Forensic Accounting, a Veritable Financial Tool for Qualitative Financial Reporting Systems in the 21st Century

Abstract

Purpose: The aim of this study was to examine the implications and effects of forensic accounting as a veritable financial tool for qualitative financial reporting in the 21st century. In this period, forensic accounting is playing a significant role in the trajectory efforts in building enduring confidence in the credibility of financial reporting systems.   Theoretical Framework: The quality of financial reporting is under critical threat as a result of reported financial scandals and the professional recklessness of a few unscrupulous individuals in the accounting profession.   The objective of the financial reporting system is to galvanize the reporting procedures and true application of accounting standards to improve the general acceptance of accounting information.  Forensic accounting bridges the gap as a veritable financial tool to enhance the quality of financial reporting.   Design/Methodology/Approach: The study employed used a survey research method, using a structured questionnaire administered through an online platform targeting a selection of forensic accounting investigators and forensic accountants. A total of 443 questionnaires were validated and used for the analyses. The reliability and validity of the instrument were confirmed with the use of Cronbach Alpha and descriptive statistics and inferential analysis were used for the study analyses of the data.   Findings: The result demonstrated that forensic accounting exerted significant effects on each of the qualitative characteristics and enhanced characteristics of financial reporting systems in the study. The study concluded that forensic accounting as a veritable financial tool significantly affected the quality of financial reporting systems in this 21st century.   Research Practical & Social Implication: The study with the possibility of application of forensic accounting during this contemporary period, the quality of financial reporting is enhanced. The implication of forensic accounting in safeguarding corporate financial risks should not be ignored, in providing novelty and oversight functions building quality and trust in reliance on the quality of financial reporting.   Implication/Originality/Value: The value of this study is assuring quality financial reporting in providing strong confidence and trust in the reliability and credibility of financial statements in making useful decisions capable of adding economic value to the stakeholders.