Introduction - The History and Development of Forensic Accounting

Fraud has become an industry, not just for the fraudster. Academics study it, investigators investigate it, lawyers litigate on it, conference-goers debate it. But the industry is built on managing the consequences of fraud rather than on preventing fraud. The investigation of fraud is only one of the services offered by the professional forensic investigator. Equally important is the creation of a culture and environment which is aimed at the prevention of fraud and a response policy which is designed to respond to fraud detection as effectively as possible. According to a report released by Nedcor, crime cost South Africa R31 billion rands in 1994/1995. A large part of this amount can be attributed to white-collar crime. Fraud and its roots - greed and arrogance - are human nature. As business people, we must recognise fraud as a permanent risk, a risk we must take action to manage. Fraud is theft. It hits an enterprise in the pocket and has a direct effect on the bottom line. Despite the fact that statistics indicate a dramatic escalation in the incidents of fraud over the past decade, certain company executives still dismiss the suggestion that they may be victim of, or exposed to the risk of fraud. The extent of fraud and white-collar crime resulted in the formation of various specialised units in law-enforcement agencies. It also resulted in a major demand for accountants in the fields of forensic accounting as such crimes can only be proved with forensic reports and testimony by experts.