using online transactions such as E-banking and E-trading.
A significant challenge that faces a forensic auditor is the task of gathering information that is admissible in a court of law. The admissibility of evidence in compliance with the laws of evidence is crucial to successful prosecutions of criminal and civil claims. In South African law, a "data message" or computer generated evidence is regarded as being 'hearsay' evidence. Hearsay evidence is written or oral evidence, "the probative value of which depends upon the credibility of any person other than the person giving such evidence In order to explain the nature of hearsay evidence. The computer generated evidence cannot be tested. It is therefore generally regarded as unreliable and inadmissible hearsay evidence, unless the person responsible for inputting the data is available to give evidence and swear to its accuracy and correctness. Notwithstanding this general rule, it will be appreciated that electronic data is often highly reliable and it should therefore be accorded the appropriate weight in certain circumstances.
A further problem with computer-based evidence is the time lapse factor. To illustrate, consider the following scenario: a crime is committed on a Monday, but is only detected three days later. Who can verify that the log file or the original system entry was not altered? In fact, the relevant files are exceedingly likely to have been changed. Numerous entries were almost certainly added to the files in the three days that lapsed between the activity of the crime and its detection. Additional proof is required which should indicate that the specific entry in the log file had not been changed since the initial entry on Monday, even though the file itself had been accessed and modified numerous times thereafter. While technology and computer systems can be used to commit and hide fraud, it can also be used by the forensic auditor. Also one of the challenges will be they cannot tell the information they got to outsiders because it's highly confidential and also there will be threat to independence. When forensic accounting or valuation services are provided to an entity that requires member to be independent which means he or she must not be influenced by any other person in doing their job.
Also one of the financial institution frauds is stock broker's frauds. The difficulties in detecting this fraud is the stock brokers manipulative activities stock brokers delay the delivery of scripts bought by the client and use the same to compensate their day to day transactions of buying and selling their shares and adopt teeming and lading methods, by which the client will be kept in dark about the transaction. Stockbrokers use clients' funds to pay for their own trades and they evade margin requirements and violate fair trade norms by colluding with other brokers. Stockbrokers deal in fictitious trades in association with other brokers and deliberately hammering the prices, delaying transfer from broker's pool account to beneficiaries beyond stipulated limits and fraudulent and unfair trade practices. Stock brokers facilitate circular trading through their proprietary accounts thereby creating an artificial market in number of specific scrip's and these acts are in violation of SEBI code of conduct. Stock brokers violate substantial holding limits set under takeover code without informing the companies and Stock Exchanges and hold voluminous number of shares in a single company and make the shares not available in the open market and create artificial demand for the same shares. This is difficult to detect as the number of share certificates trading in the markets are huge and keeping track of this is very difficult.
One of the problems forensic accountants face is computer based evidence. Data stored in electronic format is easily modified, leaving little or no trace at all. The changes could be merely accidental or quite deliberate in the hands of a technical specialist with a motive. If computers are started from their original operating systems it is not unusual for 30+ files to be changed, including such indicators as the date and time they were last accessed or modified. This leaves the investigator open to accusations of changing or planting evidence. Incorrect handling of computer media, such as connecting a hard disk to the wrong controller, can irrevocably destroy the very important evidence that is being sought. While it may seem expedient to ask your local IT professional to look through the data they will be unaware of the need to preserve the chain of evidence and may jeopardize any chance of a successful outcome. One of the most common approaches taken by an IT professional when ask to recover evidence is to load 'un deletion' utilities onto the target system. This very act, whilst well meaning, can overwrite potential evidence that is present in the free space area of a disk.
http://www.cidap.gov.in/documents/Share%20Frauds_422200413552%20PM.pdf
http://finance.mapsofworld.com/financial-institutions/fraud.html
http://mpra.ub.uni-muenchen.de/12888/1/MPRA_paper_12888.pdf
http://findarticles.com/p/articles/mi_m4325/is_n6_v43/ai_n25025078/pg_4/?tag=content;col1
The challenges in fraud prevention and detection rests with both those charged with governance of the company and management. If the fraud is being done by employee of the company or management they will not disclose the suitable information about it or they will give false information. Sometimes forge documents will be given to forensic accountant to whom it is difficult to identify whether its fake or original .So manipulation of data would have prevented the forensic accountants in detecting financial institution frauds. Also the forensic accountant besides these, we can add the following factors regarding management to the forensic accountant in difficulties in detecting fraud. In some situations it becomes a questionable integrity or competence of management. Ultimately, such a situation may lead to the auditor's withdrawal from the engagement; clues indicating such he would not have the skills and experience that need to detect fraud. Also the pressure on the job of forensic accountants also play a big part in the difficulties faced by them as their primary duty is to detect fraud as they are exposed to much pressure compared to other jobs in the organization. This will prevent them to perform their job properly.
