Suitability of forensic accounting in uncovering bank frauds in India: an opinion survey

What is it about?

Economic robustness is the heart of any country’s prosperity. It is no wonder that economic progression is a crucial force that keeps a nation rolling on its wheels. As economic well-being is such an important piece in the jigsaw of a country’s health, economic shocks must be kept at a bare minimum. India in recent years has experienced various banking failures and scams that put the financial system at stake and crushed investor confidence. There are examples of aplenty of banks collapsing because of siphoning and diversion of funds in risky propositions that ultimately put the depositors and financial institutions at the receiving end. As per the Reserve Bank of India’s latest annual report, it has been reported that there have been bank frauds worth a whopping Rs 72,000 crore in the financial year 2019. Therefore, this study aims to obtain the perception of Academicians and Practitioners regarding forensic accounting’s suitability in uncovering bank frauds. Design/methodology/approach A strategically constructed Likert scale questionnaire was designed to obtain perceptions of Academicians and Practitioners regarding forensic accounting’s suitability in uncovering bank frauds. The analysis was performed by applying the “non-parametric test” on the data gathered from the questionnaire. Findings By testing the relevant hypotheses, it has been found that insiders working in the bank team up with outsiders in perpetrating fraudulent activities resulted in bank failures, that both forensic accountants and traditional accountants were different from each other and that adoption of forensic accounting in India will aid regulatory authorities in doing their job more efficiently.

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Photo by Scott Graham on Unsplash

Photo by Scott Graham on Unsplash

Why is it important?

Economic robustness is the heart of any country’s prosperity. It is no wonder that economic progression is a crucial force that keeps a nation rolling on its wheels. As economic well-being is such an important piece in the jigsaw of a country’s health, economic shocks must be kept at a bare minimum. India in recent years has experienced various banking failures and scams that put the financial system at stake and crushed investor confidence. There are examples of aplenty of banks collapsing because of siphoning and diversion of funds in risky propositions that ultimately put the depositors and financial institutions at the receiving end. As per the Reserve Bank of India’s latest annual report, it has been reported that there have been bank frauds worth a whopping Rs 72,000 crore in the financial year 2019. Therefore, this study aims to obtain the perception of Academicians and Practitioners regarding forensic accounting’s suitability in uncovering bank frauds.