Introduction
An accounting framework essentially influences the way business entities delineates success. Traditional accounting predominantly concentrates on increasing the shareholder value while also influencing the bottom lines of the business in terms of its finances. However, an growing number of corporations now-a-days, are primarily interested in either the so called “double” or “triple” bottom line accounting. Their focus is not just on measuring the impact their business practices have on the financial bottom line, but also upon the impact their business practices have on their personnel, the societies in which they operate, as well as the environment surrounding them.
When an organization or a nation is governed, there are a lot of processes involved. In order for the processes to be smooth and in place, a structured work system is required. Despite the administrative systems being very clear and all operations being administered extremely well, there exists a definite need of a competent individual to handle the above said aspects in a proper manner. The vital aspect of this paper – ethical integrity of law enforcement officers, gains significance with respect to the above statements. The aspect of ethical standards holds vitality in every responsible role specifically in the case of law enforcement officers.
The major challenges that are faced globally are terrorism, financial fraudulence, investors’ issues, and disproportionate claims, and criminal code of conducts breach, etc. The objective of this paper is to assess the existing factors which might be acting as influencers on the ethical decision-making of financial advisors as well as financial service providers and compliance officers of the various organizations in the American financial services industry, in the financial advice provision for the American consumers. Additionally, this paper also explores the significance of the Accounting profession to officers of Law Enforcement.
The topic is of very high prominence and importance from an academic as well as societal angle because, from the academic point of view, the discussion deals with the questions of how and why people take ethical decisions in the work place and why such decisions are complex? According to the research conducted for this paper, it has been ascertained that ethical decision making has been interpreted by a wide range of varied paradigms, including the characteristics of the person who is making the ethical decision as well as the situational and circumstantial factors that are associated with the structural environment in which the decision is being made.
Financial planning advice is garnering increased relevance to the core objectives of the Australian economy in particular. Yet, the increasing evidence indicates that there are a plethora of ethical risks in relation to the facility of such kind of financial planning advice and a wide range of other factors that may be having their effect on the ethical decision making of financial advisors and compliance officers in their corresponding roles.
The mission of law enforcement is to serve the public by investigating various criminal violations including financial crimes. Clearly, law enforcement promotes confidence in the tax system and compliance with the law and Internal Revenue Code. In the function of law enforcement particularly those under the branch of IRS need to combine their law enforcement skills with accounting skills specifically in investigating financial crimes. Law enforcement officers are trained to monitor money flow, including all income earned by individuals, its sources, and possible crimes that are involved within the investigative jurisdiction. The grouping of law enforcement and accounting skills are highly in demand particularly in complex financial investigations. The accounting profession is closely linked to the detection of fraud, particularly those that affect the performance of publicly traded corporations. The accounting profession is important in investigating various crimes like money laundering and domestic murders. It looks after the violations that often relate to the money flow and within the scope of accounting profession. The paramount concern of the accounting profession in law enforcement is to look after the violations to federal law under current applicable statutes such those relating to the trading, buying and selling of securities, false statements in documents filed with the SEC, scheme to defraud, and money or property gained from illegal activities.
Law enforcement relies on the work of the accounting profession in the assessment and in strengthening sector accounting and auditing practices through enhanced financial transparency in financial and enterprise sectors. Primarily, the objective of law enforcement is to foster economic integration on regional and international level, to monitor all financial crimes, and to improve the investment climate. The accounting profession involves financial reporting, auditing practice, and assessment of accounting standards in private, corporate, and government sectors, aiming to comply with the International Standards on Auditing, and International Financial Reporting Standards. The accounting profession relies on certain standards in enforcing financial reporting standards. In the process, it is important to achieve quality financial information which highly depends on the effectiveness of the accounting standards. The role of an accountant in law enforcement is necessary such as in forensic accounting which involves investigative skills in assisting legal matters. It involves investigative skills in analyzing and evaluating financial evidences, and in interpreting the findings. It encompasses investigation, dispute resolution, and litigation support in accounting and law enforcement. Frauds are examined through different methodologies used in obtaining evidences, writing reports, and testifying. Law enforcement officers assist in fraud prevention, detection, investigation, and remediation. Law enforcement monitors implementation of existing legal framework that is essential in accounting profession.