In such situation someone may be a person or a group of persons dominate the audited company's management and the shareholders have no effective control over them; A continuous failure in the internal control system or in the correction of the main weaknesses of the internal control structure is also a problem in detecting fraud as it is difficult to detect it. Frequent changes in the structure of key personnel within the financial department or a frequent change of company accountant and auditors also becomes a problem with regard to evidence collection as some information may be not available for verification. The existence of unusual pressure in the company or on its management, such as: a significant decrease in profits, to the extent that the assessment of management performance and, implicitly, its revenues are related to profit evolutions; adopting of an aggressive expansion policy, which generates a severe working capital deficiency; production of goods or services, which require an accelerated investment rate; the personnel in the accounting department has to prepare the financial statements in an unusually short time. Which they may not be aware of what's happening as a result the forensic auditor also will take this as evidence. The challenge faced in considering unstructured data such as documents, email or presentations, most managers rely on page-by-page reading of selected documents to understand the meaning or purpose of a key event or risk. Given the volume of such data and the length of time needed to read just one page of text, this type of review can be daunting. Even when technology such as keyword searching is applied to unstructured data, it is still a page-by-page process.
http://www.ey.com/Publication/vwLUAssets/Detecting_financial_statement_fraud:_what_every_manager_needs_to_know/$File/Industry_Oil_and_Gas_Detecting_financial_statement_fraud.pdf
http://findarticles.com/p/articles/mi_go1613/is_1_16/ai_n29335599/
http://www.ehow.com/about_4710999_what-issues-facing-forensic-accounting.html
A growing number of businesses operate solely online, so to investigate these companies, the forensic accountant must enter cyberspace, which poses a new set of issues. These cases are very difficult to track because of the lack of a paper trail and the ease in which a person can shield his or her identity online. Today's technological advances have also created yet another thorny issue for forensic accounting. It is the disappearing paper trail. Traditionally, forensic accounting was combing piles of receipts, invoices, ledgers and tax records to find missing assets or figure out how a fraud was committed. Today, these files are increasingly kept as password protected, encrypted computer files. Cracking the case thus begins only when the computer and digital files are retrieved. The forensic accountant, to work the case, must either become as knowledgeable as a young hacker or outsource such work, which becomes very expensive. The lack of a paper trail also makes evidence gathering and case building a more difficult ordeal, especially if files are deleted and hard drives erased before they are investigated
3.0 Methodology
The study being a theoretical analysis of the difficulties faced by forensic accountant in detecting financial institution frauds employed the secondary source of data collection by making use of available literature on forensic accounting and its application in modern corporate world. Also the focus group of this research will be on forensic accountants in Malaysia. Data collection will be done using a mix method approach to obtain primary data. A mix method is relevant because there is not enough information on the variables of the research to directly move forward to questionnaires. Hence, interview session with open ended questions would help find out more about the related independent variables. For now, it is proposed that ten audit firms and five corporate firms' senior executives to be interviewed to get an in-depth picture of the situation. Variables will then be identified and from there, a generalized questionnaire will be adapted and tested to ensure that the outcome of the result to be more relevant and credible. It is expected to have a sample size of 50 respondents consisting of audit firm owners and financial institution owners or applicable individuals to the field for the questionnaire to be distributed. The questionnaires will be close ended as this is a sensitive topic as respondents will not be willing to commit their selves by giving their opinion. It is also expecting to send out about 100 questionnaires and expecting a 50% response rate out of it. The questionnaire would be sent using direct mails as well as e-mails to increase the probability of response rate.
The sampling method for both the mentioned approaches would be on probability sample designs as audit firms and financial institutions would be chosen for the research. An area sampling under the cluster sampling would be applied for the questionnaires, as only audit firms and financial institutions in Kuala Lumpur would be approached. This is due to most of the audit firms and financial institutions are located in Kuala Lumpur. However, after applying the area sampling method, the simple method would be used to have random samples from the list. The audit firms list and contacts can be obtained from the following website (http://www.kwaifatt.com/kf/html/audit_listing/kl/kl_hj.html) and also the financial institution list and contacts can be found from the following website. (http://www.secondhomemalaysia.com/index.php?option=com_content&task=view&id=40&Itemid=53#Insurance). From the responses, the quantitative answers would then be extracted and analyzed to find out if the independent variables collected from the interviews and questionnaires to be applicable to the sample itself. The framework above indicates the two variables which cause problems to forensic accountants in detecting financial institution frauds are evidence collection and the complexity of fraud of forensic accounting as the main tool in investigating a company's account to detect fraud. The other variables include the public's understanding level on forensic accounting functions and the perception on the implementation of forensic accounting in the investigation. The understanding level of the public the functioning of forensic accountings will determine whether the public in Malaysia will accept it as the main tool in investigating a company's account as to a means fraud. The perception of the public on the implementation of forensic accounting in the investigation of a company's financial statement also determines the acceptance level of forensic accounting in the country.
Conclusion
The expected result from this research is that it would benefit the forensic auditors, shareholders and stakeholders of the public companies. The hypothesis testing would prove that whether certain factors would affect the quality of investigation. This research would anticipate that there is a relationship between the forensic auditors' skills and the audit quality they perform. Other hypothesis testing would be the relationship of forensic auditors and frauds, on whether being independence between forensic auditors and fraud whether the forensic auditor would help to prevent and detect fraud from occurring in the future.
