Forensic Accounting and Auditing United Again: A Historical Perspective

Abstract

This paper is a historical review and commentary on the relationship of forensic accounting and auditing. In the early years of the accounting profession, when fraud discovery was acknowledged as being one of the principal objectives of the financial audit, forensic accounting was an integral part of mainstream accounting. During subsequent decades as the accounting profession attempted to distance itself from fraud discovery responsibilities, forensic accounting became identified as a specialized subset of the profession. Now, on the heels of many embarrassing corporate failures and passage of the Sarbanes-Oxley Act, forensic accounting is being reunited with the profession. Fraud discovery is again acknowledged as one of the principal responsibilities of the auditor and the tools of the forensic accountant are now being rediscovered.

Keywords: auditing, forensic accounting, history of accounting, fraud detection, Sarbanes-Oxley