Clearly, law enforcement played an important role in the business world by enforcing social order, punishing fraud, and deterring monopoly. Legal regulations are applied to accounting practices, and perhaps law enforcement is interwoven to the fabric of most accounting transactions. The complexity and scope of accounting profession has expanded throughout the world considering that financial information and methods in tracking money has grown. According to the survey of US Department of Justice there are several advances in illegal financial activity. Apparently, even perpetrators of financial crimes are tracking their cash flow and operational performances to generate profits, avoid detection, seizure of their assets, and prosecution. Law enforcement is related to accounting profession considering that understanding of effective fraud assist accountants in identifying illegal activity in preserving and discovering of financial crime evidences.
Accounting profession applies accounting knowledge and investigative skills in resolving and identifying legal issues. Accounting knowledge is necessary in identifying and developing proof of money flow. This tool is valuable for law enforcement officers who handle fraud and accounting investigations. Accounting profession gives considerations to different financial crimes like management fraud, embezzlement, and theft. Accounting profession and law enforcement are both important in fraud prevention, detection, deterrence, remediation, and investigation process. Furthermore there are crime reports that call for the support of accounting profession such as during the September 11 terrorist attacks. It was depicted that the terrorists used international banking in funding their activities, and law enforcement believed that money transfers can provide clues to future threats. In this event, the government believes that accounting profession and law enforcement are necessary in understanding evidences generated from financial information. They participate in reconstructing past events that are necessary in judicial proceedings. Accounting profession is a broad area that includes civil litigation matters and reconstruction activity aiming to look backwards. On the other hand, law enforcement is specifically oriented to the dynamics and scope of fraud and financial crimes, professional environment, legal, regulatory, and ethical issues. Their function involves research and analysis, dispute investigation, valuation of losses and damages, and conflict resolution.
Accounting and Crime Investigations
Law enforcement defines financial fraud as deliberate misrepresentation of financial condition by omitting amounts or putting disclosures to deceive financial statement users. Accountant used their knowledge, abilities, experience, and education in supporting legal actions. There are cases wherein accountants are called to stand as expert witness or special masters in certain investigation process. Some accountants provide litigation support services in criminal cases involving civil litigation. Accountants support in evaluating crimes such as in investigating generalized audit used in fraud detection and analysis. Law enforcement and accounting skills are crucial to the success of forensic investigations. Nowadays, accounting profession has been required to deal with different challenges such as in law enforcement. Previously, there are various sensational accounting scandals that grabbed the headlines. Consequently, all the negative reports and accounting scandals eroded public confidence in accounting profession. On the other hand, accounting profession started to join the forces with law enforcers to fight white collar crimes. Law enforcers are working with financial fraud cases, and they are investigating crimes of embezzlement, fraud, and forgeries that occur in business world. Accountants use spreadsheets in tracing where the money of particularly entity in going, while the law enforcers rely on their findings before directing their investigations. One of the serious crimes they handled is embezzlement wherein the crime perpetrated on victims through their trust. Accountants work with law enforcers to look into financial fraud, law enforcement usually has limited resources in fighting predominately crimes.
In most cases, law enforcers have difficulties in investigating money laundering that relates to other serious crimes like drugs. Accounting profession is guided by a governance system and they are subject to a system that controls and constitute the regulations. They have the responsibilities to protect the public and play an important role in regulating the profession. In forensic accounting, they are after the application of accounting skills for courtroom purposes. In this field, they are giving consideration to various crimes like bankruptcy, fraud, damages, valuation, and other issues even not connect with fraud. In examining fraud, there are appropriate procedures that need to follow especially in resolving allegations of fraud. In the examination, gathering of evidences is necessary and sometimes even law enforcers without accounting background can perform other tasks. In accounting profession, they have orientation on how to determine and locate fraud in transactions that are important in some crimes. In law enforcement, accounting knowledge is just one of the elements. Most of the officers in law enforcement are after the factors that motivate the people in engaging to illegal conduct. It was stated in the regulations that an accountant needs to know how to gather evidences and interview witnesses. In the manner, accountants are taught the most common forms of fraud schemes.
Accounting and Fraud Detection
Clearly, there are various forms of fraud cases, majority of them involve misappropriations of cash and other assets. However, fraud cases are not like rocket science although accounting knowledge is necessary in detecting these. In the investigation process, accountants commence the engagement through brainstorming on how material fraud could occur within a particular entity. In accounting literature, accounting profession is involved in detecting fraud. Most often, accountants and auditors were criticized for not doing the best they can in preventing and in detecting fraud. It is admitted in accounting profession that they have practical constraints such as the cost, time, customer relations, and availability of well-trained people. Recent researches show that risk of fraud varies from the size of organizations and in most cases it lays with smallest companies especially those that are not regularly audited. However, an audit alone is still not proven sufficient as a tool in detecting fraud. In the reports, government entities usually have lower risk of fraud, unlike in the case of financial and retail industries. There are times that accountants don’t want to accept willingly fraud related responsibilities. In most cases, accounting firms take huge evaluation before they consider fraud seriously.
Law enforcement needs assistance from the accountants since financial reports are complicated to most people. Accountants can read set of financial statements and understand them articulately. Clearly, complexity is the killing field in fraud wherein perpetrators usually used dense concepts to easily mask their wrong actions. Law enforcers and accountants usually work together in detecting financial fraud and other illegalities. Apparently, there are many accounting professionals having difficulty in detecting material fraud considering the fact that there are different complex methods of concealment. It shows that actual costs of fraud are unknowable and unknown and law enforcement considered these things as dark figures. Unlike other visible crimes such as robbery and theft which are uncovered. Fraud cases are continually rising while other violent crimes like assault and robbery are committed by young people. Fraud cases are crimes commonly committed by older and educated people. It was expected that fraud related offenses will continue to rise for the coming decades.
In forensic accounting, criminal justice and accounting met and both of their skills are combined. The skills in accounting, law enforcement, and investigation were used in uncovering financial crimes. Their function includes investigation of financial evidences, communication of findings, litigation support, dispute resolution, and forensic audit. In forensic accounting, they maintain confidentiality in all the evidences they encounter especially those that will be used in the court of law. Accountants are called to ensure that nation’s firms run efficiently and all their records are kept accurately. It is the responsibility of accountants to ensure that all the taxes are paid regularly on time, and they are responsible in communicating all the financial information to different entities. Public accountants are specialize in several fields like in forensic accounting wherein they are called to interpret and investigate white collar crimes involving embezzlement, fraud, contract disputes, and other criminal financial transactions like money laundering performed by organized criminals. Forensic accountants usually have skills not only in accounting but also with finance and other investigative techniques which are commonly used in determining illegal activities. Clearly, forensic accountants work closely with law enforcement during investigations and even during the trials. According to the new Federal legislation, they restrict other non-auditing services in public accountants.
An accounting firm who provide services to their client’s financial statements cannot provide advice on human resources and other legal matters on that same client. While in forensic accounting, they gave much emphasis on legal review by providing highest level of assurance, and generally accepted connotation in scientific manner. In forensic accounting, thorough judgment is needed in delivering findings. Their findings usually come scientifically and their interpretations and evidences are based on accounting system. Forensic accounting involves explanatory analysis and discovery of deception by using accounting system domain. Forensic accountants employed objective verification, they operate within commercial legal environment, and they anticipate their findings subject to judicial scrutiny and administrative review. They usually seek level of analytical precision and evidentiary detail that are sustainable within legal framework. Most often, they based their approach on realistic appreciation and evolutionary dialogue that are appropriate in administrative bodies. They give greater focus not only on evidences but also with economic transactions and reporting contained in accounting system.
Accounting profession is involved in a wide range of tasks including transaction reconstruction and measurement like in probate asset identification and valuation, bankruptcy, matrimonial divorce, falsifications of accounts and inventories, and other environments within statutory audit. Accountants have important role in offering independent assurance such as in advisory services, investment analyst research, and risk management. Accounting profession relate to the value of accounting data and with other body of knowledge within legal framework. In crimes, accountants detect and interpret evidences that are fraudulent and non-fraudulent introduced in records of accounting system. It is necessary for them to understand what is normal, and those improper accounts and policy included in routine transactions. Accounting profession pursues careers like financial analyst or investigators wherein cross fertilization of engagement and ideas arise.
Accounting profession demands standard of professionalism with social obligation, and goes further in economic transactions that demand independent and objective analysis. Accountants are responsible in detection of fraudulent financial reporting, and other investigative tasks which require limited exemption. Due to awareness and intolerance of fraudulent activity, the service of accounting profession in law enforcement is rapidly increasing. Accounting profession combines investigative skills with unique combination of accounting knowledge and methods used in litigation support and investigative settings. Accounting profession may be engaged in different areas like specialized forensic accounting, public accounting firms, law enforcement agencies, law firms, insurance companies, and other financial institutions. An accountant needs to have skills necessary for interviewer, psychologist, investigator, and business consultant. Accountants need to be skillful in investigating financial matters including how to analyze and know where to found evidences. It is necessary for them to have an investigative mindset. They have knowledge in detection or deterrence of fraud, investigative techniques, criminology, techniques of fraud, and law. Forensic accountants work hand in hand with law enforcement especially in handling white collar crimes. Accounting profession take aggressive stance against fraud while law enforcement provides studies showing punishment based deterrence. Law enforcement and accountants increase the perception that illegal activities will be detected considering the fact that fraud examiners are actively looking for those who did financial crimes. Forensic accounting and law enforcement are employed to deter and resolve fraud problems. In the process, law enforcement is empowered to enforce law and social order to the public by using legitimized use of source. Primarily, the function of law enforcement is to protect life and property, enhancing criminal investigation, enforcing criminal law, crowd control, and other related public safety duty.
Conclusion
Law enforcement enters in accounting profession in the assessment and in strengthening sector accounting and auditing practices by enhancing financial transparency in financial and enterprise sectors. Legal regulations are applied to accounting practices, and perhaps law enforcement is interwoven to the fabric of most accounting transactions. The complexity and scope of accounting profession has expanded throughout the world considering that financial information and methods in tracking money has grown. According to the survey of US Department of Justice there are several advances in illegal financial activity. Accounting profession gives considerations to different financial crimes like management fraud, embezzlement, and theft. Accounting profession and law enforcement are both important in fraud prevention, detection, deterrence, remediation, and investigation process. The role of an accountant in some investigations is necessary like forensic accounting which is involved in investigative skills in assisting legal matters. It involves investigative skills in analyzing and evaluating financial evidences, and in interpreting the findings. It encompasses investigation, dispute resolution, and litigation support in accounting and law enforcement. Law enforcers are working with financial fraud cases, and they are investigating crimes of embezzlement, fraud, and forgeries that occur in business world. Accountants use spreadsheets in tracing where the money of particularly entity in going, while the law enforcers rely on their findings before directing their investigations. One of the serious crimes they handled is embezzlement wherein the crime perpetrated on victims through their trust. Law enforcers are working with financial fraud cases, and they are investigating crimes of embezzlement, fraud, and forgeries that occur in business world. Accountants use spreadsheets in tracing where the money of particularly entity in going, while the law enforcers rely on their findings before directing their investigations. One of the serious crimes they handled is embezzlement wherein the crime perpetrated on victims through their trust.
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